Airbnb shares fall 14% as US demand harms performance

Airbnb saw its shares drop 14% in after hours trading on Wednesday after seeing its Q2 profits drop to $555m (£437.14m)), down from $650m (£511.9m) the year prior. 

It comes as it warned of weakening demand from US consumers in terms of domestic travel as they reign back travel spending due to economic uncertainty.

The fall in profit comes despite a 11% rise in revenues to £2.75bn (£2.17bn), primarily driven by solid growth in Nights and Experiences Booked and a modest increase in Average Daily Rate (“ADR”).

However, looking ahead to Q3 2024, the group said it expects to deliver revenue of $3.67bn (£2.89bn) to $3.73bn (£2.94bn), below analysts’ previous estimates of $3.84bn (£3.02bn).

The Group also announced that since it launched its updated hosting quality system in April 2023, it removed over 200,000 listings that failed to meet its guests’ expectations to ensure it “consistently delivers high-quality stays”.

Looking ahead, Airbnb said: “We continue to drive growth by investing in under-penetrated markets. We’re leveraging our global expansion playbook, which includes a more localised product and marketing approach, and will continue investing in less mature markets throughout 2024 and beyond. 

“We’re also expanding Airbnb’s brand positioning beyond travel accommodations with the global roll out of Airbnb Icons, a new category of extraordinary experiences that we launched in May. This will be critical as we expand our offerings in the coming years.”