Screenshot of a video posted on social media by Jamaican actress and filmmaker Donisha Prendergast, granddaughter of Bob Marley, in May 2018, showing California police arresting her as she and three friends left an AirBnB home. Twitter
Short-term home rental marketplace Airbnb claims to have had its most profitable second quarter ever in 2022, but overall airline and lodging bookings showed some deceleration in September, setting off a debate on Twitter as to whether Airbnb is done.
According to credit and debit card information from Bank of America, recent trends suggest that airline bookings are still solid but have plateaued since the spring with a slight slowdown in early October bookings, due in part to Hurricane Ian, Seeking Alpha reported.
“Backing up the BofA data, Sensor Tower travel app September data tracked app download growth decelerated for Airbnb and Booking Holdings (BKNG), but was higher for Expedia (EXPE). Meanwhile, AirDNA data indicated that Airbnb active listings in September were 6.2M and growth accelerated to +16% Y/Y vs. +14% in August.”
“Airbnb has become one of the more profitable companies on the stock market,” Jeremy Bowman wrote for The Motley Fool.
Airbnb has been increasingly called out for being a monopoly with hosts getting away with gouging customers. The platform has “a complete lack of quality control or oversight,” making a stay there akin to “a game of roulette,” Sam Kemmis wrote for Nerdwallet. (Kemmis has spent much of his life ranking airlines and hotels.)
Unlike hotels, where competition is fierce, Airbnb “has little incentive to improve the experience for customers. Year after year, this lack of a competitive has dulled Airbnb’s edge,” Kemmis wrote.
Twitter users on Airbnb Superhosts have questions. “What’s going on with airbnb. No bookings at all,” a user tweeted on Sept. 8.
Another wrote, “Has anyone seen a huge decrease in bookings over the last 3 to 4 months? We went from at least 50% occupancy to literally 0% the last two months. I’m just curious if this is something only going on with my property or if other people are seeing similar things. I am in Palm Springs. Where are you located?
Dare Obasanjo, a program manager at Microsoft and son of the former President of Nigeria, commented, “It’s impressive that AirBnB survived COVID only to be killed by the greed of hosts and the company’s complicity in price gouging customers.”
In an Aug. 2 earnings statement, Airbnb claims its second-quarter net income of $379 million was its most profitable second quarter. Net income improved by $676 million compared to Q2 2019. “In Q2 2022, we delivered a net profit margin of 18%, up from (5)% in Q2 2021 and (25)% in 2019, and $1.2 billion of net income in the last twelve months,” the company reported.
Airbnb’s Q2 revenue of $2.1 billion grew 58 percent year over year, exceeding Q2 2019 revenue before the pandemic by 73 percent.
Some Airbnb customers have complained about what they say are excessive rules and fees sometimes totaling more than the nightly rate of the rental itself. Airbnb said that hosts set nightly rates and cleaning fees, while the company typically charged a service fee of about 14 percent, and that local governments often charged taxes (similar to hotels).
Some Twitter users questioned the logic of Obasanjo and other Airbnb critics’ arguments. “I was wondering if Amazon’s sales would be down by a third based on fall in volumes of one Seller,” Ketharaman Swaminathan wrote. “I won’t rush to predict the death of AirBnB based on reduced bookings of one Host.”
Erik Dungan tweeted, “Allowing hosts to set pricing as they see fit isn’t ‘complicity in price gouging’. That’s how marketplaces work … Hosts don’t have a monopoly so if prices are too high they’ll probably book less due to decreased demand. Again, how markets work.”
Stefan von Imhof tweeted, “Is there a lick of evidence that suggests Airbnb is even suffering, let alone getting killed by host greed? I dislike fee gouging as much as the next person, but c’mon, this is an anecdote. Here’s another: My bookings are better than ever.”
The pandemic led to skyrocketing home prices in suburban areas. However, there’s another factor. Investors turning homes into short-term rentals are constraining the supply of long-term rentals and contributing to the affordable housing shortage, Federal Reserve Bank of Philadelphia President and CEO Patrick Harker wrote in a recent essay.
Image: Screenshot of a video posted on social media by Jamaican actress and filmmaker Donisha Prendergast, granddaughter of Bob Marley, in May 2018, showing California police arresting her as she and three friends left an AirBnB home. (Twitter)
