Airbnb reported mixed fourth quarter (Q4) results on Wednesday but highlighted a rise in bookings due to demand remaining strong.
ADVERTISEMENTRevenue climbed 17% to $2.2 billion in the same quarter a year ago, while adjusted earnings came in at $738 million, representing a 46% increase from Q4 2022.
However, net income came in at a loss of $349 million, according to the company’s latest earnings.
Its stock closed down 1.94%, at the time of writing, and was set to stay in the red ahead of Wall Street markets opening on Wednesday.
Q4 results follow tax dispute settlement
The company’s latest Q4 financial results come after Airbnb recently agreed to pay €576 million to resolve a year-long dispute with the Italian government over unpaid taxes.
In November, Italian prosecutors announced that the short-term rental platform owed $840 million (€779 million) in unpaid short-term rental taxes for Italian landlords using the platform between 2017 and 2021. Airbnb said it will not request its hosts to cover the amount.
On Wednesday, the San Francisco company stated that it’s developing new tools for hosts to automatically withhold and pay their taxes to the Italian authorities.
“The vast majority of hosts on Airbnb in Italy are ordinary families that are using the platform for supplemental income,” the company said in its statement.
“We hope the agreement with the Italian Revenue Agency and recent legislative changes will provide these families with certainty about the rules around hosting for years to come.”
In 2022, the Court of Justice of the European Union decided that member nations could mandate short-term rental platforms to collect income taxes.
“These improvements will make it easier for historic centers such as Venice and Florence to see who is hosting and how often, and to develop proportionate policy solutions in response. Airbnb is committed to working with Italian authorities to make the rules a success,” the company added.
Importance of Italian market for Airbnb
Italy represents a crucial market for Airbnb, with tens of thousands of hosts using the platform to rent out their properties.
The far-right government led by Prime Minister Giorgia Meloni has pledged to combat tax evasion associated with short-term rentals and to increase the tax rate for property owners from 21% to 26%.
As of 10 January, Airbnb was valued at over $90 billion (€82 billion).