Airbnb (NASDAQ: $ABNB) Closes 5% Higher on Friday, After Adding Currency Conversion Fee

Airbnb Inc. (NASDAQ: $ABNB) is an online platform that allows people to rent their property to travelers looking for accommodation, often for short stays. The company makes money via a commission on each booking. 

Airbnb Makes Changes to Cross-Currency Booking Fees

On Friday, January 26, Bloomberg reported that Airbnb had introduced a currency conversion fee. According to the announcement by Airbnb, guests will incur a new 2% fee on the booking amount, excluding taxes, if they pay in a different currency from the host’s stated currency. The change will raise the guest service fee by up to 16.5%.

According to TD Cowen, an analyst at Kevin Kopelman, the new fee could lead to an incremental profit of $200 million to $500 million for the company.

Airbnb spokesman Sam Randal said, “Sometimes we make changes to give us flexibility to offer and evaluate new products, features and policies, including fees.” 

He added, “The update to the service fee is an example of us enabling the ability to bring our platform in line with industry practices and is not anticipated to affect the majority of our guests as cross-currency transactions make up a smaller percentage of bookings.“

The change comes amidst Airbnb’s push into international markets. In its third-quarter earnings report, Airbnb highlighted the Asia-Pacific region and Latin America as its fastest-growing markets.

Airbnb 2024 Revenue Could Skyrocket After This Move

According to Factset, analysts predict Airbnb’s revenue will reach $11 billion in 2024. Furthermore, Jake Fuller, BTIG analyst, also estimated that this move could bring $290 million in revenue for Airbnb this year, citing an estimated 111 million nights booked cross-currency. Fuller maintains a neutral rating on Airbnb stock.  

The company stock rose 5.3% at the close of trading on Friday, January 26, 2024, to $149.62, its highest point since July last year.

CEO Brian Chesky has worked for years to make the company affordable for tourists and visitors and attract more customers to the website, which is one of their priorities. The company has returned to growth after a slump during the pandemic.

Airbnb is focused on expanding into underexplored international markets, particularly in Latin America and the Asia-Pacific. In the third quarter results, Airbnb reported a 17% increase in international bookings compared to last year. 

Stock Update: $ABNB

The company’s stock is trading at $149.62, with a gain of 5.28% from its previous close of $142.11. The current market cap is $95.895 billion, with 11.3M shares traded for the Friday’s session. 

Should You Buy ABNB Stock? 

Airbnb stock has gained more than 5% in aftermarket trading from its Friday closing after announcing the new fee. The company is working to expand its reach internationally, especially in Latin America and the Asia-Pacific. With these moves projected to bring in more revenue without a significant increase in costs, the stock is worth considering. 

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