Airbnb (Nasdaq: ABNB) stock plummeted as much as 6% on Thursday after a short study suggested that, among other issues, the company’s top hosts have began competing directly with Airbnb on new platforms.
In a report by The Bear Cave, amid countless scandals and horror stories, the Airbnb platform has switched towards professionally managed apartments, many of which are now preparing to compete directly with the company.
“Airbnb’s top professional hosts are building out their own booking platforms and offering cheaper deals to cut out Airbnb, growing their own email lists and distribution, and offering loyalty discounts to book off of Airbnb,” wrote Edwin Dorsey, publisher of The Bear Cave newsletter.
During the epidemic, the San Francisco-based company experienced a boom in income and reservations. But, in response to concerns about excessive prices and onerous host standards, CEO Brian Chesky announced policy modifications last year.
Moves that have shifted the platform’s power balance toward larger, professional hosts. In Dorsey’s opinion, hosts who are also working to undercut Airbnb’s platform.
Dorsey contends that the Airbnb community has transitioned toward professionally managed homes that offer considerable advantages over individual hosts, such as higher search ranks with “superhost” designation, better images and copywriting, and a dependable check-in process.
Citing an April 2022 blog post from AirDNA, a vacation rental data company, Dorsey wrote that “professional property managers represent 1% of all vacation rental hosts, but manage 23% of available listings which generate 35% of total revenue.”
Dorsey highlights efforts by vacation rental businesses such as Stay Heirloom, Empty Spaces, and The Natchez to induce tourists to bypass Airbnb in their own booking process.
“Owning the customer relationship allows professional hosts to avoid Airbnb’s ~17% platform fee, control any refund/dispute process, communicate directly and seamlessly with customers, market aggressively for repeat business, and not be at the whims of Airbnb’s algorithm,” Dorsey said.
Airbnb’s stock is down approximately 32% in the last year, but up roughly 31% this year.
Just in March, the company announced laying off about 30% of its recruiting staff, which follows a 25% reduction in staff in the early days of the pandemic. While the fresh job cuts are expected to affect some 30 jobs of the company’s total workforce of about 6,800 workers, this contrasts what Chesky was promising in the latest company earnings call.
“We have a general philosophy that we want the very best people in every field to come to Airbnb in every function. We’re functionally organized. And I think that, you know, we’re one of the few tech companies that isn’t doing layoffs. We’re not cutting. We’re not freezing. We’re actually stepping on the gas,” Cheeky said.
Airbnb’s CFO even went on to say that he was actually expecting headcount to grow this year between 2% and 4%.
Back in June, Airbnb also cut parties and events in its listings globally, making the ban that was initially introduced as a temporary measure in August 2020 at the height of the COVID-19 pandemic a permanent part of its policy.
Airbnb last traded at $109.69 on the Nasdaq.
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