This week0 Airbnb gave a third-quarter revenue prediction that was higher than market expectations, but industry concerns about a slowing domestic market caused Airbnb’s shares to decline 1.2% in after-hours trade.

According to Refinitiv statistics, the San Francisco-based company projected quarterly revenue between $3.3 billion and $3.4 billion, exceeding analysts’ average expectation of $3.22 billion.

The company anticipates benefiting from an uptick in domestic and international travel, but businesses with major U.S. exposure are seeing a decline in domestic revenue as more people choose to travel abroad.

Airbnb, which derives the majority of its income from outside the United States, reported that international bookings increased 16% year over year in the second quarter and that more travellers were visiting cities, as seen by an increase of 13% in the number of urban nights booked.

“We continue to see signs of travelers returning to cities, historically one of the strongest areas of our business,” the company said.

However, despite the company’s claims that it was trying to reduce price increases for consumers, its average daily rate (ADR) increased globally by barely 1% to $166. In North America, daily rates fell 1%.

According to researchers, demand for domestic hotels in the United States has stagnated as travel restrictions loosen and a strong currency encourages people to book flights and accommodations abroad.

However, the prominently located short-term rental company Airbnb reported that from the first to the second quarters in North America, it observed an increase in the overall growth of nights booked.

“I think that was telling, just the strength and resiliency of the North American consumer and we’re continuing to see that strength lead into Q3,” said Airbnb CFO David Stephenson on a call with investors.

Revenue for Airbnb increased 18.1% in the second quarter to $2.48 billion, exceeding analyst expectations of $2.42 billion.

As anticipated, gross bookings increased 13% to $19.1 billion.

In contrast to expectations of 78 cents, the short-term rental company posted a profit of 98 cents per share.

The shares of online travel firm Booking Holdings (BKNG.O) increased by 10.25% in extended trading after the business increased its yearly projection in order to capitalise on the increase in demand for travel to Europe.

(Adapted from Nasdaq.com)