Oct 29, 2026 · 1h 30m
Airbnb’s growth slows as investors test its durable edge
TIP856: Airbnb (ABNB): The Business Outgrew Its Peak, The Stock Hasn't w/ Kyle Grieve & Shawn O'Malley
The episode weighs whether Airbnb’s asset-light marketplace can keep expanding while AI, regulation, competition, and weaker cash-flow growth reshape its investment case.
- 1Airbnb’s marketplace remains differentiated, but growth and operating cash flow have slowed as the company reinvests in expansion.
- 2AI could raise customer-acquisition costs and disrupt advertising without necessarily undermining Airbnb’s underlying travel experience.
- 3International expansion, new offerings, operating leverage, and disciplined capital returns could support renewed long-term growth.
Don't miss
The hosts distinguish AI disrupting Airbnb’s customer-acquisition funnel from AI replacing the marketplace and travel experience itself.
The brief
Kyle Grieve and Sean O’Malley reassess Airbnb after making it a major portfolio holding, asking whether slower growth signals a broken thesis or a temporary investment phase.
The discussion centers on Airbnb’s asset-light, two-sided marketplace: hosts supply stays, guests create demand, and the company earns a toll-like take rate without owning the underlying homes.
AI-powered travel search could intercept customers before they reach Airbnb, threatening acquisition economics and sponsored listings even if the platform’s core experience remains valuable.
The hosts also examine regulation, Booking competition, professional property managers, pay-later bookings, and cash-flow timing, separating structural risks from accounting and investment effects.
Their conclusion is cautiously constructive: renewed bookings, international markets, operating leverage, and additional offerings leave Airbnb differentiated despite unresolved valuation and execution questions.
What was said on this episode
57 statements · 42 positive · 4 negative · 6 mixed · 5 neutral
Airbnb’s growth slowdown reflects temporary investment spending supporting future growth.
“a slowdown looks more like a temporary blip in spending just to support that future growth”
Listen at 0:47
Airbnb continues gaining market share.
“the business is continuing to add market share”
Listen at 1:06
Airbnb may continue growing strongly for many years.
“Airbnb may be able to continue growing well for many years to come”
Listen at 1:15
Airbnb has substantial future growth potential.
“Airbnb as having a long runway ahead of it”
Listen at 3:52
“revenue is just growing at 9% while cash from operations has drastically slowed to nearly 4%”
Listen at 6:24
Airbnb’s take rate has remained around 13%.
“Airbnb's take rate, meaning their revenue as a share of the gross booking value that they facilitate, has held around at about 13%”
Listen at 9:51
About 90% of Airbnb customers arrive through direct or unpaid channels.
“they still get about 90% of current customers coming directly from their platform or through unpaid channels”
Listen at 12:00
“in 2025, they just spend about one fifth of their revenue on marketing expenses”
Listen at 12:56
Airbnb’s interest income still generates hundreds of millions of dollars.
“interest income has fluctuated a bit lately, but it is still producing hundreds of millions of dollars worth of income for Airbnb”
Listen at 15:11
Airbnb gross booking volume is tracking toward low-double-digit growth for five years.
“gross booking volume. I assume this would grow at a low double-digit rate for about five years. And so far, they seem to be very much on track with that.”
Listen at 17:47
Airbnb gross booking volume compounded at 34% since late 2024.
“Gross booking volume since the last quarter of 2024 has compounded at 34%”
Listen at 18:25
Airbnb did not discuss sponsored-listing advertising in its last two earnings calls.
“ads for sponsored listings have not been actually discussed at all in the last two earnings calls”
Listen at 21:18
Airbnb did not discuss sponsored listings in its last two earnings calls.
“sponsored listings have not been actually discussed at all in the last two earnings calls”
Listen at 21:18
Airbnb sponsored listings may arrive later but remain an available growth lever.
“I have a little less conviction that we'll see them soon, but it's still a lever they can eventually pull, I'm sure”
Listen at 21:24
Sponsored listings could become a major Airbnb business in the future.
“it could be a big business for them down the road amongst all of their other opportunities”
Listen at 26:45
Without sponsored listings, Airbnb’s take rate may stagnate.
“we're just maybe going to see a little more stagnation just on that general take rate number”
Listen at 27:55
Airbnb insurance revenue grew 60% year over year across 12 countries.
“their insurance business is only offered in 12 countries, but it's growing revenue by 60% year over year”
Listen at 29:53
Airbnb appears to be taking market share from Booking.com.
“it does appear that Airbnb is still taking market share from them”
Listen at 31:12
Hotels cannot effectively compete with Airbnb’s group-travel offering.
“Airbnb has done such a great job basically creating their own version of group travel that hotels just really cannot compete with”
Listen at 32:53
Airbnb’s guest loyalty moat is strengthening over time.
“the real question is whether guests are loyal to Airbnb. And I think that's where the moat is and is actually getting stronger over time.”
Listen at 38:26
Airbnb app bookings are growing twice as fast as total bookings.
“app bookings are growing twice as fast as the business overall”
Listen at 38:50
Airbnb customer funds increased from $7 billion to over $12 billion.
“that has increased from $7 billion at the end of 2025 to over $12 billion by the end of Q2 this year”
Listen at 40:47
Airbnb’s pay-later feature will have a net positive benefit over time.
“I think the net benefit will be clear over time”
Listen at 42:14
Airbnb pay-later may increase bookings enough to offset reduced float.
“if that ends up driving more bookings because people feel more comfortable booking things further out in advance, I think ultimately, at least it kind of nets out or maybe slightly favors a net positive”
Listen at 43:50
Airbnb’s return on equity is about 35%.
“this number currently sits at about 35%”
Listen at 46:00
Airbnb’s return on equity is about 35%, indicating a strong compounder.
“this number currently sits at about 35%. So it's really, really strong. And I think this just speaks to the fact that Airbnb is a compounder.”
Listen at 46:00
Airbnb converted 38% of revenue into free cash flow over the last year.
“Airbnb turned 38% of its revenue into free cash for the last year”
Listen at 47:04
“in the first half, revenue grew 17%, while stock-based comp grew about 15%”
Listen at 53:04
Airbnb’s share count is expected to shrink by a few percent annually.
“I'd expect share accounts to keep shrinking by a few percent a year”
Listen at 54:16
Airbnb’s risk of debt trouble is currently very low.
“the risk of them getting into trouble with their debt is incredibly low at this point”
Listen at 56:04
Airbnb revenue more than doubled while employee count stayed similar.
“the revenue has more than doubled”
Listen at 58:19
Brian Chesky and Airbnb’s co-founders own over one-quarter economically.
“Chesky, along with his two co-founders, own over a quarter of Airbnb shares from an economic standpoint”
Listen at 1:00:23
Airbnb’s stock-price-based CEO plan could encourage unnecessary risk-taking, but has not so far.
“my view is that it could encourage really unnecessary risk-taking, but so far it hasn't”
Listen at 1:02:48
Airbnb’s 2026 executive bonus is 75% revenue growth and 25% adjusted EBITDA margin.
“the board actually simplified the executive bonus for 2026 too. And it's now based 75% on revenue growth and then 25% on adjusted EBITDA margins.”
Listen at 1:05:24
Airbnb’s 2026 executive bonus is based 75% on revenue growth and 25% on adjusted EBITDA margin.
“it's now based 75% on revenue growth and then 25% on adjusted EBITDA margins”
Listen at 1:05:29
AI agents are unlikely to replace Airbnb’s core experience.
“I'm definitely not worried about an AI agent replacing Airbnb”
Listen at 1:06:36
Airbnb AI resolves 45% of customer-service issues without human involvement.
“they now have AI resolving 45% of customer service issues without any human needing to be involved”
Listen at 1:08:53
AI can improve software-business output while requiring fewer employees.
“AI has made many software businesses better because they can go and get the same or even higher output out of fewer people”
Listen at 1:09:23
Rising Airbnb app usage would reduce AI-disruption concerns; stagnation would increase them.
“if you were seeing more and more users using the app, well, great, there's probably nothing to worry about. But if maybe it stalls or decreases, then that's a whole different conversation”
Listen at 1:09:35
Short-term-rental regulation is a local risk rather than a chronic threat to Airbnb.
“regulation is a real risk, sort of acutely, because it's more of a series of local headwinds than a chronic threat to the whole business”
Listen at 1:10:27
New York listings fell over 80% after regulation without materially affecting Airbnb overall.
“short-term listings fell there because of regulations by more than 80% in that first year. And yet you would have struggled to find any sign of that impact in Airbnb's overall results”
Listen at 1:10:48
Recessions reduce travel demand and Airbnb bookings.
“in a recession, the reality is that people are more likely to take fewer trips”
Listen at 1:13:02
Airbnb’s Brazil business grew over 30% year over year.
“In the latest quarter, Brazil grew by over 30% year over year”
Listen at 1:15:14
Airbnb India growth accelerated to 60% year over year.
“In India, growth accelerated phenomenally to 60% year over year”
Listen at 1:15:37
Airbnb hotel bookings are a small but rapidly growing share of total bookings.
“hotel nights booked are still just a single digit share of total nights booked for the company. they are growing three times as fast as home bookings in the last quarter.”
Listen at 1:18:27
35% of first-time Airbnb hotel guests book a home within one year.
“35% of first-time hotel guests on Airbnb then end up going to purchase a home through Airbnb within a year”
Listen at 1:18:53
Airbnb’s experiences supply grew nearly 80% year over year.
“Airbnb grew its supply by nearly 80% over the last year”
Listen at 1:20:49
Airbnb invested $200–250 million in experiences and services last year.
“Airbnb set aside $200 to $250 million last year to get these new businesses off the ground”
Listen at 1:22:01
Airbnb experiences and services are long-term options, not near-term material drivers.
“I see it as a long-term option rather than something that really moves the numbers in the next 12 to 18 months”
Listen at 1:22:14
Airbnb’s growth has rebounded to the mid-teens, keeping the investment thesis on track.
“with all the growth rebounding here in the last few quarters back up to the mid-teens, I think the thesis is quite well on track”
Listen at 1:23:15
AI has been a modest positive for Airbnb rather than a negative.
“AI has maybe been a tailwind, but certainly not a headwind”
Listen at 1:24:16
Shawn’s original Airbnb intrinsic-value estimate was about $150 per share.
“my original model put Airbnb's intrinsic value at about $150 a share”
Listen at 1:25:36
Airbnb is a high-quality company whose shares are fairly priced.
“I still think it's a wonderful company that is operating very, And the price is more than fair for shares in it.”
Listen at 1:26:51
Airbnb’s current share price is more than fair.
“the price is more than fair for shares in it”
Listen at 1:26:55
Below-value buybacks could increase Airbnb’s long-term value per share.
“if they can continue buying back shares at prices that are below intrinsic value, then chances are the long-term value per share is actually going to be maybe a little bit higher”
Listen at 1:27:19
Investors should hold Airbnb shares and let the thesis develop.
“just leaving the shares alone and letting the thesis play out is probably our best move here”
Listen at 1:27:43
Shawn recommends continuing to own Airbnb long term.
“I see no reason to want to sell out of owning the business long-term”
Listen at 1:28:00
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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