As the chart below shows, revenue per kilometer for airliners in Europe was still down 83% in June compared to June 2019. Long-haul traffic is still at depressed levels and the delta variant has only postponed the rebound as the US is still upholding strict limitations on air passenger incoming from Europe. To make things worse, several experts are now saying that herd immunity via vaccination may never happen due new variants being much more transmissible which means that pandemic will last well into 2022 impacting both travel and the goods economy via supply chain disruptions.

Airbnb seems more immune to travel restrictions

But everything in our travel basket is not created equal. Airbnb which reported Q2 earnings Thursday night after the US market close showed a strong rebound in its business. This is our post earnings take from our Market Quick Take on Friday:

Airbnb and travel are back with bumpy ride still ahead. Airbnb is back on a strong growth trajectory despite various Covid-19 variants such as delta adding uncertainty over travel activity across many countries. Airbnb Q2 gross bookings were $13.4bn vs $11.2bn and EBITDA $217mn vs est. $50.4mn on $1.34bn in revenue showing that Airbnb is back at revenue level where economics of scale kicks in big time. Q3 revenue guidance is well above Q3 2019 and thus will be a record quarter for the company showing that Airbnb is out of the crisis despite the near-term visibility issues. Airbnb says in a statement: “In the last few weeks, we had our biggest night ever in the U.S. and our biggest night globally since the pandemic began, with more than 4 million guests staying at an Airbnb listing”. Despite the strong comeback Airbnb acknowledged that the delta variant will hit gross bookings and near-term outlook is uncertain. That was enough for investors to send the shares down 4% in extended trading.

Airbnb seems to have benefitted from the global trend of people wanting to have vacation again but limited to short distance vacation. Also renting a private home may for many people mean less infection risk compared to resorts and hotels combined with going through airports or other high dense traffic nodes.

As our travel basket overview below shows, Airbnb is the only company in our basket of 40 travel related companies that has positive revenue growth over the past 12 months. The median revenue growth is current -46%, but despite the low activity levels sell-side analysts remain optimistic with a median upside of 20%. Because Airbnb’s strong rebound the company is also trading at a high forward valuation of 50.1x on the EV/EBITDA multiple which is 3x of the global equity market. The overall travel basket is valued at 7% discount to global equity market, which seems fair or maybe a bit too low a discount given the uncertainty for the industry.