The Wall Street Journal dropped a report offering some insight into how Airbnb and Expedia leverage the customer cash that's in their control between the time you book and the time you stay.
to try to catch up, interest rates were residing in the basement and the opportunities for online booking services to grab a little extra green on the idled funds were fairly limited.
But now interest rates on money market funds, Treasury notes and certificates of deposit have surged above 4%, bringing in tens of millions of dollars in additional income for those firms and making them an unlikely beneficiary of the Fed's record-setting series of aggressive rate hikes, according to the Journal.In the third quarter of 2022, Airbnb collected $58.
Airbnb held $7.5 billion in funds on behalf of customers as of June 30 and $4.8 billion at the end of September, according to its earnings reports to a Journal analysis. But it also noted the company's terms of service agreement makes clear that Airbnb can invest customer money and keep the interest.
In a statement shared with the Journal, an Airbnb spokesman said its payments system "is secure and simple for guests to use and ensures timely payment for hosts."Brad Erickson, an analyst at RBC Capital Markets who covers U.S. internet companies, told the Wall Street Journal that few other industries have control over such vast sums of customer funds.Expedia has also done very well recently when it comes to putting its customers' money to work.
The Journal reported that Expedia had $7.5 billion in traveler funds on its balance sheet as of Sept. 30 based on its earnings report. The company said it earned $20 million in interest income in the third quarter of 2022 — a tenfold increase from the third quarter of 2021. Like Airbnb, it doesn't say how much of that income is from customer money.
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