Airbnb (NASDAQ:ABNB), headquartered in San Francisco, reported a remarkable second-quarter profit of $650 million, marking a surge of over 70% compared to the same period last year. The company attributed the growth to strong bookings for summer-vacation rentals. Despite an 11% increase in bookings over the previous year, some analysts found the figures slightly below their expectations.

To address complaints about high cleaning fees, Airbnb made changes to its site, displaying cleaning fees upfront during the price-shopping process. However, rental prices have remained persistently high. While the company had anticipated a slight decline in average nightly rates for the second quarter, rates actually rose by 1%, reaching $166 per night.

CEO Brian Chesky noted that the actual prices customers paid were lower than the list prices on average. He observed that customers were gravitating towards more affordable stays, leading to a modest increase in average rates, especially as more people booked larger homes.

Chesky mentioned that hotels were raising prices at a faster pace, but Airbnb was encouraging hosts to lower their rates slightly to attract more bookings, resulting in increased revenue for the hosts.

Airbnb introduced new tools for hosts to compare their prices with the nearby competition, which had a moderating effect on rates in the second quarter. However, the company anticipates third-quarter average prices to be higher than last year, partly due to a shift towards higher-priced listings.

The company has also been expanding its offerings to include more single rooms in homes and apartments, providing a low-cost option for younger travelers. Additionally, Airbnb is engaged in legal battles with cities seeking to impose restrictions or tighter regulations on short-term rentals.

The reported second-quarter profit of $650 million reflects a significant improvement from $379 million in the same period last year, which had included $89 million in restructuring charges. Excluding special items, Airbnb’s adjusted earnings were 98 cents per share.

Revenue for the quarter rose by 18% to $2.48 billion, surpassing analysts’ expectations of 80 cents per share on $2.42 billion in revenue, according to a FactSet survey.

Bookings in the quarter reached 115.1 million, up from 103.7 million in the previous year and more than one-third higher than 2019, prior to the COVID-19 pandemic. However, analysts had projected 117.6 million bookings.

Airbnb predicts third-quarter revenue to be between $3.3 billion and $3.4 billion, exceeding analysts’ expectations of $3.23 billion.

During the quarter, the company added a record number of new listings, taking the total number of listings to over 7 million.

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