Americans aren't booking as many Airbnbs - and the short-term rental company is feeling the pinch. Airbnb reported a 14 percent drop in after-hours trading on Wednesday after the company issued a report saying it had missed its analysts’ expectations due in part to slowing demand from US customers. The company cautioned on Wednesday that it was "seeing shorter booking lead times globally and some signs of slowing demand from US guests," according to a report by CNBC.
"We're watching these trends closely, along with the impact any macroeconomic pressures might be causing," Airbnb CEO Brian Chesky said. "Lead time" refers to the number of days between a reservation date and the actual arrival date, suggesting more trips are being booked last minute rather than planned out weeks or months in advance. The company anticipates a third-quarter revenue of $3.
67bn to $3.73bn, which falls below analysts' forecast of $3.84bn.
Airbnb did not provide any insight into why fewer Americans might be booking stays on the platform but rising costs caused by inflation certainly aren't helping. In May, a survey found that nearly 80 percent of Americans even considered fast food a "luxury" purchase due to the rising cost of menu items. On top of tightening wallets, Airbnb has also faced pushback in some parts of the country.
In April, the Los Angeles Board of Supervisors voted unanimously to approve an ordinance that restricts the short-term rental market in the unincorporated LA County, according to the Boyle Heights Beat . “The proliferation of unregulated short-term rentals has the potential to erode available housing stock, degrade community and residential character,” the LA County Counsel wrote in an analysis at the time. New York City also took steps to reel in the number of short-term rentals last year when it enacted Local Law 18, which requires all short-term rental hosts to register with the city government.
Airbnb called the regulation a soft ban on its business, but critics pointed to data suggesting the company’s short-term rentals were driving up rents in the city. According to a 2019 study by the Economic Policy Institute , the company's introduction and expansion in New York drove up average rents in the city by nearly $400 annually. The company sued the city twice in an effort to undermine the legislation.
Pushback continued this year. In May, residents in a Long Beach, California, neighborhood successfully pushed for a ban on the short-term rentals, citing noise from renters. In April, lawmakers in Hawaii moved to rein in the industry after residents complained they were being squeezed out of their homes by the growing number of short-term vacation rentals, especially as housing became scarce after the devastating Maui wildfires.
Wednesday's announcement wasn't all bad news for Airbnb. The company said users had booked 125.1 million “Nights and Experiences”, accounting for its highest second-quarter result.
Airbnb Experiences are events like tours, sightseeing excursions, restaurant and bar visits or stays in special locations, like the Ferrari Museum, booked through the platform. The company also announced it had removed more than 200,000 low-quality rental listings thanks to a "quality system" it launched more than a year ago..
