Travel Tech Cools Off
Personally, I am not a fan of the company Airbnb (ABNB).
It’s one of those platforms that doesn’t have a product, but lists other people’s homes and gets a pay cut from it.
That’s the issue.
There is no real proprietary code that is going to get them to the winner’s circle.
No AI force multiplier will make them into a $5 trillion company.
A differently branded platform like Facebook could easily steal their business, and nobody would bat an eye.
The lack of a competitive moat really kills them long term, so the only trick up their sleeve is increasing commission and other little tricks and gimmicks.
A few years back, ABNB only charged in the single digits for their service, but now their cut is 14.3% of gross bookings.
This is alienating owners who perceive this as overkill.
ABNB customer service is also historically terrible and in free-fall after they used the 2020 pandemic to lay off most of their San Francisco office.
Many Silicon Valley overlords never waste a crisis to get more for themselves.
Now they rely on a hodgepodge approach that basically gets customers with no solution and protects profits.
A “customer last” company often fails in technology.
These are just some of the reasons why the stock is down 11.5% in the past 5 years.
The bad news for ABNB is that the 11.5% drop was in mostly good times, except 2020, and in the medium term, prospects are darkening.
Simply put, the company is dealing with recent financial signals decelerating growth amid macroeconomic headwinds.
It doesn’t deserve any sort of premium valuation, which leaves little margin for error.
More critically, gross travel bookings—a core metric reflecting total payments processed on the platform—are showing signs of moderation and regional softness, driven by economic uncertainty, regulatory pressures, and shifting consumer behaviors.
In a high-interest-rate environment, where the Fed’s rates remain elevated into late 2025, growth stocks like ABNB face compression.
Airbnb’s business model, reliant on decentralized short-term rentals, is increasingly vulnerable to regulatory crackdowns. Cities like New York, Barcelona, and parts of California have imposed strict limits on listings, reducing supply by up to 80% in some areas.
These restrictions erode host confidence, prompting a wave of properties shifting to long-term rentals.
Globally, oversaturation has flooded markets: U.S. short-term rental supply rose 8.9% year-over-year to January 2025, outpacing demand growth in 31 of the top 50 markets.
Airbnb’s dominance (44% share) is eroding as rivals invest in user experience and localized marketing.
Tariffs under the federal administration and the general high cost of living are squeezing household budgets, along with killing spending sentiment.
North America (46.77% of revenue) saw “softness” in urban areas, boding negatively for the rest of 2025.
When ABNB’s best market coughs, the rest of the world catches a cold.
There has been a lot of bad rhetoric in the way ABNB does business in the United States.
The company has deserted its “live like a local” theme and morphed into a more ruthless commission extraction machine.
I haven’t even mentioned the $250 cleaning fees, which should not even be allowed.
As customers and hosts continue to suffer from poor experiences, and regulatory and inflation concerns spiral out of control, it is hard to see a hockey stick-like growth trajectory in this company with no competitive moat.
ABNB shares are too expensive for what it is, and investors should balk at paying for shares unless they drop deep into the 2 digits – something like $80 per share would probably be a fair price for these shares.
