Airbnb Inc. shares surged Friday after the company reported record sales and earnings, proving the vacation-rental giant’s resilience even as the delta variant of COVID-19 prompted new travel concerns and restrictions.

Revenue grew 67 per cent to US$2.2 billion in the third quarter, Airbnb said Thursday in a statement. Analysts forecast US$2.07 billion, according to data compiled by Bloomberg. Net income of US$834 million far exceeded Wall Street’s expectation of US$456.2 million. The shares jumped as much as 12 per cent, the most since February, to US$200.52.

The San Francisco-based company warned in August that the number of nights and experiences booked in the third quarter, typically the busiest period of the year, would fall short of the total during the same period in 2019, due to the resurgence of COVID cases. But Airbnb, which dominates the market for alternative accommodations, has fared generally better than its rivals, benefiting as people opted to travel closer to home and often booked longer or more frequent stays to take advantage of flexible remote work policies. In September, Airbnb said it welcomed its billionth guest. 

Chief Executive Officer Brian Chesky has said the new travel trends born from the COVID era are likely here to stay. “But something bigger than a travel rebound is happening,” he said in a letter to shareholders. People “can now work from anywhere, travel any time, and stay longer. For those who can work remotely, we believe that flexibility will be the most important benefit after compensation.” 

The industry was plunged into a deep crisis early in the pandemic when lockdowns all but ground travel to a halt. Chesky was forced to cut thousands of jobs, pause non-essential projects and even considered putting the company’s IPO plans on ice. Airbnb rolled out a blanket refund policy and doled out more than US$1 billion in cancellation fees. By early last summer things were starting to look up and this spring Airbnb unveiled a major revamp of its services in an effort to woo hosts and guests amid a post-pandemic travel surge. 

Airbnb said it’s “encouraged to see these new travel trends extending beyond summer travel peak, and are looking forward to a strong” fourth quarter. As of the end of September, Airbnb’s backlog had more than 40 per cent more nights booked for Thanksgiving week in the U.S. than in 2019.

Airbnb said it anticipates fourth-quarter revenue to be US$1.39 billion to US$1.48 billion. Analysts were looking for US$1.43 billion. 

Analysts at Cowen Inc. estimate that the alternative accommodations category has increased to about 33 per cent of global lodging dollars from 24 per cent before the pandemic. And Airbnb commands more than 50 per cent of those bookings. In a report before Airbnb’s results were released, the analysts said they expect the alternative lodging category to hold onto most of its pandemic gains, tempered somewhat only by the eventual hotel-focused business travel recovery.  

Airbnb said gross bookings, which include room nights booked and experiences, more than doubled to US$11.9 billion. But that missed Wall Street’s estimates of US$12.2 billion. Earnings before interest, taxes, deprecation and amortization, excluding some costs, were US$1.1 billion. Earnings per share were US$1.22, beating the 77 cents analysts had predicted.

Airbnb is poised to see a further boost in demand after U.S. restrictions on travel into the country are lifted on Nov. 8, but it also faces stiff competition from rivals.

Earlier this week, online hotel booking site Trivago posted strong results and pointed to vaccine progress in Europe and the Americas as increasing travel. Booking Holdings Inc., Airbnb’s biggest rival, reported a strong third quarter with gross bookings up 77 per cent from a year earlier. Expedia Group Inc., which owns home-rental site Vrbo, swung to a profit, a feat it attributed to the “superior performance from Vrbo and domestic travel.”  

On a conference call with analysts, Expedia CEO Peter Kern said Vrbo has seen strong market share growth, particularly in the U.S. He said more than half of its customers so far this year have been new.