What happened
Shares of Airbnb (ABNB 2.00%) were sliding today in response to a short report from Edwin Dorsey, who covered problems at the company on his Bear Cave blog.
Airbnb stock was down 4.1% as of 1:21 p.m. ET, after falling as much as 6.7% immediately after the report was released earlier in the session.
Image source: Airbnb.
So what
Dorsey's main argument against Airbnb seems to be that the company's base of hosts is increasingly being professionalized and that those professional hosts are launching their own independent websites, competing with Airbnb and taking business away from it.
The Bear Cave author also notes that the company's brand image is increasingly negative on social media, and that the company is plagued by horror stories about stays gone bad, including the death of a 19-month-old child who died after accidentally ingesting fentanyl at an Airbnb that had been used as a party house.
The blog post also says that the Airbnb host community has been shifting to professionally managed properties, and cites an AirDNA report that says that 35% of Airbnb and VRBO revenue comes from professional hosts, even though they make up just 1% of total hosts.
NASDAQ: ABNB
Key Data Points
Now what
Dorsey makes some good points, but most of what he says isn't new and much of it isn't really problematic for Airbnb.
For example, it's not unusual that professional hosts on Airbnb would also aim to build their own direct businesses. Vacasa, the publicly traded vacation rental company, lists properties both on its own site and on marketplaces like Airbnb. For these companies, Airbnb is a customer acquisition channel, just not the only one they use.
This dynamic is common in other industries as well. Plenty of Shopify sellers, for example, also sell on Amazon since they're looking for sales in any channel they can get them.
Professional hosts aren't going to cut out Airbnb as long as it remains a valuable revenue stream for them.
Airbnb has plenty of room for improvement, and the company should take complaints about cleaning fees and chore lists seriously. But its recent result should also reassure investors that the travel stock is still on the right track -- revenue growth remains strong and its margins continue to improve.
