Travel platform Airbnb (ABNB:NASDAQ) saw its shares jump more than 14% on 14 February, the biggest one day jump since its IPO (initial public offering) in 2020.

The source of the excitement was not just that fourth quarter earnings came in ahead of Wall Street estimates, but the hosting firm’s announcement of expansion plans, stemming from improvements in its technology platform.

CEO Brian Chesky said the company will invest between $200 million and $250 million to launch a new travel-related business in May 2025, which forms part of a roadmap to launch multiple businesses over time.

‘I think that each business could take three to five years to scale. A great business could get to a billion dollars of revenue,’ said Chesky.

‘We’re going to have one app, one brand, the Airbnb app. We want the Airbnb app kind of similar to Amazon (AMZN:NASDAQ), to be one place to go for all of your traveling and living needs,’ added Chesky.

None of this would have possible without Airbnb completely overhauling its technology stack over the past several years to create a new, modernised technology platform.

Importantly, the new features give hosts the ability to offer more services in the future while making communication between hosts and guests virtually seamless.

‘With this new tech platform, we can innovate faster and expand beyond short-term rentals into an extensible platform with a range of new offerings,’ the company said in a letter to investors.

Analyst Ralph Schackart at William Blair commented: ‘Over the longer term, the company has the opportunity to add incremental growth drivers such as experiences, among others, and the stock should grow at least in line with revenue growth.’

In the fourth quarter to the end of December the number of Nights and Experiences booked accelerated to 111 million, representing 12% growth over the prior year.

The company said it also saw a ‘notable’ acceleration in first time bookings on the platform. Gross bookings for the quarter increased by 13% to $17.6 billion, above Wall Street estimates taking full year bookings up 12% year-on-year to $81.8 billion. Growth in expansion markets grew at twice the pace of the company’s core markets.

Revenue increased 12% compared to the same period in 2023 to $2.5 billion and the company turned a net profit of $461 million or $0.73 per share, surpassing analyst forecasts of $0.58 per share.

Airbnb said it expects first quarter revenue to be between $2.23 billion and $2.27 billion, representing yearly growth of between 4% to 6% in reported currencies and 7% to 9% excluding foreign exchange movements. 

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