This is Aquitaine’s second post on Airbnb, following the teaser published in November. The full write-up is long overdue, owing to a difficult stretch of family circumstances. ABNB has risen significantly since, but the setup remains attractive for long-term investors. This piece was finalized before the May 7 earnings call; any relevant updates will be incorporated into part two. I hope the wait proves worthwhile.
“Certain people believe things for understandable reasons. But those reasons are nonetheless bad reasons.” - Sam Harris
Warren Buffett likes to say it takes twenty years to build a reputation and five minutes to ruin it. The opposite is less remarked upon and no less true: a reputation can be acquired in an afternoon and then outlive every piece of evidence against it. Marie Antoinette has been remembered for two centuries above all for a line she almost certainly never said – “Let them eat cake” – and one that wasn’t even hers to begin with. Rousseau gave it to an unnamed “great princess” in a passage written while she was still a child in Vienna. It was reassigned to her decades later, once the pamphleteers had built a queen the anecdote could plausibly belong to.
Brian Chesky has a smaller version of the same problem. Airbnb’s co-founder and CEO acquired the label of “overhyper” several years ago, and it has been repeated far more often than it has been examined. The label was not baseless. But the record shows something narrower than grand promises colliding with reality: an unusually animated CEO whose rhetoric outran the point he was trying to make. (That the same intensity had something to do with Airbnb existing at all is a matter I’ll leave aside.)
Since the 2020 IPO, Airbnb has met or beaten consensus on revenue and EBIT in all but one quarter. Whatever Chesky oversold, it was never the numbers.
Chesky’s commentary today is noticeably more restrained, which suggests the scrutiny landed. He has also spoken openly about suspecting he is neurodivergent context that reframes a communication style investors read as promotional. The overhyper label no longer dominates investor discourse, but it comes up often enough to matter, and it still functions as a filter: new evidence gets discounted before it is weighed. That is most of the reason Airbnb’s medium-term outlook and the Street’s estimates have drifted so far apart.
Which is odd, because Chesky’s implied guidance has lately been an unusually good predictor. In September he said he was unhappy with a roughly 10% growth rate and thought the company should be growing at least in the teens, then added:
“I believe we are going to accelerate growth next year. I firmly believe that. I don’t want to overpromise what we’re going to do. But I don’t think people should take our deceleration and extrapolate that forward.”
Extrapolate they did. In the weeks before Q4 earnings he signaled a reacceleration again, within the quarter and beyond. Airbnb reaccelerated in Q4 and guided to at least low-double-digit revenue growth for 2026.
Reputation is only part of it. The rest seems to be something of a distribution problem. Investors are conditioned to expect material information through formal channels – filings, earnings calls, press releases – and most of the time that is where it appears. But occasionally it surfaces in an interview, a podcast, an offhand remark, where it is easier to miss and therefore easier to misprice.
Some context first. 2025 was a pivotal year for Airbnb, arguably its most consequential from a product standpoint since the founding. It launched three new businesses: Services, “reimagined” Experiences, and Hotels, specifically boutiques and independents. (Airbnb has long carried a small number of hotel listings, but for reasons discussed later they amounted to little more than a rounding error relative to what is now being built.) Each of these, according to management, has the potential to generate billions in incremental revenue. Yet while the commentary has been highly bullish, it has also been carefully noncommittal.
Initially, Chesky suggested these businesses could take three to five years to scale, which he effectively defined as reaching roughly $1 billion in revenue, and was careful to add that not all of them would necessarily get there. By the Q2 2025 earnings call his language had moved a notch higher:
“I think each of these could easily be a multibillion-dollar business.”
The shift was subtle but not trivial: the $1 billion benchmark had become multibillion, and “easily” nudged the implied floor higher still. The “could,” however, continued to leave room for ambiguity. CFO Ellie Mertz meanwhile remained more restrained in both scope and timing, using phrases like “significant contribution,” “material scale,” and “multiyear path.” Nothing in subsequent calls, or in the many interviews and podcast appearances Chesky gave after the Summer Launch, strayed from that calibrated framing. (For readers who want the full chronology, I’ve compiled the verbatim remarks from both Chesky and Mertz here, with timestamped links where possible.)
There was one notable exception: an interview Chesky gave in January. The first real break came in his discussion of hotels. Noting that people often fail to appreciate the sheer size of the hotel industry, which is larger than the advertising industry dominated by Google and Meta, he stated:
“We do not need a large market share of hotels to have a huge business. Hotels will absolutely be a multibillion-dollar business.”
He offered a striking example, revealing that there were over 400 million searches for New York City on Airbnb last year. Given that Airbnb is “essentially banned” in New York, adding hotels means the company “can make quite a bit of revenue” there.
Two things stand out. The language was unequivocal – gone were the qualifiers and hedges, and in their place the definitive “will.” And the anecdotal framing became hard data: Chesky had previously alluded to “millions and millions” of New York searches each year, a phrase that, though delivered with notable emphasis, dramatically understated the 400-million-plus reality. He also raised the implied floor on promoted listings, likely to roll out later this year or next, noting that “I think advertising is another multibillion-dollar business – it’s at least a billion dollars.” But the clearest break came when discussing the trajectory of the new businesses collectively:
“We basically put a horizon of three to five years for these to be multibillion-dollar businesses.”
Publicly, Airbnb had not quite done that, at least not explicitly, which suggests Chesky was either conflating internal assumptions with external commentary or believed he had already been more precise than he was. Either way, the implications are significant. Taken at face value, the comment implies consensus revenue estimates for 2028 through 2030 may be understated by at least $3 billion to $8 billion before assigning any additional value to growth in the core business, which for reasons discussed later I believe is also highly likely. That estimate excludes any contribution from additional billion-dollar businesses not yet disclosed, even though management expects Airbnb can launch at least one new one per year for the foreseeable future.
Now, to address the elephant in the room: while I clearly find Chesky more credible than most, the investment case does not depend on taking his projections at face value. There is enough visibility into the underlying assumptions, and enough supporting data, to stress-test the case independently – including the major sources of debate and concern, such as AI disintermediation, heightened competition, and regulatory challenges, all of which will be covered in depth in Part II. Having done that work, my conclusion is that Airbnb is likely to substantially exceed topline estimates while also outperforming on operating margins. Before charting the path ahead, though, we need to establish the starting coordinates.
Disclosure: I and/or accounts under my control are long ABNB. This is not investment advice, but my opinion as of today, which may change quickly and without prior notice. Readers should conduct their own due diligence. Some quotes may be lightly edited for clarity and relevance.
Brief History
Airbnb’s origin story has been told often enough that there is little value in revisiting it at length; for the fuller version, Acquired’s 2020 episode remains the best single treatment. What follows is a high-level sketch of how the business evolved.
Airbnb – then Airbedandbreakfast.com – began as a low-cost substitute for hotels, used mostly by younger, budget-conscious travelers. Early listings were often spare rooms in occupied homes, and demand skewed heavily toward cross-border travel. Over time both the platform and its user base moved steadily upmarket, helped in no small part by the fact that many early users aged into higher income brackets. As inventory shifted toward entire homes and apartments, the value proposition changed with it. The appeal was no longer simply lower prices; it was more space, more flexibility, and a different kind of travel: the promise, as the company once framed it, of living like a local. Private rooms account for less than 10% of listings today.
By 2019, Airbnb had reached nearly $40 billion in gross booking value and almost $5 billion in revenue, and had become one of the most recognizable consumer internet companies in the world. What it had not yet become was profitable.
Then came the pandemic. Within weeks Airbnb lost roughly 80% of its business and cut about a quarter of its workforce, and the shock looked potentially existential. Yet the recovery was surprisingly fast. Cross-border travel gave way to domestic trips, average stays lengthened as remote work untethered millions from the office, and family and group travel rose sharply, lifting average daily rates. Some of those effects have moderated, but several remain structurally above pre-pandemic levels: stays of 30 days or longer have settled at roughly 17% to 18% of nights booked, up from about 14% in 2019, though below the 20%-plus pandemic peak. Average trip length is now roughly four days.
Airbnb went public in late 2020 at $68 per share and traded above $140 on its first day, making it one of the year’s standout IPOs. At the time the three co-founders – Chesky, Joe Gebbia, and Nathan Blecharczyk – collectively owned about 42% of the company, with near-equal stakes and near-total voting control. As of April 2026 they still held roughly 27% of the economic interest, with Chesky and Blecharczyk together owning about 22%, while continuing to control approximately 81% of the vote. Gebbia is no longer involved in day-to-day operations but remains on the board. The company turned profitable in 2021 and now generates some of the highest free cash flow margins in the S&P 500, though not without caveats – including a notably heavy stock-based compensation load.
Business Model and Overview
“Our core business could easily be two to three times bigger—and we did $80 billion in bookings last year.” - Brian Chesky (June 2025)
The beauty of Airbnb’s marketplace model is that, unlike hotels, it “doesn’t have to pour concrete,” as Chesky put it. Airbnb doesn’t own or operate the properties on its platform; it connects guests with hosts, facilitates the transaction, and takes a fee. Asset-light, scalable, robust margins. Until very recently, that advantage was reflected in a market cap exceeding that of any single hotel operator in the world.
And yet the hotel industry itself remains far larger than the short-term rental market. In the U.S., Airbnb’s largest market, the company still accounts for only about one in ten nights away from home; the other nine go to hotels. I’ll return later to why travelers choose one over the other.
Airbnb has more than 9 million active listings across 220-plus countries and regions. Despite that footprint the business remains concentrated in a handful of mature markets, with roughly 70% of revenue coming from just five countries: the U.S., U.K., France, Canada, and Australia. By volume, EMEA accounts for the largest share of nights and experiences booked at roughly 40%, followed by North America at about 30%, Latin America at 17%, and Asia-Pacific at 13%. From a revenue standpoint, North America remains disproportionately important.
There are more than 5 million hosts on the platform, around 90% of them individuals, which makes Airbnb the largest non-professionalized supply base in the world by a wide margin. For most, hosting is supplemental income rather than a full-time business. Around 55% are women, and common occupations include schoolteachers, healthcare workers, and students. In the U.S., the average host now earns roughly $15,000 a year, up from less than $10,000 five years ago.
Supply growth has historically been organic. More than 30% of hosts were previously guests, and word-of-mouth continues to bring new supply onto the platform, helped by the fact that roughly half of new hosts receive a booking within three days and 75% within nine – significantly faster than on competing platforms. Large events have also proved powerful supply catalysts: during the Paris Olympics, more than 700,000 guests stayed in Airbnb listings while roughly 50,000 new listings were added, about 80% of which remained active afterward.
The vast majority of hosts still list only on Airbnb, though cross-listing has been rising. In the U.S., professional operators – defined by AirDNA as those managing 21 or more listings – cross-list at rates of roughly 60%, versus around 21% to 28% for non-professional hosts.
The mix between individual and professional hosts is shaped in large part by local regulation, a theme I’ll return to. It shows up clearly in the supply mix across major European cities.
Competitive Landscape
The short-term rental market is effectively an oligopoly. Airbnb, Booking.com, and Expedia, which owns Vrbo, controlled roughly 71% of the market in 2024, up from 53% in 2019. Booking and Expedia are traditional online travel agencies, offering hotels, vacation rentals, flights, car rentals, and other travel products, and their inventory is more professionalized, spanning hotels and large property managers. Airbnb and Vrbo are more narrowly focused on short-term rentals, though Airbnb’s expansion into hotels, services, and experiences is beginning to blur that distinction.
Accommodations account for the bulk of revenue at both Booking and Expedia, at roughly 90% and 80% respectively, with the remainder tied to flights, car rentals, and other products. Booking also has the highest effective take rate, averaging roughly 14.4% over the past two years, compared with about 13.5% for Airbnb and 12.3% for Expedia. Booking is particularly strong in Europe, where it holds roughly 48% share versus about 40% for Airbnb and just 2% for Vrbo. In the U.S. the pattern reverses: Airbnb leads with roughly 43%, followed by Vrbo at about 21%, while Booking trails at just 8%.
Vrbo occupies a narrower but still defensible niche. Its supply base skews toward entire homes and its customer base over-indexes toward families, group travel, longer stays, and older travelers, which gives it a clearer identity than its relative scale might suggest. Still, the long-term trajectory is hard to miss: despite a 13-year head start, Vrbo was overtaken by Airbnb within a few years and is now roughly a third its size by revenue. Google Trends is an imperfect but useful proxy for that shift.
Most bookings now happen through apps, and Airbnb leads there as well. In 2025, roughly 64% of its bookings came through mobile, versus the mid-50s for Booking and Expedia.
The Moat(s)
“Airbnb” has become nearly synonymous with short-term rentals. Guests rarely say they stayed in a vacation rental; they say they stayed in an Airbnb. Outside of Vrbo in the U.S. – and even there, to a much lesser extent – no competitor comes close to that linguistic hold. Airbnb has crossed the threshold from noun to verb, and has naturally leaned into it in its marketing: “Now you can Airbnb more than an Airbnb.” That brand strength shows up where it matters. Since the pandemic, roughly 90% of Airbnb’s traffic has come through direct or unpaid channels, well ahead of peers.
The P&L implications are not subtle. In 2025, Airbnb spent about $1.6 billion, or 13% of revenue, on brand and performance marketing. Booking and Expedia spent roughly $8.2 billion and $7.3 billion, or about 30% and 50% of revenue, on the most directly comparable measures. This is sometimes called the “Google Tax,” and Airbnb pays far less of it.
What makes the brand moat especially notable is how it was built – without the bundles and convenience of the traditional OTAs. No flights. No car rentals. No loyalty program. And, until recently, virtually no hotels. Each of those categories will likely prove necessary if Airbnb is to become the “one-stop shop for travel” Chesky envisions, a point I’ll return to.
Beneath the moat sits a classic marketplace flywheel. Greater supply, especially when it is unique and high-quality, drives more demand; more demand makes the platform more indispensable to hosts, drawing in still more supply; and that deeper supply base improves price competition and, critically, gives Airbnb more flexibility to shape the marketplace itself. The company has leaned into that advantage aggressively. Since 2023 it has been “elevating the top and cutting the bottom,” as Chesky put it, removing more than 550,000 lower-quality listings while promoting “Guest Favorites,” its top 10% of listings by rating, which now account for roughly half of bookings. The result has been fewer support interactions and better booking conversion, and together with a broader set of friction-reducing product changes, these have pushed Airbnb’s NPS to its highest level since the pandemic – “by far,” according to Chesky.
That selectivity, combined with Airbnb’s disproportionate share of non-professional hosts, has lifted the average listing rating to roughly 4.8 out of 5 stars. Competitors do not disclose directly comparable figures, but the gap is visible: in my own cross-platform work across major tourist cities, weighted-average ratings for first-page OTA results tend to fall around 4.2 to 4.3, and slightly lower when hotels are included.
Better supply → better experience → more demand → greater selectivity → even better supply. That, in a nutshell, is the Airbnb flywheel. Two further advantages help keep it spinning.
1. User Interface
Spend a few minutes on each of the major platforms and the difference is hard to miss: Airbnb’s product is, by some distance, the most pleasant to use. That has been true for years and is likely to remain true, for several reasons.
First, two of the three co-founders, Chesky and Gebbia, came from design backgrounds – and this is more than a matter of training. They live and breathe design; it is part of their DNA and, by extension, the company’s. As Chesky put it:
“I obsess over our app: its design, its interface … Everything must be perfect.”
Second, Airbnb is a technology company operating in travel rather than the other way around. The distinction can sound cliché, but it explains a great deal. By all accounts Airbnb has some of the strongest technical and design talent in the world, helped by its San Francisco base and reflected, not coincidentally, in its materially higher SBC. Finally, design quality is simply something Airbnb has chosen to optimize for, even at the expense of near-term conversion – in contrast to its OTA rivals, where conversion is the organizing principle.
Below are Booking’s and Airbnb’s search pages, both at 100% zoom.
It is not a knock on Booking to say that it feels, by comparison, like a high-performance marketplace funnel, because that is exactly what it is. The classic e-commerce persuasion cues are all there: urgency prompts, competing colors and font sizes, icons, badges. The prominently featured filters nudge the user to narrow the search if the top picks do not appeal. Airbnb does the opposite. The filter button is discreetly tucked away, the wider layout gives the page more breathing room, and there are fewer visual interruptions, stronger aesthetic cohesion, and a general sense of openness. The experience feels less like shopping and more like browsing. The page seems to have one job: make the listings look appealing.
The contrast is equally clear at the listing level.
This “beautiful merchandising,” as Chesky describes it, directly reinforces Airbnb’s core advantage: the largest catalogue of unique, non-commoditized supply.
2. Community and Trust
Reviews are a form of currency – proprietary reviews, that is – and Airbnb has more than 500 million of them. Engagement is unusually high, with roughly two-thirds of guests leaving a review after a stay, and those reviews tend to be longer and more detailed. That is not accidental. It is a direct consequence of Airbnb’s deliberate effort to foster a sense of “community,” a word that can sound soft until one considers what the product actually requires: persuading people to stay in, or hand over, private homes.
Unlike other platforms, where as Chesky has noted “you often don’t even know who people are,” Airbnb profiles are rich and consistent. Users have profile photos, visible review histories, trip counts, and tenure on the platform, none of which are shown in quite the same way on Vrbo or Expedia. Booking does somewhat better, displaying country of residence and profile photos, but adoption remains limited, and unlike Airbnb the photos often don’t show the actual user. These differences sound minor until you see them side by side.
The small touches combine to produce a not-so-small effect: Airbnb feels warmer, more personal, less transactional. More recently the company has started allowing users to see who else has signed up for a group Experience, and to message them afterward, so Airbnb is beginning to look less like a travel marketplace and more like a social platform layered onto one. That reduces uncertainty on both sides of the transaction, which matters when one of the top concerns for would-be hosts is the idea of a stranger staying in their home.
That’s a wrap for part one. Part two is where things get more interesting: the reacceleration case in both the core business and the new verticals, then the bear arguments – my favorite part – stated at their strongest before I take them on one at a time. Valuation and catalysts to close.
Thanks for reading. If you found this useful, a thumbs up or a share really helps. Until next time.
Glad to come across another investor long on Airbnb. I went long in August 2024 and have only gained conviction over time as they launched the new businesses and the stock didn’t react.
In terms of competitive advantage, I think the new ventures also position the firm as a platform where the incremental cost of new business lines is effectively zero, creating a very high flow through.
The company also has a great value proposition for hosts, given their service has a lower take rate for property managers while offering more property management services and insurance. It really is a no brainer for hotel operators to choose ABNB over Booking or Expedia.