Airbnb has been a total failure as a public company which is what no one has been willing to say aloud! Its stock is negative over the past 5 years while hoteliers Marriott, Hilton, Hyatt, IHG, Wyndham, and OTAs Expedia and Booking have soared. Only Choice really has struggled more of late in their stock price but is at least in the green.
Rafat Ali, CEO and Founder of Skift recently provided the best strategic assessment I have read of why this is the case as Airbnb is now expanding into an undifferentiated OTA platform seeking to provide access to hotels, experiences, etc., to find profitable scale growth. You can find Rafat’s exceptional piece here: https://lnkd.in/ga9uHEJZ
It smacks more of desperation than of strategic differentiation and distinction. You can wrap it in “Airbnb is a lifestyle brand” and they can be the end all be all of serving your broader lifestyle needs however, that is about as true as was it true that their most recent attempt to portray experiences as unique, celebrity focused was anything more than a marketing gimmick. Many airbnb’s which used to be a “good value” (i.e. cheaper) or alternative to hotels when you have a larger group, now have many other competitors who also often carry much of the same inventory. GenAI/Agentic threatens to make them just another supplier.
You can credibly argue it is a valuation issue not a business one- the stock price has been overvalued and they just need to grow into it, however, 5 years on, most CEOs would have been replaced by the board or faced a shareholder revolt- I do not own nor am I short Airbnb stock. And it is not just that the stock is lower 5 Years plus after the IPO, it’s that largely all their competitors have killled it during this period. You can go on about how many more rooms Airbnb has or their valuation vs. hotels, but ultimately, that doesn’t matter. And yet, no one has raised the issue as directly or bluntly.
Airbnb’s founders are brilliant and among the most innovative and successful at building Airbnb and the STR space. They deserve recognition and always should as founders and builders. As a public company however, they are an abject failure to this point- yes, cash flow blah blah blah, yes global expansion blah, blah, blah, but it is hard to call this a “Success Story” when the ultimate scoreboard is in the red and almost everyone else is bright green 5+ years on! Imagine if you were an employee with equiity or are trying to attract equity incented talent- you’d have to pay a lot more to get folks to stay.
Maybe they have a resurgence when there is the next economic downturn or they can become a broader OTA and lifestyle brand broadly across categories outside STRs however, it doesn’t look like the the story is resonating based on the stock and what they have delivered thus far for all the good reasons Rafat points out.
As the old saying goes, in the short term, the stock market is a popularity contest, in the long term, it is a weighing machine!