(Reuters) - On Wednesday, Airbnb projected fourth-quarter revenue slightly below Wall Street estimates due to a slowdown in travel demand caused by increasing costs, uncertain economic conditions, and geopolitical turbulence. As a result, the San Francisco-based company's shares experienced a 4.9% decline to $114.30 in extended trading.

Airbnb acknowledged the greater volatility early in Q4 and emphasized the close monitoring of macroeconomic trends and geopolitical conflicts that could impact travel demand. According to LSEG data, the company's forecasted fourth-quarter revenue is anticipated to range from $2.13 billion to $2.17 billion, falling below the average analysts' estimate of $2.18 billion.

Furthermore, Airbnb predicts a moderation in bookings growth for the fourth quarter compared to the third quarter, which witnessed a surge in international travel demand and a rebound in travel to cities during the summer months. The company's primary revenue source lies outside the United States.

In the third quarter, Airbnb reported a 3% increase in the average daily rate (ADR) to $161 compared to the previous year. However, ADR in North America experienced a second consecutive decline, falling by 1% during the same period.

Airbnb's growth in the Asia Pacific region was notable, with a 27% increase in booked Nights and Experiences year-over-year. This growth was supported by cross-border recovery, particularly in outbound travel from China, which more than doubled during the same period. The company also highlighted that its Asia Pacific business fully recovered to pre-pandemic levels in the quarter.

Latin America was identified as the fastest-growing region during the quarter compared to pre-pandemic periods, with a nearly doubled number of Nights and Experiences booked.

Airbnb's third-quarter revenue demonstrated an 18% rise to $3.4 billion from the previous year. Gross bookings also increased, reaching $18.3 billion.

Excluding a one-time income tax benefit, Airbnb reported adjusted earnings per share of $2.43. This surpassed the average analyst estimate of $2.10 per share, according to LSEG data.

Overall, while the company's third-quarter performance surpassed expectations, the forecasted fourth-quarter revenue indicates potential headwinds for Airbnb, as travel demand experiences a slowdown amidst rising costs and global uncertainty.

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