Airbnb (ABNB) Q3 2026 Earnings Call: Growth Accelerates, Outlook Raised

Key Takeaways

• Airbnb’s Q3 2026 revenue increased 19% year over year to $4.9 billion, its fastest revenue growth in more than three years. Gross booking value rose 21% to $27.7 billion.
• Nights and Seats Booked grew 16% to 155 million. Reserve Now Pay Later contributed a 3-percentage-point net lift, with growth of approximately 13% excluding that impact.
• Adjusted EBITDA increased 22% to $2.5 billion, while adjusted EBITDA margin expanded to 52% from 50%, supported by revenue growth, cost discipline and AI-driven customer-support efficiencies.
• Management raised its full-year 2026 outlook to high-teens revenue growth and an adjusted EBITDA margin of approximately 36%.
• Airbnb is expanding beyond homes into hotels and services. Hotel bookings accelerated in Q3, while management said hotels could generate multiple billions of dollars in annual revenue in the coming years, without providing a timeline.
• AI resolved approximately 40% of customer-support issues without a human agent, up from one-third in Q2, helping reduce customer-support cost per booking by more than 17% year over year.

Key Financial Data

Airbnb also announced a new $12 billion share repurchase program in addition to its remaining authorization.

Business and Operating Performance

Growth accelerated across Airbnb’s geographic footprint. Nights booked rose at low-double-digit rates in North America, at a mid-teens rate in EMEA, and by more than 20% in both Latin America and Asia Pacific. North American nights grew at their fastest pace in four years.

Expansion markets also strengthened. Nights booked by guests in those markets grew at the fastest pace in nearly three years, including growth of more than 30% in Brazil and more than 60% in India.

First-time booker growth accelerated to 13%, the highest rate since early 2022, with Gen Z the fastest-growing segment. Nights booked through the Airbnb app increased 25%, and the app accounted for 66% of total nights booked.

Reserve Now Pay Later was available for more than 40% of platform gross booking value in Q3. The product increased bookings, extended lead times and supported bookings of more expensive listings. Aggregate cancellation rates rose by 200 to 300 basis points, from roughly 16% a year earlier to about 19%.

Hotels remained a strategic growth area. Airbnb had thousands of boutique and independent hotels across more than 60 major destinations, and hotel bookings accelerated during the quarter. The company said approximately 35% of guests whose first booking is a hotel return to book a home within one year.

Airbnb also expanded services, including car rentals, meal delivery, laundry, baby gear and local offerings such as ski equipment and boat rentals. Its American Express partnership brought more than 1 million Airbnb listings to Amex Travel. Nearly one-quarter of early bookings through that channel came from guests new to Airbnb.

AI increased Airbnb’s product-development pace. The company shipped more than 50 products and features in Q3, nearly 70% more than a year earlier. New capabilities included natural-language AI search, listing summaries, comparison tools and host tools.

The company plans to begin rolling out its travel-focused AI agent in the first half of next year. Management said the interface will combine maps, photos, calendars, comparisons and itineraries rather than relying only on text-based chat.

Management Guidance

For Q4 2026, management expects:

• Revenue of $3.22 billion to $3.28 billion, representing 16% to 18% year-over-year growth.
• An approximately 2-percentage-point FX tailwind after hedging.
• Gross booking value growth in the mid-teens.
• At least low-double-digit growth in Nights and Seats Booked.
• A modest increase in average daily rate.
• A slight year-over-year increase in implied take rate.
• Year-over-year adjusted EBITDA growth, with adjusted EBITDA margin slightly below Q4 2025 due partly to the timing of marketing spending.

For full-year 2026, Airbnb raised its revenue-growth outlook to the high teens from the teens previously. It also increased its adjusted EBITDA margin outlook to approximately 36%, compared with at least 35.5% previously.

Management expects the full-year adjusted EBITDA margin to be modestly above the free cash flow margin because Reserve Now Pay Later defers customer payments and affects working-capital timing.

Risks and Areas to Watch

Reserve Now Pay Later supported booking growth but also increased cancellations and deferred guest payments, creating pressure on working capital and near-term free cash flow. Management said Q3 represented the peak net benefit to Nights Booked, with the contribution expected to decline sequentially in Q4 as cancellations are fully reflected.

The Q3 implied take rate declined slightly because Reserve Now Pay Later increased gross booking value before the related revenue was recognized. Incentives and credits for new business initiatives also created pressure, partly offset by travel insurance and the shift to a single service fee.

Airbnb’s Q4 outlook does not assume a material, persistent impact from developments in Europe, including France, or conflict in the Middle East. Management said it is monitoring both regions.

The AI travel agent remains under development. Management acknowledged that a specialized agent must be materially better than a general-purpose agent to overcome user inertia and switching costs.

Analyst Q&A Highlights

Dynamic pricing: Management described pricing as one of Airbnb’s largest growth levers. Early adoption of dynamic pricing was characterized as strong, with the company seeking to improve host revenue through higher occupancy while making some nights more affordable for guests.

Hotel opportunity: Management said hotels are growing materially faster than Airbnb’s core business from a small base. Existing organic traffic could support hotel growth because users who cannot find a suitable home may otherwise leave Airbnb to book a hotel elsewhere.

AI and external travel inventory: Airbnb plans to integrate additional travel providers through APIs and Model Context Protocol connections. The long-term objective is to enable native booking across travel categories within the Airbnb app, although management did not provide a timeline.

Insurance: Travel-insurance revenue grew nearly 70% year over year, with attach rates increasing in every region. Insurance remained attached to a single-digit percentage of bookings, and management highlighted its attractive margins and potential for additional guest and host products.

Inventory differentiation: Airbnb estimates that more than 60% of its inventory is unique to the platform. Management said the absolute volume of exclusive inventory matters more than its percentage as Airbnb adds commodity categories such as hotels and car rentals.

Loyalty and social features: Management confirmed it is evaluating a loyalty program as Airbnb adds more travel categories. The company also plans to expand social travel features intended to support trust, collaborative group planning and recommendations from friends.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Operator

Good afternoon, and thank you for joining Airbnb's Earnings Conference Call for the Third Quarter of 2026. As a reminder, this conference call is being recorded and will be available for replay from the Investor Relations section of Airbnb's website following this call.

I will now hand the call over to Andrew Slabin, Vice President of Investor Relations. Please go ahead.

Andrew Slabin

Good afternoon, and welcome to Airbnb's Third Quarter of 2026 Earnings Call. Thank you for joining us today. On the call with us, we have Airbnb's Co-Founder and CEO, Brian Chesky, and our Chief Financial Officer, Ellie Mertz. Earlier today, we issued a shareholder letter with our financial results and commentary for our third quarter of 2026. These items were also posted on the Investor Relations section of Airbnb's website. During the call, we will make brief opening remarks and then spend the remainder of time on Q&A.

Before I turn it over to Brian, I'd like to remind everyone that we will be making forward-looking statements on this call that involve a number of risks and uncertainties. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are described under forward-looking statements in our shareholder letter and in our most recent filings with the Securities and Exchange Commission. That being said, we urge you to consider these factors and remind you that we undertake no obligation to update the information contained on this call to reflect subsequent events or circumstances.

You should be aware that these statements could be considered estimates only and are not a guarantee of future performance. Also during this call, we will discuss some non-GAAP financial measures. We've provided reconciliations to the most directly comparable GAAP financial measures in the shareholder letter posted to our Investor Relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results.

And with that, I will turn the call over to Brian.

Brian Chesky

All right. Hey, everyone. Thanks for joining. When you look back at our results, over the last several quarters, there is a clear story emerging. Airbnb is back in growth mode. It's rare for a marketplace of our size to reaccelerate growth, but that's exactly what we're doing. Q3 was our fastest revenue growth in more than 3 years. Revenue grew 19% year-over-year to $4.9 billion. Gross booking value grew 21% to $27.7 billion and Nights and Seats Booked grew 16% to $155 million.

We've also exceeded our outlook across every key metric, and we're seeing the acceleration across the business. In Q3, every region developed to deliver double-digit nights growth. Growth accelerated in all 5 of our core markets: U.S., France, U.K., Canada and Australia, nearly all of our expansion markets. In North America, nights booked grew at our fastest pace in 4 years.

We're also seeing more guests return to Airbnb and more people try it for the first time. First-time booker growth accelerated 13%, now this is the highest it's been since early 2022, and the fastest-growing segment is Gen Z. Our nights booked in our app grew 25% and now 66% of our total nights booked are in our app.

Now I want to start by explaining what's driving this growth. This did not happen overnight. Airbnb grew incredibly fast when we started. But eventually, our technology and the way we operate couldn't keep up -- so a number of years ago, we started by rebuilding the foundation. This was immediately after our IPO. We spent years rebuilding our technology platform. We redesigned the app. We improved our core experience. And a lot of this was pretty standless at the time because we had to trade in some near-term growth to make these very important investments. We did this for the long-term growth of the company. And technology alone was not enough.

We also had to fundamentally change how the company operates. We organized the met around a single road map, we brought all these teams together, and we focused small teams on very specific problems. Then we developed an entirely new way to build products and it was inspired by the original early days of Airbnb of my Co-Founder. And Project Hawaii, this -- what I've talked about in prior earnings calls was our first big bid point. I took a very small team I worked with them very nearly daily, we had 1 job, make it easier to find and book a home. And this team, they work relentlessly, and they ship hundreds of improvements that generated hundreds of millions of dollars of revenue. And so we're like, wow, that works.

Let's take this approach and we start applying it to other teams. So we took this and we applied it to the pricing team, and they were able to deliver hundreds of millions of dollars in incremental revenue. then we took it to international expansion. We gave them more autonomy moved really quickly, and we're seeing results of that team as well. For example, in Q3, nice booked by guests in our expansion markets grew at their fastest pace in nearly 3 years. Brazil grew more than 30% and India grew more than 60%. We also began building new businesses, including hotels and services, and we broadened experienced leaders to help scale them.

And then AI change the speed of everything. We spent years laying the groundwork, but now AI is helping us build, test and improve products faster than we've ever done before. In Q3 alone, we shipped more than 50 products and features. -- nearly 70% more than a year ago because of AI. So when you put it all together, that's what's driving our growth. We spent years changing how urban be operates. And now we're seeing the results.

Now let me share a few updates in the quarter, starting with our fall update. When people book a trip, they don't just care about the home, they care about where it's located. In fact, 75% of our guests use every maps in deciding where to stay. That's why we introduced Neighborhood pages, which help guests get a better feel for an area before booking, including the best restaurant activities and more. Now we started these Neighborhoods pages in Paris, where we saw a really big meaningful increase in bookings. So now what we're doing is we're bringing the neighbor of pages to over 1,500 Neighborhood pages around the world on Airbnb by the end of the year.

Now this is going to be massive because when you stay in Airbnb, you're often staying in a neighborhood and how do you get that information, it's really hard to find in Google. And this is going to be really useful. We're also helping guests plan trips with recommendations from friends and family. We expanded connection, so guests can see where people they know stayed and what they recommend. And our new travel map brings those trips and recommendation together in 1 place.

Now for host, we designed our multi-listing calendar. It makes it easy to manage multiple listings, update pricing and fill up at night. And the first month of early access, nearly 1 in 4 eligible hosts opted in. We're also bringing in rural cost leaders to help drive our next phase of growth. In September, Pine Rivers joined us as Chief Business Officer. Pine was one of the key leaders behind Booking.com's growth. He ran its entire accommodations business, including hotels and homes and led one of the largest for marketing operations in the world. He now leads Airbus Homes and hotels businesses as well as our international expansion.

Now one of the biggest opportunities ahead of us is hotels. And we started small with a pilot in just 4 cities. Today, we have thousands of boutique and invented hotels in Airbnb across more than 60 top destinations, and hotel bookings accelerated again in Q3. Now what's even more exciting is that hotels are bringing new guests to Airbnb. In fact, approximately 35% of guests reversed whose first booking is a hotel. They come back and they book a home within a year. The hotels aren't just a new business for Airbnb. They're also helping us grow our homes business. Services are also becoming a bigger part of Airbnb. We launched car rentals this summer, and they've quickly become one of our fastest growing services.

In Q3, we announced new services, including meal delivery, laundry, baby gear, and we also have local offerings like ski gear if you go in skiing or boat rentals, if you near an ocean or lake. And one of our biggest untapped growth opportunities is actually partnerships. Because for nearly 18 years, partnerships really weren't a major part of how we grew. It was mostly just organic. That's changing because we partner with airlines like Delta, Qantas and TAP Air to reach millings travelers through companies they already use.

In October, we launched our biggest partnership ever, an exclusive partnership with American Express, bringing more than 1 million Army listings to Amex Travel. Now it's still early, but we're seeing thousands of bookings through Amex Travel with nearly 1/4 of them coming from guests who are new to Airbnb and we're seeing share of luxe booking and we typically see on Airbnb. So of course, they're bringing in a really high-end segment of travelers that we haven't typically had as much access to.

Now I want to spend a few minutes talking about AI. I believe AI is one of the best things to ever happen Airbnb. And I want to give you a few examples of what we're doing with it. In Q3, we brought AI into more of the guest and host experience. For guests, we introduced AI search, so they can describe we're looking for in their own words and find the right home service experiences for the trip. So if you want a CII search, just go to our app or a website and you see the very top of the page, there's a toggle. If you open the turn toggle on you can basically type entire sentences like natural language, and then it will basically select all the filters. It's working really well. It's especially popular with Gen Z and younger travelers are very AI native.

AI can also suggest relevant social search filters I can summarize important details of homes and help guests compare places their savings. For host, we're using AI to make it easier to create 3D 4 plans. These are really cool. They can help you price your homes competitively and understand how the listings are performing.

Now we're all seeing AI to transform customer support. Our AI system is now available in more than 50 languages, and this next stat is really key. In Q3, -- approximately 40% of all customer support issues were resolved without a human agent. And this is up from 1/3 in Q2. So this has been huge for us. and we're expanding our assistant to voice support in the U.S., so guests and hosts can help get faster help over the phone. What this means is that customer support cost per booking has declined more than 17% and year-over-year, driven in large part by improvements to our AI assistant.

And if you're wondering, customer service NPS is as high as it's ever been. But these improvements are just the beginning. There's a lot of discussion about whether people will eventually use one AI agent to do everything. And if they do, what does that mean for Airbnb? Are we going to be put out? Well, I don't think people are going to use one AI agent for everything. You see today's AI agents like Muse and Instinct are good at simple routine tasks like making a restaurant reservation or scheduling an appointment. But planning a trip is different. Travel is aspirational, discovering where to go and where to stay as part of the experience.

In fact, 80% of travelers say they enjoy spending time researching trips. People want to look at photos. They want to compare home. They want to make this the people they're traveling with -- and I don't think the general purpose agents are the best to do that. So that is why we are building our own AI agent. And we have 3 distinct advantages when we build our own agent. First, we understand the Airbnb marketplace better than anyone. For nearly 20 years, we've helped guest or host and host find places to stay with -- we help guests find places to stay with Molina host. Every home is different. -- guest care about the home, the location, the reviews and the person hosting them. And we spend years learning how guests make the decision and how us operate. So the understanding gives us a significant advantage in building the AI agent help people find the book the right place to stay. Second, we are part of the reservation itself.

Now this is important because we know that travel doesn't end with the booking. In fact, that's when it starts. Because the everybody handles reservations, payments to customer support, our agent is able to help guests throughout their trip. This means we can manage reservations. We can help you make changes to your plans and accessing Airbnb support and protection when they need them. These are things in outstate agents cannot do easily on their own.

And third, and perhaps most importantly, we're building a new interface specifically for travel. We don't think the traditional chatbot is the right way to plan travel. It's the wrong interface. So what we are doing is developing a custom-designed, AI native experience to respond to what guests are looking for. So instead of relying on traditional chat alone, which is very tech heavy, which again is definitely not the way you should plan travel, -- our agent draws from a library of hundreds of travel-specific interface components, maps, photos, comparisons, calendars, itineraries and compose them in real time to match what they're looking for.

This is going to feel a little bit like generative UI in the sense that it's going to offer up the right interface at the right time for your specific travel needs. Now it's going to help guests explore options, make decisions with people they're traveling with and take action trucking. And over time, we want our agent to help guests plan their entire trip on airing all in 1 place. We're going to start rolling it out to guests in the first half of next year. So I'm going to end where I started. Airbnb is back in growth mode. We're excited about what we're building and with the momentum we're seeing across the business, we're raising our full year outlook.

With that, I'm going to turn it over to Ellie.

Ellie Mertz

Thanks, Brian, and good afternoon, everyone. I'll start with Q3 results and then to our outlook for Q4 and the full year 2026. As Brian shared, Q3 was a strong quarter with a meaningful acceleration across the business. Gross booking value was nearly $28 billion, up 21% year-over-year, a 5 percentage point acceleration from Q2. This was driven by strong growth in Nights and Seats booked and a moderate increase in ADR. Nights and Seats booked grew 16% year-over-year, accelerating significantly for Q2, with strength across all major regions and market types.

Q3 nights benefited from a 3% net lift from the expansion of Reserve Now Pay Later. So excluding the impact of RPL, Nights and Seats booked growth was approximately 13%, still accelerating from Q2. ADR was up 4% year-over-year or 5% excluding FX and who was up across all regions with notable strength in North America and Europe. On a regional basis, we saw low double-digit growth in North America, mid-teens growth in EMEA, over 20% growth in both Latin America and Asia Pacific. These results were an acceleration across all 4 regions relative to Q2.

Turning to our Q3 financial results. Revenue grew 19% year-over-year to $4.9 billion or 16% excluding FX. Significantly exceeding the high end of our outlook. Net income was $1.9 billion, a 39% net income margin. Net income benefited from a $135 million reduction in our provision for income taxes as the prior year included a $213 million valuation allowance related to CMT Credit.

Adjusted EBITDA grew 22% year-over-year to $2.5 billion, representing an adjusted EBITDA margin of 52%, up from 50% in Q3 of last year. Margin expansion in Q3 was driven by strong revenue growth and cost discipline. -- including operating leverage from AI-driven efficiencies and customer support as well as the shifting of certain marketing expenses to Q4.

Let me take a moment on monetization and take rates. Our implied take rate was 17.6% in the quarter, down slightly year-over-year. That was primarily due to the expansion and strength of Reserve Now Pay Later, where guests book further in advance, increasing GBV before we recognize the associated revenue and to a lesser extent, higher incentives and credits related to new business initiatives. Partially offsetting these pressures to implied take rate, our guest travel insurance and our migration to single service fee. Guest travel insurance continues to build momentum. Revenue grew nearly 70% year-over-year with higher attach rates in every region.

Lastly, in October, we completed the final phase of our fee simplification initiative, whereby nearly all of our remaining hosts have now moved to a single 15.5% service fee. We've already seen that the single service set helps post price more competitively and creates greater transparency for our guests.

Next, our balance sheet and cash flow. We continue to benefit from our efficient and capitalized business model delivering $1.4 billion of free cash flow in Q3, up modestly year-over-year. We expect that free cash flow would have grown more in Q3 absent the impact of Reserve Now Pay Later bookings on working capital. RNPL defers guest payments from the time of booking closer to the date of stay impacting the seasonality of other needs. Free cash flow during Q3 was also impacted by a $75 million increase in purchases of property and equipment driven by our new office building in New York City. Over the trailing 12 months, we generated $4.9 billion of free cash flow, a 35% free cash flow margin.

Finally, during Q3, we repurchased $700 million of our common stock enabled by our strong balance sheet and significant cash flow generation, leaving $2.7 billion remaining under our existing authorization. And today, we're pleased to announce Board approval of a new $12 billion share repurchase program on top of this existing authorization. This reflects the continued confidence in our business performance, our ability to generate strong free cash flow as well as our commitment to returning capital to shareholders, which remains important to our capital allocation strategy.

Now let's turn to Q4 and full year 2026 outlook. We're encouraged by the meaningful acceleration we've delivered as well as the momentum we're seeing into year-end. Although we're closely monitoring ongoing developments in Europe, underlying global travel demand remains healthy and our faster pace of product innovation continues to drive results and our Q4 outlook reflects it. For Q4, we expect revenue of $3.22 billion to $3.28 billion, representing year-over-year growth of 16% to 18%. This include an approximate 2 percentage point FX tailwind after factoring in our hedging program.

We expect our implied take rate to be up slightly year-over-year. We expect GDV growth in the mid-teens, driven by at least low double digit -- low double-digit growth in Nights and Seats booked and a modest increase in ADR.

In Q4, we are not assuming a material persistent impact related to the 10 in Europe, specifically France or the complex in the Middle East, but are closely monitoring trends in both regions. On profitability, we expect adjusted EBITDA to increase year-over-year and adjusted EBITDA margin to be slightly down compared to Q4 2025, partially due to the timing of marketing spend that is earlier.

Now for the full year, once again, we're raising our revenue and adjusted EBITDA margin outlook despite facing more difficult comparisons as we head into Q4. We now expect year-over-year revenue growth in the high teens up from teens last quarter and our expectation at the beginning of the year of low double-digit growth. And we now expect full year adjusted EBITDA margin of approximately 36%, up from at least 35.5% last quarter.

During 2026, due to the expansion of Reserve Now Pay Later and its impact on the timing of working capital. We expect full year adjusted EBITDA margin to be modestly above our free cash flow margin. To close, Q3 demonstrates that the product and business changes we've made are translating into real financial outcomes, faster growth and expanding margins. We're encouraged by the progress we've made so far and the durability of our results.

Lastly, our product road map is robust and gives us a clear path to driving growth into the future. With that, I will open it up to Q&A.

Operator

[Operator Instructions] Your first question comes from the line of Richard Clarke from Bernstein.

Question-and-Answer Session

Richard Clarke

I guess, firstly, on dynamic pricing. I guess in Q2, Brian, you said you thought dynamic pricing was a bigger opportunity than Reserve Now Pay Later. You've been out with that product for about a month now, just early learnings across the sign-up you're getting from host? And do you still stick with that? And just very quickly early, I think you said take rate up in Q4, why the reversal there? Is that because you're now lapping Reserve Now Pay Later? Or is there any other initiatives that are adding to the take rate in the fourth quarter?

Brian Chesky

Richard, so I'll take the first part. So yes, well, I think generally, pricing is probably one of the biggest levers we have, certainly in pricing. Just to give you a quick anecdote. A couple of months ago, we hired the Pine Rivers from Booking. He's our new Chief Booking Officer. And he was really instrumental in the early days of booking. And one of the things he said when he joined, he said, if you think Reserve Now Pay Later say, "Wait, you see we can do a pricing. It many Reserve Now Pay Later -- and it actually kind of makes sense. If you sell a product, customers care about 2 things: how good is the product and what is the cost? So it's really 50% of the buying equation and affordability is portion bearing because we have a lot of young travelers. -- it's much more economic stay-home, -- we're very much gen-based. We don't need data to share today about dynamic pricing, but the adoption is really great.

I think one of the things we've noticed, this is a really key point is that -- there is this win-win where dynamic pricing can generally lower prices across the marketplace. -- it still now host to make more money. So some nights, they make more money other than they say less. We were really able to find these cities where if you just charge like $10 less, you'll make enough more bookings that you'll actually make a lot more in the long run because your occupancy is much higher -- and that is like not an intuitive thing and it's good for the guest because it makes it a little more affordable.

And so it's a really huge lever. It's extremely early. This is something that like AI is really good at doing. And the thing about AI is like you need to tune it and get more data. So I think in the coming quarters, we should be able to have some more results. But again, I'll just kind of summarize by saying pricing is a massive lever and actually dynamic pricing is 1 of many things we're doing around pricing. .

Ellie Mertz

Great. And Richard, to answer here, take great question. about Q4, just been double in Q3 to explain the changing dynamic of or--are in Q3, we got an outsized impact of Reserve Now Pay Later on the gross booking value in quarter whereas obviously, the revenue from those bookings is delayed. And so in Q3, you see the impact is Reserve Now Pay Later increases denominated or bringing down the implied take rate at similar either versus in Q4, you should expect a modest increase in my take rate.

More broadly, I would say from quarter-to-quarter, there are some small timing movements that do impact take rate. But I want to call out as a single service fee as well as insurance should provide over a longer time period, a modest increase in terms of the overall rate.

Operator

Your next question comes from the line of Lloyd Walmsley from Mizuho.

Lloyd Walmsley

A couple if I can. First, just on the hotel effort. Can you kind of give us an update of how growth here is performing relative to the core, maybe or any other helpful quantification? And sort of where do you think this could be over the next few years as a tailwind?

And then second one, I appreciate all the color about agents in the shareholder letter very helpful. Curious, Brian, do you sort of see a path to your agent helping customers with travel sort of beyond the walls of Air DMD? Or do you think it's more limited to taking action and sort of managing services that you all provide yourself? Like how do you see that evolving over time? I know it's early, but curious to get your vision on that as well.

Brian Chesky

Yes. Okay. So hotels and agents beyond the wall even hotels are growing markedly faster than our core business. That's not another core business growing slow, just the hotel is already $900 billion market off of a very, very tiny base. I certainly don't want to put any like projections out there or forecast. But it's undoubtable that we will do multiple billions of dollars in revenue in hotels in the coming years. And we don't even need to like win this market to be a significant player and make billions of dollars.

And part of the reason why is we have a huge amount of traffic most people come to Airbnb are looking for a place to stay. If somebody doesn't find a place at they're probably going to another app or a website booking hotel. So -- we don't have to win. We just have to get the people in our store to buy some before they leave. And they know the -- we know they want something, they're in the store in the first place.

And the other thing is we're seeing -- this next thing was very surprising to me. every , when we started Airbnb, I was a little ideologically like not -- I was kind of against hotels. Let's be honest. My first half was forget hotels. And so we had a little animosity with the hotel industry, like in 2010, 2011, 2012, over the last 6, 7 years, really changed my tune approach. I'd like to think of this as growing up a little bit and being practical. And our guests told us, hey, we love hotels.

We bought hotels tonight before the pandemic. But we really decided to get serious about hotels a couple of years ago. And basically, one of the things we learned is that actually most people like staying in homes and hotels, it just depends on the type of trip. And that we don't have a campaign about why people stay at home, but if you're booking last minute for business travel, one night, hotels are really great. So we expect people to want to book hotels.

The thing I wasn't expecting was the reception from the hotel industry. And it was a complete 180 right Bank Hotel suddenly saw Airbnb a major ally. They really love the way they were merchandised. They love the fact that we were entirely new audience. We were disproportionately Gen Z. We are not just really affordable travel. We're actually really high-end travel because we have really big bills we are a much more global audience and they just like the factor is this for another channel.

So all that is to say, when we got really serious about hotels, it's not the only reason I hired Pine Rivers, but it was definitely a big thing. I told the Pine, this is a major opportunity for Airbnb. And it is going to be huge. And by the way, Pine Rivers ran the largest marketing organization ever at Booking.com. Now, I don't think performance marketing is a very important part of our core business, but I think with hotels. It's a commodity.

I think we're going to be able to do performance in really efficient because hotels are so high ABR Booking.com shows it's very profitable. But the best thing is we don't need to do a lot of it because we have so much organic traffic already coming in. So all of which to say it's going to generate many billions of dollars of revenue. I don't know what the time line is, but it's a huge opportunity. With regard to agents going outside the wall there yes, of course.

We are going to be -- that will be through MCPs. We're going to be integrating a number of MCPs with our trip agent in the first half next year. I won't give away too much more. We like to do these product launches. We don't want to build a general agent. Just to double click for 1 second. The problem -- if I just want to double click on a second, 1 problem with a general agent is you have to create like a general interface because the agent has to be able to do everything. So the general interface generally becomes almost entirely text based, right? Because we can have about travel medical information deliveries, you can't know what they're going to add.

As you get more specialized, you can develop a really custom interface that is perfectly bespoke for that type of use case. So with travel, working with the design these really custom components. If you want a car rental, the agent generates this little UI of a par and it's like beautifully in like a custom-generate interface. If you want to invite co-travels the agent helps you.

So there's going to be, I think, an incredible user interface experience that what I would describe as a kind of post chat-based interface. It's going to have and element to it. And so that's what we're going to be doing. It will be able to go outside the walls of me, but it's going to stay within travel and expect in the first half of next year.

Operator

Your next question comes from the line of Ken Gawrelski from Wells Fargo.

Kenneth Gawrelski

I appreciate it. Brian, I appreciate the commentary and the prepared remarks in the shareholder letter around the agent launch -- could you talk a little bit more -- and you just kind of elaborated that it actually could leave the walls of Airbnb -- can you talk about -- are you talking about actually direct -- maybe direct integrations with airlines and et cetera, to kind of complete the full trip.

Because I guess the question is for a vertical agent, if you don't have all supply, you don't have all attractions, you don't have all hotels. How do you think about the trade-offs for the customer between that horizontal general purpose agent, which may not be ideal for travel, but at least it sees everything. That's question one.

And two, the second one, please. if you don't mind, could you just -- and I apologize if I may have missed some of this. But could you talk a little bit just about the -- what you're seeing with RNPL as you continue to expand there. could you give us some confidence around cancellation rates and anything you knew you might be seeing there? .

Brian Chesky

All right. Yes, I'll do the AI agent, and then I'll hand over to Ellie for Reserve Now Pay Later. So the short answer is, yes, we are going to do integrations with a lot of providers. I don't want to give away too much again about our kind of product road map -- but I think it's safe to say we're going to do every part of travel. There's not 1 part of travel that we're not eventually going to do.

And every part of travel will have MCPs. We will have APIs -- and eventually, we do anticipate all bookings going through the app for every vertical and travel. I don't want to put a time on it. Just to give you an example, like say car rental. Right now, car rentals is done through a partnership called [ Troller ] and it's what we call link off. So an API but as a link off. The next phase is to the reservation booking directly on Airbnb. And so that's what we're doing with a number of these partnerships. So the kind of way we're going to do a lot of these partnerships is to get mass scale. We're kind of doing like link off. The link offs appear to feel like Airbnb.

So it's really in a -- like a web view that's designed in our customer interface, a with groceries -- this is with Legas storage, it's a car rental. And over time, we're going to develop a much more native booking integration. And obviously, the good of that is it's a little more seamless. You take a little bit greater cut of the revenue, but you also to handle customer service. So you have to be sure you're ready for that.

Now the great thing of it linkup is we can kind of decide and test what things we want to integrate when. But the end game is yes. The end game is eventually, we like all travel to be able to book natively through the app of Airbnb, but we're not going to put a time line on it. And then the other part of your question was general versus horizontal, right? Okay. So with regards to general versus horizontal and trade-offs, I mean, listen, there is going to be a reason for general agents. I'm not saying that there won't be general agents, but I want to just give my view.

I don't think I think a lot of people are looking at general agents like and they're trying to connect it to Google. Like there was 1 home page of the Internet. It was called Google and you went there and everything started at Google. This is my opinion. I do not think that's going to happen with chatbot. I don't think there will be 1 chatbot that's like Google in the front page, and it is the orchestra conductor for every other app. I'll tell you a couple of reasons why that I don't think that will happen.

The first problem is if that were to exist, I think it would have to exist to say operating system level. It exists at the Android operating system level at the MAC iOS operating system level. The operating system is the right substrate to control your apps. You get one app was the home page. You're really saying an app is going to control all the other apps.

By the way, you really think Apple is going to allow an app to control their entire computer. So we're considering all the potential issues for privacy security and that they can actually cut out of their own like user experience. I'm actually quite skeptical of that. So I do think that general SAT agents are going to be successful in popular. I just don't think they're going to be do everything.

And the burden of a general chat agent doing everything, they basically almost become an operating system. That is a lot to put into an app, and I just don't think that's going to happen. So I do think general Chase will be popular for single everyday things. I think as they get really, really complicated, specialization is going to win. -- now the changing can hand over to a specialized agent, but a lot of people are going to go direct to the specialized agent, just like they discover Airbnb on Google, and they come back direct. They don't just keep going through Google. That is generally my thought.

Now a general agent does have a bunch of data because you use the general agent more frequently, right? At the same time, we can connect MCPs of Gmail and Google Calendar. If you connected MCP of Google Calendar in Gmail or other MCPs, we can actually pull in what the users can send a ton of other data. So actually, there's many ways we can get as much data or nearly as much data or nearly as much data as a chat agent use every day. And this is just through ASIC MCP handoffs.

So I think basically, the way to think about it is -- in order for specialization to win, it must not be 20% better. It must be like 2, 3, 5x better than a general agent at its task because you do have the inertia and the switching costs. So our job isn't to be 20% better, it's to be multiples better. And that's the bar we'll maintain, too. We'll see if we can get there, but I'm pretty confident.

Ellie Mertz

Great. Ken, let me tell you just a little bit more about what we're seeing on Reserve Now Pay Later. Just as a reminder, Reserve Now Pay Later, we began to launch a year ago in the U.S. We expanded amongst our plus moderate inflation policy listings at the end of the year to retool. And then most recently, at the beginning of Q3, we expanded eligibility of Reserve Now Pay Later to limited and firm penciling policies. .

In doing so, it obviously grew materially the total eligibility of GBV on the platform for this product. As of Q3, it was over 40% of GDP was eligible to use -- in doing that expansion, we've seen a couple of things. First is a material lift to bookings. In particular, in Q3, we saw a full 3 points of net night lift associated with both the expansion and the PASeligibility offering. This was an incremental point or more relative to the impact we saw in Q2. candidly, that the expansion in the summer was even better than we had tested in terms of the reception for consumers. I

think it's probably pretty obvious, but this product make traveling more affordable, I need to pay upfront. And what we see is that people not only before they book earlier, so our lead times have expanded and they booked more expensive listings, which is one of the reasons that ADR is up. Specific to your question, cancellation rates in aggregate are up 200 to 300 basis points from a year ago. And this is -- if you think about the novel levels a year ago, our cancellation for order of magnitude about 16%, they're now about 19%, which we think is very healthy in the travel phase.

The final comment I will make, and I'm sure we'll get questions on it later, is effect of NPL in Q4. I just want to remind everyone that we had called out last quarter that Q3 would be the peak in terms of net impact of our IPO on our numbers. that's because we get the growth benefit in terms of the list of bookings before we see the full cancellations. And so the net impact to Nights booked will come down sequentially in Q4.

Operator

Your next question comes from the line of Justin Post from Bank of America.

Justin Post

Maybe one for Brian and a quick one for Ellie. Can you remind us what percent of your inventory is really proprietary for Airbnb? And how have you thought about using that as an asset, maybe with agent negotiations? How do you really take advantage of that. And then Ellie, just quick on the insurance. Can you give us anything on what the penetration is of bookings? Or how much is contributing to take rates?

Brian Chesky

Yes. Over 60% of our inventory, we believe, [indiscernible] Airbnb. And so that's the first part of the question. What's the other part of your question? It's the -- penetration of insurance products?

Ellie Mertz

Yes. Insurance products are growing quite nicely. It's a single-digit percent of bookings that have an attached that is up materially from a year ago. I think what excited on our insurance products is not only the growth, but also the opportunity to provide more insurance products. We're looking across a host of offerings that we could provide both guests and hosts and I should note that the margins are great on the attached insurance product.

Brian Chesky

Sorry, Justin, you said how does that factor into agent negotiations, exclusive inventory. Can you elaborate on that?

Justin Post

Yes. How are you thinking about that as an asset, either for your own internal agents or maybe in negotiations with external agents getting good financial terms? Or any strategic advantages there? Yes. .

Brian Chesky

I'm not sure yet. I mean I think it's really -- I think as far as speculating what the relationship is between unique inventory and like potentially leverage, negotiating with like other partners. I think it's really early, I don't know. But let me just tell you my philosophy on unique inventory. I don't pay a lot of attention looking at what percent of our inventory is unique anymore. It's helpful, the more unique to better. There's no question. .

The most important thing is as we go into categories, we are -- our philosophy is it's okay to have commodities, like hotels. It's okay to have some cross list at home. -- as long as there are a lot of unique things that you can't get anywhere else. And I think the percentage is not as important. It's the absolute amount, right? So like if -- imagine there are 2 stores, they all have the same products except 1 store has a bunch of other stuff that other store doesn't have.

The percentage of unique stuff in the store doesn't matter just how many things, the items are unique in that store, the other store didn't have. And so as a theoretical mental model, Imagine there's 2 stores and 1 they have almost all the same inventory, but 1 has just some more unique stuff. If you have 10% more up, you might get more than 10% more traffic because suddenly, it's a major difference. So we don't really look at the percent mix. I mean it's good to know.

Of course, we track it, but we are growing really, really quickly. by process of inventory and getting that really competitive nice. And actually, 1 of the things noted where now pay later, is this helped us become way more competitive like getting those nights. And then the hostile fee has been really competitive with us keeping more competitive prices. And so why I say this is just to finish off this point.

With services, a bunch of our inventory is commodity inventory, like car rents. You can get those cars elsewhere. But then we have a bunch of inventory you can't find anywhere else, like misuse, chefs and photographers. As experiences, we're now offering ticket. You can get about those tickets on their website, but we also have exclusive experiences. So kind of category by category, we'll get a bunch of the commodities. We always want to make sure that we have a unique stuff. And we have unique plus commodities, then we become the one-stop shop. You don't need to go or in or out.

Operator

Your next question comes from the line of Benjamin Black from Deutsche Bank.

Benjamin Black

Great. So Brian, it seems that you're increasingly adding social and travel discovery elements through connections, through Travelmat through neighborhood pages even personalized recommendations. So how do these features change the role you guys play before guests is actually those destination or before they're ready to book. And could greater discovery eventually lead discovery element eventually lead to sort of a more natural opportunity for sponsored listings? And then secondly, as you add hotels, you expand a number of experiences, you add services, how does that change your thinking around loyalty more bodily .

Brian Chesky

Two good questions. So social and travel discovery, let me just like before I answer the question, let me back up. So I remember like 22 years ago when Facebook first came out, it came out in 2004. I couldn't use it right away because I just missed it. I just graduated from college right before Facebook launched in my college, I had to wait 2 years before they open up to everyone. So I remember Facebook would used to be a social network. And with basically your friends and you can keep in touch with people and you can message them and see who they were doing. And that was around 2004 to 2006, 2007, 2008, let's call that the golden age of social networking.

And at some point, social networking morphed into social media. And our friends became our followers, and we stopped connecting and we started performing. And a very bizarre phenomenon happened where the social network in a sense was invented in kind of for a large part of the world, uninvented, like I no longer have a social graph. I no longer know whose birthdays, my friends are unless they're close friends. I no longer know when somebody -- like something happens in someone's life, I no longer know how to keep a touch with people, except I got to message them and with that for my messaging platform.

So there really aren't social grafts anymore. I mean, LinkedIn is kind of a resamegraph, but really, there's no social grafts anymore. And we thought what if we brought back the social graph, but instead of being an online social graph, -- it was a social graph in the real world of the deep you travel with and the people who meet along the way of your travels. And we thought this could be really interesting.

So we started building these social travel features this year. We launched them in May. We launched a travel map -- and we started realizing this might be the beginning of something massive. And we are going to be launching a lot more social features and social connected features next year. I think this is maybe one of the single most underestimated parts of our business.

I mean, it might be because we don't talk about them much, but that's okay. I don't want to give away too much of the road map, but I can just say a couple of things. Number one, it's a great proxy for trust. If I were a host, and I were to get a reservation for somebody, I don't know them, but I can see how they're connected to me, how many degrees away, that would be a really good proxy for trust. And as you build this social graph, you increase that as you can trust you potentially go into a lot of the businesses. I'll let your imagination run wild what's possible.

You can also see where your friends have traveled and stayed. So you can see like my friends at Paris, now I can message them and ask what's going to do in Paris. I can eventually -- we can eventually bring that into search results. Right now, that's on the profile have, but we eventually are going to bring that into searches. So when you see the map, you'll be able to see where your friends have travel in search results in map. You'll be able to see listening to friends of stage. You'll be able to see who's been traveling there recently and where they're going. So there's going to be a lot of these features.

These features are going to, a, make things more sticky, b, it's going to make group travel much more collaborative. -- see, it's going to make it much easier to get great recommendations that's going to increase trust in the platform. And the other thing I'll just say the last thing is, I've been doing -- I occasionally do these roundtables and with customers.

And I recently did a Gen Z roundtable, basically kids that are like college age. And they were kind of like a little younger than the age I was when I started Airbnb. And I heard 2 things from Gen Z. And again, I'd just Gen Z is like the fastest-growing segment, and it's the prime advertising segment. They basically 2 things. One, they want to save money. Young people always want to save money. -- but in age of rising cost of living with a lot of college debt with tuition going up, and the latter being pulled up a little bit with AI, a lot of entry-level jobs are harder to come by because AI can do them more than ever, they're looking for affordability.

But even more so, we're hearing a lot of college and recent granting they want to meet people. And a lot of people, they meet people at work in school, search, Boeing alleys. Well, a lot of these things aren't around as much anymore. And a lot of kids if they don't have a job, they're not going to be some of the work. So we're starting to see that a lot of these social features are going to be especially popular with Gen Z.

But surprisingly, we're also seeing like on the other barbell empty nester, Kids are out of the house. They want to travel. They want to meet people. So there's a lot of opportunities here with the social features. With regards to sponsor listing, the relationship between them, I don't know. I think the thing I'll say about sponsor listings in particular is we are developing our AI agent, and we wanted -- we are developing sponsor listings, but they'll be developed in the context of the AI agent. So we first need to launch the agent.

We need to refine it, and then we figure out how ads work in that new world. By the way, everyone's figuring is out at stinging this out. So I don't think it's a clear -- it's not clear what the implementation is -- but I think if anyone can figure out, I think our design team side. With regards to a loyalty program, I mean, I don't -- again, I want to not break any news, but we are absolutely looking at a loyalty program.

We've been looking at it for a long time. I think I've said for a long time, the best loyalty program is plus customers loving your product. Disney and Apple for years. lap doesn't have a loyalty program. People love their products. But at the same time, we're like the only travel major traveler in the world that doesn't have one.

And I think we have been at a disadvantage because we don't have a loyalty program. A lot of people want to use the say, "I want to use you, but you don't have a program. So I almost feel like I can't use you." -- so we are absolutely looking at a loyalty program. I don't have anything announced, but I can say that as we add more verticals -- we just have a lot more to work with. So adding verticals make loyalty program more compelling.

Operator

Your next question comes from the line of Jed Kelly from Oppenheimer.

Jed Kelly

Just looking at the guidance, it looks like your EBITDA margins are going to be in that 36% range, so above 35%. But if I look at your growth, you're growing 12%. I think, Ryan, knowing you, you like faster growth. So can you just talk about how we should think about threading the needle between double-digit room night growth and maintaining margins above 35%, 36%?

Ellie Mertz

Jenny, are you talking about Q4 or '27, what's the reference?.

Jed Kelly

Just balancing profit versus growth given that you're seeing accelerating growth and what your preference is?

Ellie Mertz

I mean I think Brian and I have been very clear over the last 2 years that we have very been prioritizing growth focused on driving growth in this business. And I think the results in the last couple of quarters show that we have been able to deliver that growth. behind that, we continue to invest in growth. But at the same time, in the last couple of years, what you've seen is that we've been capable of reinvesting upside in order to continue the momentum. .

We're obviously in the '27 planning right now. And the prioritization around continuing this momentum continues to be the top priority -- the good news is that this business is extremely profitable, has incredible cash flow dynamics that give us a lot of room to invest within a very strong profitability envelope.

Operator

Your next question comes from the line of Matthew Cost from Morgan Stanley.

Matthew Cost

I guess, firstly, on the hotels and the people that are using the hotel product, -- are they generally new to Airbnb and bringing in incremental bookings? Are they a high-end or low-end consumer? How are they retaining? I guess, tell us a little bit more about the behavior of those people that are booking hotels -- and then secondly, Brian, I was wondering if you could just respond to some of the data that's out there about early adoption of these agents that's showing agents like news and instinct that's showing that a lot of commercial activity happening there is travel related. Is that something you think strengthen the mix over time? Or how does that gel with your overall view of how people will use these horizontal tools?

Brian Chesky

Maybe I'll start with the second one and just to mind then Ellie you can go to the first one. So we're not seeing a lot of traffic in even fewer bookings from us and instinct, yet, we do have nearly 0.5 million bookings a day and a very nonmaterial number of bookings happen I'm using instinct. So we're talking very low numbers. So we're not seeing a lot of traffic today and it's not really increased over the last 4 weeks.

So it kind of peaked in early October. It's kind of been stable in the last 4 weeks. So we're kind of watching it. My general philosophy on agents are -- I'm generally excited about them. I don't see them as a threat. I see them kind of like Google as an opportunity for more people to discover Airbnb. So I think they'll be great handoff to us. There will be people that will want to book a one-off flight or something directly on an agent.

So I'm not saying that will never happen. But travel is -- maybe this is like just a framework to think about. There's item-based retail some project-based retailers. So just as an analogy, -- you go to Walgreens. You don't go -- you don't like plan to go to Walgreens. You need to get something to go to Walgreens. You go to IKEA or Home Depot, that's a project-based retailer, right? You have a whole project. You don't go to those places to get on it.

Airbnb we're really long term, we want to be in the midst of the entire trip. That's entire project. It involves where stay, what to do, how to get there all in place. It's highly logistical. Our guests typically travel in groups of 3 or more. 90% of people message the host. The host wants to know who's in their home, so they want to have a connection. They don't want to offload to an agent. If I'm hosting somebody, I want to talk to the person, not the agent on behalf of the person -- it's very visual.

People typically look at multiple -- dozen listings or more. They look at 25 photos per listing often. So it's very visual. It's very collaborative. It's a very complicated experience. And the other thing I mentioned this in my opening remarks, is there's a lot of studies that show people enjoy anticipating travel more than actually traveling. Here's a fun fact.

Most of our traffic happens during 9 to 5 hours. These people are supposed to be working. And they're not. We have evidence. People are actually secretly using Airbnb. Maybe they're trying to skip their job. But the idea is that it's highly aspirational. So I don't think a lot of people want to offload all that to an agent. I think they want to offer the things they don't enjoy not the things they do enjoy. So it's small.

We're watching it, but we are definitely open to working with these agents. But I also just think they'll be really helpful handoffs to us. But I think that to do -- I'm not saying agents can't do travel, I don't get to focus on travel, and that's what we're going to do. We're going to focus on travel. And any want to focus on travel can probably solve it, but a general agent trying to solve travel and solve 50 other things. That's really hard.

Ellie Mertz

To have some questions, I'll be quick, and then we're going on time. In terms of the mix of nevers versus past bookers, it's actually very consistent with our overall platform. We're seeing great demand on both segments. And -- and just to underscore why like that is in with our strategy. We're eager to get more travel share from our past guests and hotel spoken up new use cases that even our most loyal guests may be choosing hotels of the platform. .

Similarly on the first-time booker front hotels part of the trend. -- to onboard those guests that haven't yet tried for a home by operating them something they are familiar with, and we're seeing that as well. So great hotel demand on both sides of the marketplace.

Operator

And we have reached the end of our question-and-answer period. I will now turn the call back over to Brian Chesky for some final closing remarks.

Brian Chesky

All right. Well, thank you, everyone, for joining. I just want to end where I started. Airbnb is back in growth mode and it's here to stay. This is a result of years of hard work to make every better. And as we build by to become an AI native company, I actually think the opportunity ahead of us is actually even bigger. I want to end most importantly, by thanking our incredible team. I get to I get -- we get to take the credit when we have good calls, but it's only because of the great work of the people.

And I think one of the superpowers of Airbnb, maybe the Super Power, this is old cliche, it's all about the people. But it really is, especially in Silicon Valley and tech because you're only as good as your most recent innovations, and that's only as good as our team. Our team tirelessly. -- they've been really, really burning the many oil a lot of times this year.

And so I'm asked why are we growing so fast. I often say things like execution. Well, execution only happens from people teams. And I think that what these results really are beyond AI, beyond all these products, is this is a team that's really starting to get into flow. They're doing great. So thank you all, team Airbnb. And thank you all for dialing in today. We are just getting started back in growth mode. Thank you.

Operator

This concludes today's conference call. Thank you for your participation. You may now disconnect.