Airbnb's Troubling Trends: A Deep Dive

November 1, 2023

When sifting through tweets and headlines about Airbnb, one often encounters horror stories.

These range from women finding a bat-infested castle house in Michigan to travelers driving cross-country, only to have their reservations cancelled, leaving them stranded and financially burdened. Heck, Hollywood even produced a movie inspired by such incidents.

As an Airbnb user, I've noticed two key things:

1) Airbnb's pricing can be significantly higher than direct bookings — a personal comparison for a 3-night stay revealed a $600 difference.

2) This markup, once widely recognized by users and property managers, could lead to a loss in sales for Airbnb. My own booking decision (hint: not through Airbnb) reflects this sentiment.

However, these stories and my experience aren't just isolated incidents but indicators of a deeper issue with Airbnb's business model, as evidenced by LikeFolio data.

Web visits have plummeted to their lowest since October 2022, showing a 5% year-over-year decline after a lackluster summer, and are significantly lower compared to traditional lodging options.

More troubling for a long-term perspective, Airbnb lags behind these traditional competitors in customer happiness levels.

It’s not even close.

Despite reporting an 18% increase in year-over-year revenue to $2.48 billion in its Q2 earnings, surpassing expectations, Airbnb saw a slowdown in nights and experiences booked, growing by almost 11% but not meeting the anticipated 117.6 million. Nevertheless, net income increased notably to $650 million. The company also launched "Rooms" to offer more affordable rentals and improve growth and customer service, partially utilizing AI technologies like OpenAI's GPT-4.

Bottom Line

This booking slowdown, coupled with legislative challenges in various cities (NYC, for instance), is worrisome for Airbnb's long-term prospects.

Although the company has compensated for some weaknesses with higher prices, the strategy appears to be alienating customers.

The combination of low happiness levels and a sharp decline in web traffic are major concerns.

We're bearish on this trend and don't see any stock price drops as buying opportunities. For long-term investments in consumer travel, other options seem more promising.

Want deeper insights? Get Free Access to The Vault.

Tags: 

Related Posts

Airbnb is still outperforming its traditional hospitality peers

Airbnb (ABNB) AirbnB is set to report earnings for the […]

Read More
AirBnB (ABNB) Showing a Strong Spring Break

AirBnB (ABNB) Showing a Strong Spring Break AirBnB (ABNB) IPO’d […]

Read More
Hotels are Making a Comeback: $HLT $H $MAR $ABNB

Hotels are Making a Comeback: $HLT $H $MAR $ABNB ABNB […]

Read More
1 2 3 5

Related Posts

Related Reports

About LikeFolio

LikeFolio analyzes social media data to accurately predict shifts in consumer behavior. We sell data and insights to professional investors, corporate research teams, and software providers.
© 2024
 LikeFolio. All Rights Reserved.
LikeFolio