Airbnb reported a record $1.21 billion profit for the third quarter as bookings and average daily rates increased, and the company said Tuesday that demand for short-term rentals remains strong despite uncertainty over the economy.

The profit was still less than Wall Street expected, however, and the company said bookings growth will slow in the fourth quarter, while average daily rates will also be pressured.

Airbnb shares fell 4% in extended trading.

The third-quarter profit, which compared with $834 million in the same quarter last year, amounted to $1.22 per share. Analysts expected $1.47 per share, according to a survey by FactSet.

Revenue surged 29% from a year earlier, to $2.88 billion, slightly higher than analysts' forecast of $2.85 billion.

Airbnb shares have dropped nearly one-third this year despite the recovery in travel, a highly profitable first half of the year, and relentlessly upbeat commentary from CEO Brian Chesky and other company leaders.

Most of the share-price decline has occurred since early May. Investors worry that higher prices for basics including housing, food and gas — plus fear of recession — will cause consumers to cut back on discretionary spending like travel.