Airbnb Inc. (NASDAQ: ABNB), a short-stay booking platform, aims to declare net profits for the first time this year. However, the current economic crisis may cause these plans to fall through.
Inflation in the United States has reached an all-time high of 8.5 percent, the most in forty years. Interest rates were lifted by 75 basis points by the Federal Reserve, the largest rise in two decades. Furthermore, the number of people applying for unemployment benefits continues to rise, having already surpassed pre-pandemic levels.
All of these issues may have a detrimental impact on Americans’ vacation planning. Probably, a significant portion of them will decline to travel during their vacations in order to conserve money. As a result, reservations for Airbnb Inc. (ABNB) may be lower than projected.
The issue is worsened by problems in the aviation industry, where a lack of pilots causes flights to be canceled or rescheduled on a regular basis. In one day last week, about 21,000 flights were delayed in the United States, with over 3,000 planes canceled entirely.
Airfares are also rising. According to Adobe Analytics, domestic bookings in the United States increased by 47 percent in May compared to the same month last year.
As a result, while having a strong financial foundation and continuing to improve key indicators, Airbnb Inc. (ABNB) is operating in difficult conditions. In the first quarter, overall visits exceeded 2019 levels, with booked stays and activities (such as excursions) surpassing 100 million for the first time.
However, the company’s decline in the absence of any news from its side may indicate investor uncertainty about Airbnb’s prospects.
ABNB shares were valued at $99.49 after trading on June 17, having lost more than 40% since the beginning of the year. In the last month, the stock has dropped -7.91 percent, -40.43 percent in three months, and -36.38 percent in six months. The volatility of ABNB over the last week was determined to be 5.92 percent, while the volatility over a month was calculated to be 5.59 percent.