Airbnb stock tumbles; analysts warn of changing travel trends
- The company was down $17.46 to $113.01 at market close
- Bans, regulations in some cities may be factor in profit shortfall
- Many city dwellers say Airbnb reduces housing for residents
FILE – The Airbnb app icon is displayed on an iPad screen in Washington, D.C., on May 8, 2021. Airbnb says it’s banning the use of indoor security cameras in listings around the world by the end of next month. The San Francisco-based online rental platform said it making the change to simplify its security camera policy and continue efforts to prioritize privacy. (AP Photo/Patrick Semansky, File)
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(NewsNation) — Airbnb tumbled 13.4% on Wednesday after its profit in the second quarter fell short of analysts’ expectations, and it told investors that it saw some signs of slowing demand in the U.S.
The company was down $17.46 to $113.01 by market close.
That lagging demand is due to a number of reasons.
Some analysts have forecast that consumers are waiting until the last minute to book their trips due to economic uncertainty after market turmoil earlier in the week.
Also, many cities are implementing restrictions or outright bans on the marketplace.
Short-term rentals are only allowed in San Francisco homes if the hosts are full-time residents. They must also live in the unit for at least 275 days out of the year.
Last year, New York City began enforcing rules that Airbnb says amount to a ban on short-term rentals.
The new rules are intended to effectively end a free-for-all in which city landlords and residents have been renting out their apartments by the week or the night to tourists or others in town for short stays.
Under the new system, rentals shorter than 30 days are only allowed if hosts register with the city. Hosts must commit to being physically present in the home for the duration of the rental, sharing living quarters with their guests. More than two guests at a time are not allowed, either, meaning families are effectively barred.
Officials and housing advocates who had pushed for the restrictions said they were necessary to stop apartments from becoming de facto hotels.
While online rental listing services gave travelers more options in New York — and were a financial windfall to residents who rented out their homes while away on vacation — they have also led to complaints about scarce housing in residential neighborhoods being gobbled up by tourists.
The Associated Press contributed to this report.
