Airbnb Growth Driven by 'Reserve Now, Pay Later' Program Amid Rising Cancellation Rates
Airbnb (ABNB) reported its fastest revenue growth in three years, with third-quarter revenue rising 19% to $4.9 billion and gross booking value climbing 21% to $27.7 billion. A significant driver of this acceleration is the 'Reserve Now, Pay Later' (RNPL) program, which accounted for approximately 3 percentage points of net nights growth in Q3. Deutsche Bank analysts suggest that without this financing feature, core home growth would have been closer to 12% rather than the reported 16% increase in nights booked. However, this growth comes with increased volatility; cancellation rates rose to 19%, up from 16% a year prior. The RNPL program encourages higher cancellation frequencies compared to upfront payments. Despite these risks, Deutsche Bank maintains a 'Buy' rating on ABNB, raising its price target to $220, noting that the company's performance reflects strong execution rather than just broad travel demand trends.