Airbnb shares plummeted by nearly 16% in premarket trading on Wednesday following the release of a disappointing third-quarter revenue forecast. The online travel giant attributed the weak outlook to slowing demand in the United States and shorter booking windows. Domestic travel in the U.S. has been under pressure since the start of the year, as consumers grow increasingly cautious about travel spending amid economic uncertainty.
The company’s forecast echoed a similar warning from Booking Holdings, another major online travel company, which also noted a decline in booking lead times globally. This trend suggests consumers are opting for last-minute travel bookings, indicating uncertainty and caution in spending.
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Airbnb Chief Financial Officer Elinor Mertz attributed the softness in long-term bookings to the company’s forecast. J.P. Morgan analysts cautioned that the trends observed by Airbnb and Booking Holdings, including softness in Europe and travel trade-downs in the U.S., could dampen investor sentiment toward online travel.
Jefferies analysts added that Airbnb’s disappointing outlook for nights booked follows Booking’s similar warning, raising concerns about the growth potential of the online travel sector.
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The company expects nights booked to increase by 6%-8% year-on-year in the third quarter, representing a slowdown compared to the second quarter’s growth of 8.7%.
While travel has shown resilience since the pandemic, this slowdown in demand raises concerns about the long-term outlook for the industry.