The Bearish Outlook for Airbnb — and Why It’s Wrong: Analyst

In the midst of concerns about Airbnb’s slowed room night growth, Bernstein Research offers a different take, emphasizing a unique measure—customer growth—over traditional metrics. Here’s why the bearish outlook might be missing the mark:

Bearish Concerns:

1. Room Night Growth Lag:
Airbnb’s room nights increased by a modest 8% annually since 2019, a growth rate below expectations. Critics argue that the company relied on 9% annual price hikes for revenue growth, deviating from its pre-Covid volume-centric strategy.

2. Pricing vs. Volume:
Before Covid, Airbnb focused on volume growth rather than higher prices. The consensus predicts optimistic volume growth estimates (12%), while skeptics believe prices will correct more than expected, eroding Airbnb’s competitive edge.

3. Booking.com‘s Room Night Surge:
Booking.com, offering both hotels and short-term rentals, narrowed the room night growth gap with Airbnb, growing at 5.6% compared to Airbnb’s 8.2% CAGR in the 2019-2023 period.

Optimistic Outlook:

1. Global Lodging Industry Outperformance:
Airbnb outshines the global lodging industry, boasting 8.7% annual room growth from 2019 to 2023, while the industry faced a 2% decline.

2. Pricing as a Growth Catalyst:
Airbnb’s pricing growth, although criticized for impeding room night growth, contributed to a 17% CAGR increase in gross bookings from 2019 to 2023, surpassing the global lodging market by 14%.

3. Evolution of Airbnb:
Airbnb’s transformation since 2019 includes larger properties, particularly multi-bedroom listings. Analyzing on a per-customer basis, Airbnb shows a remarkable 10.4% volume growth, surpassing peers.

4. Customer Base Expansion:
Airbnb expanded its customer base by 10.4% annually, surpassing Booking.com and Expedia, which combined grew customers by only about 3%.

Bernstein concludes that Airbnb, with its evolving strategies and adaptability, will continue to outperform the wider lodging market. For a deeper dive into the research, explore the full article here and embrace a more optimistic view of Airbnb’s future. 🏡✨

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