Airbnb’s stock slammed on report that ‘super hosts’ threaten app’s profits

Shares of Airbnb are getting hammered on concerns that a new, formidable competitor has emerged for the home-sharing site: its own “super hosts.”

Shares of Aibnb on Friday were recently off 4.9% at $109.69 after taking an initial tumble on Wednesday after the Bear Cave, an investing blog, posted a report saying an increasingly savvy pool of professional hosts are replacing hotels and other booking sites as the latest competitive worry for the company.

“Airbnb’s top professional hosts are building out their own booking platforms and offering cheaper deals to cut out Airbnb, growing their own email lists and distribution and offering loyalty discounts to book off of Airbnb,” according to the report.

One such host, Heirloom, a short-term rental company that has 300 properties in six cities, is offering “serene southern townhomes” in Nashville with eight bedrooms and a rooftop grill and hot tub for $2,266.96 from April 7 to April 9.

That’s about $125 less than what it would cost on the Airbnb website.

Professional property managers like Heirloom account for more than a quarter of Airbnb’s revenues, according to research from AirDNA, which focuses on the short-term rental market.

These property managers who supervise listing for independent owners only represent 1% of all Airbnb and Vrbo hosts, but they manage 23% of available listings, which generate 28% of total revenue, according to AirDNA.

Airbnb is leaning into professional hosts in response to “horror stories” about hosts who cancel reservations at the last minute, install hidden cameras in bathrooms and bedrooms or properties that are lacking basic safety devices like a carbon monoxide detector, according to the Bear Cave.

Professional hosts also tend to have better search rankings and are more likely to be listed as “super host” because of their better guest experience, the Bear Cave claims.

Airbnb customers have complained about the lack of fee transparency and about some of the onerous tasks they are asked to do before checking out, like stripping the sheets off beds or even doing laundry.

Last year, Airbnb’s founder and chief executive, Brian Chesky, tweeted, “I’ve heard you loud and clear … You feel like prices aren’t transparent and checkout tasks are a pain.”

Chesky, who listed a spare room in his San Francisco home on the platform, was responding to customer complaints about fees being tacked onto the end rather than at the beginning of a search for accommodations. The total price of a stay, including the cleaning fee — which can be as much as $200 a pop — are first revealed as customers are ready to check out and pay for a reservation.

Chesky said the company would be addressing these complaints, including making its fees more transparent in early 2023.

Airbnb’s revenues are mainly derived from a 14% service fee that guests pay and a 3% fee that hosts pay. 

Those fees are what the professional managers are taking aim at.

“Airbnb’s future will look a lot different than its past as the company will now need to compete against its best and largest hosts,” according to the Bear Cave.

Airbnb did not immediately respond for comment.