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This coming quarter, Airbnb anticipates a decline in growth and deteriorating demand in the US.
Restrictions in California and shorter booking lead times affected bookings, according to Airbnb’s CFO.
Tech companies’ lower-than-expected earnings and a dismal employment report preceded the news cycle.
The most recent earnings report from Airbnb, released on Tuesday, is the latest to be negative regarding the US consumer.
According to the firm, next quarter will see a “sequential moderation” in the number of nights and experiences booked. Demand from US clients is expected to be weaker as they book vacations closer to their travel dates instead of in advance.
“Latin America and Asia Pacific continue to be our fastest-growing regions,” the study found. “However, we are seeing shorter booking lead times globally and some signs of slowing demand from US guests.”
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Ellie Mertz, chief financial officer of Airbnb, said that the shorter lead times were due in part to a number of variables that could affect the booking timeframe, such as the new COVID variation or the war in Israel.
In North America, the CFO mentioned a “handful of components” that are contributing to the slowdown, which includes shorter lead times. In addition, according to Mertz, shorter lead times do not indicate that individuals are not planning travels; rather, it just indicates that they have not made the reservations as of yet.
According to the CFO, the change in lead times has caused some customers to book shorter-term rentals, but people still choose to book larger and more expensive listings.
The entire price display and cancellation grace time went into force on July 1 in California, where Mertz said that the US has had some regulatory hurdles. The “Honest Pricing Law” of California forbids companies from advertising a product or service’s price without factoring in “all required fees,” which are defined as “certain government taxes and shipping costs.”
Mertz stated, “We think that’s been a little bit of a headwind to our California business.” He went on to say that the California statute applies to both residents and visitors to the state.
Following Microsoft’s Azure revenue lower than expected and Amazon’s missed sales targets, this news arrives as the cherry on top. The head of Amazon’s financial department said that customers were preoccupied with politics and the Olympics, which caused a lack of activity. Customers, he said, were “cautious” and “looking for deals.”
In addition, the findings from Airbnb follow Friday’s less robust US jobs data, which has stoked fears of a recession. US stocks precipitated a sharp three-day fall following the announcement, however they began to show signs of recovery on Tuesday.
A request for comment from Business Insider was not promptly addressed by Airbnb.