Edwin Dorsey, the author of "The Bear Cave" newsletter, has published a short report on Airbnb, Inc. ABNB, noting several scandals and "horror stories" impacting platform clients, as well as a growing competitive threat.
"Investors love this company, but behind the scenes, this company's most important partners are angling to compete directly," Dorsey tweeted before the article was published.
According to the newsletter, Airbnb's business has turned toward professionally managed properties, many of which are now preparing to compete directly with the firm.
The company's top professional hosts are developing their own booking platforms, providing cheaper prices to compete with Airbnb, as well as expanding their own email lists and distribution and offering loyalty incentives to book off of Airbnb.
Professional property managers account for 1% of all vacation rental hosts on Airbnb, but they handle 23% of active listings, which produce 35% of the company's total revenue.
According to the short seller, "Airbnb's future will look a lot different than its past because the company will now need to compete against its best and largest hosts."
Benzinga has reached out to Airbnb for comment on the "The Bear Cave" report.
Increasing Number of Horror Stories
Dorsey wrote that "horror stories" involving guests staying at Airbnb rentals have recently escalated, including unexpected cleaning requirements, last-minute cancellations, and multiple cases of visitors discovering hidden cameras in bedrooms and bathrooms.
He also referenced two stories in the report, one involving the accidental overdose of a 19-month-old child in an Airbnb that had been used as a party house, and the second, a $7 million settlement that Airbnb paid to a woman who had been raped by a previous guest who had made copies of the apartment key and reentered her rental.
Stay Heirloom Encourages Airbnb Bypass
Stay Heirloom, a prominent supplier of large-format, premium short-term rentals with over 300 listings in various U.S. cities, is encouraging visitors to book directly on their website rather than through Airbnb.
"The Bear Cave" demonstrated that renting directly with Stay Heirloom saves guests nearly half of the fees charged by Airbnb.
Source: The Bear Cave
ABNB Shares Down 4% After The Short Report
Airbnb is down 3.5% on Thursday, following the publication of the short report by "The Bear Cave."
Shares of the online marketplace for short-term homestays are now trading close to the lows seen in February, and are on track to post their fourth straight session of losses.
ABNB price action on April 6th, 2023 – Source: TradingView
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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