Global accommodation marketplace, Airbnb believes it will need to add millions of new hosts to accommodate guests as travel rebounds following COVID-19. Its positive view on the industry could spell good news for ASX travel shares.
Airbnb expects travel industry to bounce back
CEO Brian Chesky told CNBC, "I think that we probably will have a high-class problem where there will probably be more guests coming to Airbnb than we'll have hosts for because … we think there's going to be a travel rebound coming that's unlike anything we've ever seen."
In addressing the pandemic's impact on consumers, the company said, "while we believe that travel will change as a result of COVID-19, the adaptability of our business suggests that we are well-positioned to serve this dynamic market as it continues to evolve and recover".
Why this could be good news for ASX travel shares
As a global leader in the accommodation sector, Airbnb's optimistic forecasts further validate a recovery in the travel industry.
ASX travel shares, including Webjet Limited (ASX: WEB), Corporate Travel Management Ltd (ASX: CTD) and Flight Centre Travel Group Ltd (ASX: FLT), are a part of the travel ecosystem that is expected to rebound.
In some ways, ASX travel shares are playing into the same narrative as iron ore miners during a downturn in commodity markets. Household iron ore miners such as BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) focused on lower costs, laying in wait for prices to improve.
The same can be said about ASX travel shares that have made significant efforts to lower costs and improve existing technologies. Now all that's left to do is wait.
A critical catalyst that the market is looking out for is the resumption of international travel.
It comes down to overseas travel
Qantas Airways Limited (ASX: QAN) CEO Alan Joyce has said that the vaccination program is "absolutely key" to restarting international flights in and out of Australia.
While there have clearly been some speedbumps with the vaccine rollout, we are still planning for international flights to resume in late October. We remain in regular dialogue with the Government.
Conversely, there are concerns that it could remain limited until 2024.
While the topic of international travel might remain at a standstill, today represents "monumental" progress with the start of the trans-Tasman bubble. This means that Australians will be allowed to travel to New Zealand without the need to seek an exemption or undergo hotel quarantine.
International standstill but domestic boom
The resumption of international travel will continue to be the primary catalyst for a re-rate in ASX travel shares.
In response to Qantas' positive business update last week, Macquarie said that it would continue to monitor COVID-19 vaccine rollouts in key destinations like the United States and Singapore that formed a big proportion of its FY19 available seat kilometres.
While flights to North America or Asia won't be taking off anytime soon, domestic travel is expected to topple pre-COVID figures in the near term. Qantas forecasts domestic travel to reach approximately 80% pre-COVID capacity in the fourth quarter and 107% in FY22.
