Airbnb Inc. ABNB anticipates a decrease in bookings from U.S. customers, attributing the downturn to global events and new regulations in California.
What Happened: During the earnings call, Airbnb forecasted a “sequential moderation” in nights and experiences booked for the upcoming quarter. The company points to shorter booking lead times and signs of waning demand from U.S. guests.
Despite Latin America and Asia Pacific being Airbnb’s fastest-growing regions, CFO Ellie Mertz highlighted a global trend of shorter booking lead times. Mertz attributed this to various factors, including the new COVID variant and the war in Israel.
In North America, Mertz identified several factors contributing to the slowdown, including regulatory hurdles in California. The state’s “Honest Pricing Law”, which requires businesses to include all mandatory fees in their pricing, came into effect on July 1.
“We think that’s been a little bit of a headwind to our California business,” Mertz said.
See Also: Jamie Dimon Confident In Economy As Markets Retreat: ‘We’re Going To Get Through It’
Why It Matters: Airbnb reported quarterly sales of $2.748 billion, which beat the analyst consensus estimate of $2.738 billion and represents a 10.63% increase over sales from the same period last year. However, its quarterly GAAP earnings of 86 cents per share missed the analyst consensus estimate by 6.52%.
Amazon Inc AMZN also reported a lower third-quarter revenue forecast, which the company attributed to the ongoing Paris Olympics and the recent assassination attempt on former President Donald Trump.
Moreover, job creation slowed in July, signaling cooling labor market conditions and strengthening the case for imminent interest rate cuts as early as next month.
However, despite a higher unemployment rate in April, a Goldman Sachs analyst noted that a surplus of 1.6 million jobs in the U.S. is expected to result in higher wages and greater consumer spending, indicating a healthy consumer outlook for 2024.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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