Should You Hold Airbnb Stock

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Should You Hold Airbnb Stock

Should You Hold Airbnb Stock?

Airbnb (ABNB) is a leading platform for booking short-term rental properties. However, the stock has moved below its ATH, which has made many people doubt the future of Airbnb.

So, those who bought the Airbnb stock a few years ago are now in a pretty significant unrealized loss. At times like this, it's only natural for investors to wonder if they should cut their losses or continue to hold the stock in hopes of a recovery.

Airbnb Faces Multiple Headwinds

quick look at the Airbnb shows it has a very interesting business model. The platform doesn't own any property, but it allows property owners to list their properties. So, anyone who wants a place to stay for the short term can use Airbnb.

In a sense, Airbnb connects the property owners with those who need a place to stay for the short term. In exchange, Airbnb charges a commission, which is how it generates its revenue.

quick look at the data shows that around 51% of the properties are exclusively available on Airbnb. Meanwhile, another platform called Vrbo only has 19% of exclusive properties. On top of that, Airbnb also has a bigger user base than any other platform, which is also a plus point.

So if everything is great, then why is Airbnb stock down? The first reason is that higher inflation and higher rates have hurt consumer spending on travel.

Another reason is Airbnb's growth expectations, which show that the company is forecasting slower growth. Last but not least, the rental rates on Airbnb have gone up over the years, which has made them less appealing to the masses.

If a user can stay in a hotel room for a much lower price, then why would they choose an expensive option from Airbnb? That's also something that has hurt the growth of Airbnb.

There's no doubt that Airbnb stock is a very solid option, but it'sn't something that will return to growth anytime soon. So, unless the global economy starts to boom once again, the best choice is to stay away from Airbnb stock.

So, the safest option is to cut the losses and get out of the Airbnb stock. Another option is to wait, and you might have to wait for several years for Airbnb to make a comeback.

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