Sixteen months ago, AirbnbABNB

CEO Brian Chesky told investors that his business was “broken” because it had “never fully built the foundation” and lacked the pillars necessary for growth. That might have come as a surprise to investors, who had pushedABNB

stock up more than 50% that year, but it didn’t come as a surprise to analysts, who had pushed sell ratings to an all-time high as the company embarked on a turnaround plan.

After the Airbn-bust: At the time of Chesky’s comments, Airbnb was suffering from a perfect storm of new competition, declining occupancy rates, and regulatory headaches from accusations that it pushed up rents in urban areas. In fact, since his comments,ABNB

stock has little-moved. But despite its so-so stock showing, it remains the decisive leader in the vacation rental space — and it hopes 2025 will be the year it can finally corral that goodwill into a broader presence in the travel industry.

• In 2024, the company’s revenues grew 12% to $11.1B, a marked decline from its 18% growth in 2023 — worse, its net income fell 45% year-over-year to $2.65B.
• Chesky ascribed the slowdown to weaker bookings in the peak summer period, with growth reaching its slowest point since the pandemic in Q2 2024.

Eying Experiences

Reports from a wide variety of travel peers have teased similar warnings about the state of the consumer and economy. Despite that, the firm is trudging ahead with a plan to expand into new businesses — some of them might look and feel familiar.

• Last month, Airbnb said it would invest $200-250M to launch several new businesses, which are believed to be related to its “Experiences” product, which was put aside during the pandemic.
• Morningstar’s Dan Wasiolek told WSJ that the company could hit $10B from experience bookings by the end of the decade — but it’ll have to compete in the crowded travel services industry with rivals like TripAdvisor and GetYourGuide.

Go scale: A fresh incursion into the travel services and experiences space would give Airbnb new ways to upsell customers on its existing marketplace, potentially bolstering its slowing growth — and maybe even exciting investors who have sworn off the one-time highflyer. However, mum on details, Airbnb simply says it hopes to generate $1B in revenue from the new businesses, declining to offer additional details. But there’s no shortage of optimism from the firm, which is bucking tech’s wide trend of layoffs to boost hiring and expand its marketing ahead of the product’s launch in May.