airbnb (photo from the facebook page of airbnb)
Shares of the collaborative travel company Airbnb fell in trading tonight following a report by Edwin Dorsey, who covered problems at the company on his blog.
Airbnb shares are down 4.9% year to date, after falling as much as 6.7% immediately after the report was released earlier this week.
Dorsey’s main argument against Airbnb seems to be that the company’s host base is becoming “professionalized,” with those professional hosts launching their own independent websites, competing with Airbnb and taking both customers and hosts away from it.
The “Bear’s Cave” author also notes that the company’s brand image is increasingly negative on social media, and that the company is plagued by horror stories about lost vacations, including the death of a 19-month-old boy who died after accidentally ingesting fentanyl in an Airbnb apartment that was being used as a party house.
The blog post also says Airbnb’s host community has shifted to professionally managed properties, citing an AirDNA report that says 35% of Airbnb and VRBO’s revenue comes from professional hosts, even though they make up just 1% of all hosts.
More in-
That said, Dorsey makes some good points, but most of what he says isn’t new and a lot of it isn’t really problematic for Airbnb. For example, it’s not unusual for professional Airbnb hosts to also aspire to build their own direct businesses. Vacasa, the publicly traded vacation rental company, advertises properties both on its website and on marketplaces like Airbnb. For these companies, Airbnb is a customer acquisition channel, just not the only one they use.
This dynamic is common in other industries as well. Lots of Shopify sellers, for example, also sell on Amazon because they’re looking for sales in every channel they can get them. Professional hosts are not going to take a cut from Airbnb as long as it remains a valuable income stream for them.
Airbnb has a lot of room for improvement, and the company needs to take seriously complaints about host cleaning fees and to-do lists. But its latest result should also reassure investors that the travel stock is still on the right track — revenue growth remains strong and its margins continue to improve.
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