New Lows Today @ 10am
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Top Losers Today @ 11am
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Earnings this week $ABNB, $DDOG, $TWLO
Several holdings reporting this week. Mainly sitting on current cash until I have had a chance to review earnings.

What I am watching:

  • Nights and experiences booked - 13% YoY growth Q1 2020 to 2021
  • Gross booking volume - 52% growth YoY 2020-2021
  • Travel continues to pick back up. $EXPE reporting 58% YoY growth in booking so anxious to see numbers from Airbnb

  • Customer count - 32% growth 2020-2021
  • ARR $100k+ - nearly 50% increase Q1 2020 to 2021
  • Dollar-based net retention ~ 130%
  • Customers using multiple products - 60% in 2021, 75% in 2021

  • Active customer accounts - Q1 2021 saw 23% YoY growth
  • Dollar-based net expansion rate - dropped from 140% to 133% in Q1 2021
Regulations on short-term rentals will hurt many parts of society
When government policymakers talk about regulating short-term rentals as a way to improve housing affordability, many think about $ABNB and $EXPE (owner or Vrbo) as being the most affected by these laws, along with their hosts and customers.

But according to the Cato Institute, there are more people that are negatively impacted by these regulations. Many hosts that live in areas that don't receive any benefits from their city's tourism industry are able to earn income from travelers looking for a cheap to stay. Seniors reap more income by renting out rooms to those same people. Small businesses see more business as travelers spend more at restaurants and shops.

From SF to Washington D.C., many rely on the income from Airbnb to pay their mortgages and other bills. It's a similar situation to the many workers that rely on ridesharing and food delivery gigs through $UBER $LYFT $GRUB and $DASH to pay their bills. Without these "share economy" and "gig economy" platforms, many Americans will have to eat through their assets before they go broke.

While there are research papers that have found short-term rentals to be a driving force for the price of rent, higher rents incentivize firms to build more housing supply. However, zoning laws have prevented firms from building more housing. In fact, there is research that points out that zoning laws have contributed immensely to the rising cost of housing in the SF Bay Area.

Thoughts?
Love your last paragraph. It is quite the catch-22. While short term rentals are a primary driver of high housing costs, they are a contributing factor. Eventually, demand will dry up and the increase in housing costs will start to slow or even reverse. We are starting to see that now as mortgage rates rise. Things will eventually normalize, but I am of the opinion that regulating short terms is not needed nor is it the correct approach.
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Upcoming Earnings Calendar (Feb 7th - 11th)
Hey guys!

A key week is ahead of us! Here's what I'm interested in:

  • $APPS - One of my largest holdings. I'd like an update on the progress of single-tap and the tests they were running with Meta $FB. I'm also interested in seeing how their device footprint is expanding after their latest deals.
  • $DIS - They've invested heavily on Marvel and Star Wars series for Disney+, so let's see if this translates to lower churn and higher growth.
  • $NET - Really interesting stock but the valuation seems too high. Let's see if there's a good opportunity to enter post-earnings.

Good luck!

If you'd like an easier way to track earnings dates, you can automatically sync your portfolio's earning dates to your personal calendar with just a couple of clicks here.

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The Travel Sector Needs Corporate Travel Back
The travel sector continues to be hit by COVID-19. Almost two years into the start of the pandemic and most companies in the travel sector are still well-below their pre-pandemic levels. However, there's optimism among the industry executives that travel will come back strong in the coming year.

The latest Fincredible MacroTalk goes over what company executives are seeing regarding the demand for travel. Here are three quotes that stood out to me:

  • $HLT: “Business travel continued to gain momentum, with midweek occupancy and rates improving meaningfully versus the second quarter. In the quarter, business transient room nights were roughly 75% of prior peak levels. Studies show that nearly 70% of U.S. businesses are back on the road, up 28 points from the end of the second quarter. With roughly 80% of our typical corporate mix coming from small- and medium-sized businesses and with the lagging recovery of larger corporate travel, we've taken the opportunity to continue our work from before COVID to further increase our focus on this segment of demand.”

  • $ABNB: “On October 15, I believe it was that date that President Biden announced the reopening of the borders for international travelers come to the United States. Within 1 week of that announcement, we saw a 44% spike in nights booked for stays, crossing borders coming into the United States on Airbnb for stays November 9 and later, which is when the borders would open. So what we are seeing kind of across the board is evidence of pent-up demand.”

  • $DAL“We hear regularly from our corporate customers that they're ready to get back to travel, see their clients face-to-face to renew business relationships and develop new ones. That sentiment is coming through loud and clear in our most recent corporate surveys. More than 90% of our respondents mentioned that they expect travel volumes in the December quarter to either be the same or outpace September quarter. Nearly 60% of our accounts are telling us that they've already reopened their offices with an additional 10% expected to open their offices before year-end.”

It's clear that demand for leisure travel is strong. All of the quotes in the MacroTalk point towards pent-up demand for leisure travel. When allowed, people are going on vacation and traveling.

However, corporate travel is still lagging. The decision to travel or not is a lot more complicated for companies, which has resulted in muted demand for corporate travel this year. There's hope that next year the demand for corporate travel will pick up, but there's no guarantee it will. Without corporate travel, a lot of travel stocks face an uphill battle.

If you'd like to read the whole post, here's the link: Fincredible MacroTalk December 15: Travel Demand.
Hi Alberto this is a great memo ! I am curious to know which companies you believe are best equipped for the uphill battle if corporate travel were to take longer to pick up?
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Rihard Jarc's avatar
$153.6m follower assets
NEWS: My $ABNB analysis is out!

  • Learn more about how the pandemic made $ABNB a stronger company
  • $ABNB operates in China
  • Airbnb influencers? Untapped potential
  • the Valuation vs competitors like $BKNG & $EXPE

Airbnb influencers is a VERY interesting concept. I can definitely see how Airbnb could also do a marketing campaign where they follow the day-in-the-life of a traveler and showcase what other travels can do/experience. The airbnb influencers might be the exact people to follow
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