By Chibuike Oguh
New York - A gloomy forecast from holiday rental firm Airbnb weighed on travel-related stocks on Wednesday as an expected slowdown in bookings signalled an impending slump in travel demand, with consumers seeking cheaper accommodation amid inflation and recession fears.
Airbnb, which reported a 20% rise in quarterly revenue on Wednesday, said it anticipated fewer bookings and lower average daily rates, mostly from price-sensitive travellers in the US, its largest market.
The company’s shares sank by more than 10% after the announcement and with multiple analysts cutting their price target for the stock.
Airbnb’s forecast will heighten caution in the travel sector, which encompasses hotels, airlines and holiday rental firms, according to an investor note by JPMorgan analysts, led by Doug Anmuth.
“We also believe Airbnb’s commentary will result in increased caution in the travel space, but more specifically around vacation and the US,” the analysts said.
Last month, Delta Airlines, the largest US airline by revenue and market value, offered an upbeat outlook for summer travel demand that it expects will result in higher-than-expected profit for the quarter through June.
But airlines are bracing for higher operating costs and lower revenue as shifting travel patterns in a post-pandemic world forces carriers to readjust schedules, cut flights, revamp networks and cram planes with as many passengers as possible, analysts and airline executives said.
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