MW Airbnb wants to be an 'anything' app. The debate for investors hinges on these issues.

By Bill Peters

'The medium-term story for Airbnb is accelerating room growth internationally,' analyst notes

On Tuesday, Airbnb Inc. announced an extensive new effort to make services from professional chefs, local tour guides, celebrities and others available through its platform. Chief Executive Brian Chesky, in an interview with the Wall Street Journal, deemed the initiative "the Airbnb of anything."

Afterward, Wall Street analysts were excited. But they were still focused on the timing of the payoff of that expansion, as well as its prospects abroad amid muted travel demand and other challenges.

"Overall, we came away feeling inspired by ABNB's continued innovation in the travel space," Cantor Fitzgerald analysts said in a research note. "However, we believe it will likely take several quarters before the new products show a tangible benefit on financials."

Similarly, Oppenheimer analysts said the key investor debate "likely centers around pace of Experiences/Services scaling into meaningful revenue, especially with offerings being less commoditized and more unique to its platform."

Shares of Airbnb $(ABNB)$ slipped 0.4% on Wednesday. The stock is down 5.7% over the past 12 months.

Airbnb has faced muted travel demand, competition with hotels and other travel platforms, and rental restrictions in some cities concerned about the impact on available housing. Melius Research analysts noted that Airbnb has been trying to do more business abroad in an effort to rely a little less on the U.S.

At a presentation Tuesday in Los Angeles, Chesky said that Airbnb's expansion - which included a redesign of its app intended to highlight the new services and experiences it offers - required a rebuild of its technological infrastructure and the creation of new departments. Efforts to rethink the way Airbnb offers those services were also interrupted by the pandemic.

The new amenities the company plans to offer fall into three categories. The first, Services, includes offerings like spa treatments, personal training and hairstyling from professionals, and can be booked even if you're not staying at a vacation rental. The second, Experiences, includes tours of cultural landmarks and cooking classes. The third, Airbnb Originals, includes unique events with what the company called "the world's most interesting people," including celebrities and professional athletes.

"Although we understand why the moves into other products are big steps for the company, they still represent nice-to-haves," Melius Research analysts said in a note. "The medium-term story for Airbnb is accelerating room growth internationally.

"The debate around Airbnb over the past few years has been how the company can reignite growth after several years of demand pull-forward as more people tried Airbnbs given travel restrictions," they continued. "At the same time, the regulatory landscape has been fluid and capped off with [New York City] banning short-term rentals. The result was a question around sustainability of growth going forward."

Ellie Mertz, Airbnb's chief financial officer, said in an interview at Tuesday's event that the company tries to launch businesses that could conceivably get to $1 billion in sales within three to five years.

The people offering the new features on Airbnb are vetted beforehand, via third-party services and some automation. They determine what they charge customers, Mertz said, adding that Airbnb's cut of those sales is between 15% and 20%. She said the company is trying to encourage them to offer affordable prices.

How broad that marketplace for services might get, and where the limitations might be, is unclear. But she noted that dialing up product quality can be difficult on a larger scale.

"An incremental piece that consumers tell us all the time about why they don't book an Airbnb or what they would like to see is services, and we believe that that is particularly true for people who still consider themselves hotel customers," she said.

"It's like, 'I'd like an Airbnb, but at the hotel I can get room service, I can go to the spa, I can go to the gym,'" she said. "And so it's that insight that tells us if we offer services, it fills up some of that gap."

-Bill Peters

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May 14, 2025 21:43 ET (01:43 GMT)

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