Airbnb first saw the light 17 years ago during August 2008 in San Francisco, California. Air Bed and Breakfast as it was originally named, operates an online marketplace for long-and-short term homestays, services and experiences in various regions and countries. It works as a broker and commission is charged for each booking made. The founding fathers of this initiative is Joe Gebbia, Brian Chesky as well as Nathan Blecharczyk. This company has got a worldwide service area.
A worrisome outlook for the future
Shares of Airbnb ABNB.O slumped more than 7% on Thursday after the company forecast slower growth in the second half of the year, disappointing investors of the sector expecting a rebound in travel demand after strong outlooks from major travel firms. The vacation home rental’s gloomy outlook came as setback to the industry, which saw a rebound in consumer sentiment in July, and was expecting budget-conscious Americans to return to vacations despite tariffs and inflation.
United Airlines UAL.O and Hilton Worldwide HLT.N last month forecast an uptick in bookings and strong fourth-quarter revenue growth. Last week, online travel agency Booking Holdings BKNG.O also posted upbeat quarterly results. Booking Holdings Inc is a travel technology company that has been incorporated under the Delaware General Corporation Law. It owns several travel fare aggregators as well as travel fare metasearch engines. Websites are operated across 200 countries and in 40 different languages.
Breaking down the details of the company
Booking Holdings has been ranked 243rd on Fortune 500’s list of the largest US corporation by revenue.
“The company (Airbnb) sees tariffs having an impact on margins in the third quarter, with the initial tariffs shock in April leading to a big drop in bookings,”
said Danni Hewson, head of financial analysis at AJ Bell. AJ Bell itself is a British public limited company. They aim to stockbroker services as well as online investment platforms. The company is not only listed on the London Stock Exchange but is also a constituent of the FTSE 250 Index. The company operations is divided into four core brands – AJ Bell Invest Centre, AJ Bell Securities, AJ Bell and AJ Bell Platinum.
Taking travel and accommodation to the next level
Investors will now focus on results from Expedia Group EXPE.O, due after the bell, to better gauge the health of the travel industry in the United States. Airbnb attributed its weak growth outlook to tough comparisons with the year-ago period, when strong bookings in Asia and Latin America had helped earnings. The company expects night bookings growth to moderate year-over-year going into the fourth quarter. It expects the implied take rate, or the ratio of revenue to gross bookings, to remain flat in the third quarter.
So far this year, Airbnb and Expedia shares have both fallen 0.6% each compared with an 11.4% rise in Booking Holdings during the same period. Airbnb commands a higher forward price-to-earnings multiple of 28.41, compared with Booking that’s trading at a more modest 22.69 and Expedia at 11.57. In spite of all of this, Airbnb still seem to have some comprehensive plans set out for the 2025. It seems one of the things that they will be working on is to establish themselves as an overall lifestyle platform.
This will offer services that stretch far beyond just accommodation, making it an overall smoother experience not only for travelers but also for hosts. One of the focus areas will be an integrated travel service. This will incorporate accommodation with travel, dining as well as local activities – basically like an all-in-one vacation service, if you can call it that. And to add more cream to the crop, sustainability is also high on the plans with the promotion of more eco-friendly stays. The company is not merely focused on one area of the industry but follows a more inclusive mentality.
GCN.com/REUTERS.