Airbnb shares plunge amid probe into unpleasant customer experiences

Airbnb shares plunged by as high as 6% on Thursday after an independent report on the unpleasant experiences of customers that used the platform to book stays. The probe shared the negative experiences of users who booked short-term stages through Airbnb.

Airbnb shares plunge as customers complain of unpleasant experiences

Airbnb is a popular short-term rental platform used to book stays. The company’s shares have dropped after a report disclosed some customers’ poor experiences. The company’s shares were trading at $109.69 on Thursday after dropping by 4.90%.

The Bear Cave report described users’ horrific experiences on the platform. The report shared the horror incidents of guests who booked their stays on individually managed properties online. The guests complained of unscheduled cleaning requirements and last-minute cancellations.

Some guests also complained of finding hidden cameras in the bathrooms and bedrooms. These complaints have shed a negative light on the company’s services, triggering Thursday’s notable plunge in stock value. The shares are down by 0.17% after-hours.

The shares are dropping despite the company reporting some of the best financial results in 2022. The company’s revenues in 2022 increased by 40% year-over-year, as it posted its most profitable year on record.

In 2022, the San-Francisco-based company reported a 16% growth in active listings in Q4 2022 compared to the same period in 2022. The number of nights and experiences booked via the platform in 2022 increased by 20% compared to the previous year. However, the booking numbers fell below the estimates shared by analysts.

The poor economic outlook has negatively affected multiple industries. However, travel companies have said that they are yet to record a slump in demand despite the economic uncertainty. This positions Airbnb on track to record more positive numbers this year.

Airbnb faces challenges

Airbnb has already faced major challenges this year. In March 2023, a building in Montreal used by guests who booked their stays through Airbnb caught fire. Montreal city officials issued an incident report saying that the units in the residential building were not supposed to be rented for short-term and long-term stays.

Some professional hosts that work with Airbnb have also cut their ties with the platform. Instead, hosts choose to build their booking platforms and lure guests through cheaper deals.

Airbnb faces steep competition from a rise in professionally managed properties. This competition could affect the company’s revenues. However, some analysts are optimistic about the future of the rental platform and its financial prospects.

Richard Clarke, an analyst with Bernstein, shared his thoughts on the company’s financial future, saying that the company operated in a favorable market. The analyst likened Airbnb to Amazon, illustrating that the platform was valuable despite customers having other options.

In March, Airbnb announced that it would lay off employees. The company said that the layoffs were aimed at reducing costs and protecting the company’s margins. The layoffs happened at a time when many tech companies announced plans to lay off employees because of the poor economic climate.