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Airbnb is raking in serious profits amid the 2023 travel boom.The San Francisco company recently reported that its second-quarter profits increased more than 70 percent over one year earlier reaching $650 million.Strong bookings for summer vacation rentals, which are up 11 percent over summer 2022, are driving the Airbnb boon.Bookings rose to 115.1 million in the quarter, an increase from 103.7 million in 2022. That figure is also more than one-third higher than 2019.In addition, Airbnb's nightly accommodation rate on the platform has also been creeping, up 1 percent to $166, according to a report from Northstar Meetings Group.CEO Brian Chesky said on a call with analysts that the price customers book on Airbnb tends to be lower than list prices on average. "So we do see people gravitating toward more affordable stays," he said, adding that some of the modest increase over last year's average rate is due to people booking bigger homes.While Q2 profits for the home sharing platform are up substantially, they are still somewhat softer than what analysts were expecting. Airbnb project third-quarter revenue of about $3.3 billion to $3.4 billion. Analysts anticipated $3.23 billion.Even while Airbnb enjoys strong bookings, its been plagued with complaints about the steep cleaning fees customers now pay, which have resulted in booking prices being almost as expensive, if not more expensive than a hotel stay. That’s a significant about face from the days when Airbnbs were viewed as a bargain compared to hotels.The platform has responded to the criticism by changing its site to reveal cleaning fees upfront, when consumers are searching for accommodations.Chesky counters that hotels are raising prices faster, but Airbnb is trying to nudge many hosts to drop their rates. "Most hosts are not booked most nights," he said. "If they lower the price just a little bit, they will add more bookings, more nights, and they'll end up making more money."There are also new tools available to hosts that can be used to compare the prices being charged against local competition. This has had a moderating effect, according to Airbnb.Still, consumers beware: the company expects third-quarter average prices to be higher than a year ago. And this is due, at least in part, to the shift to higher-prices listings.Separately, the home sharing platform is also stepping up efforts to provide more single room rentals located inside homes and apartments. The move is designed to provide more budget friendly alternatives for consumers.
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Mia Taylor is an award-winning journalist who has two decades of experience. Most recently she worked as a staff writer for...
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