Airbnb Gains as ‘Healthy’ Demand Fuels Faster Growth in 2026

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1:50Bloomberg Audio Studios. Podcasts, radio, news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Tons of earnings coming out here. A lot of tech stuff, a lot of user economy stuff. I'm looking at Airbnb, Instacart, all kinds of stuff. Mandeep Singh, he covers all the tech industry for Bloomberg Intelligence. He's got the team, which he manages all around the world for Bloomberg Intelligence. Mandeep, let's start with Airbnb.

2:30I've seen a stock trading up here. They had some pretty good numbers. I was kind of surprised. Their double-digit revenue growth in 2026. What's the story there? Yeah, I think any time you have a big event coming up, which in this case, it's the FIFA World Cup in the summer. Good point. That's always good news for Airbnb. And that's what you're seeing, I think. I mean, expectations were low, but clearly they're seeing some lift from big events as well as the reserve now pay later, which is another way to stimulate demand. But overall, supply growth seems to be improving and they want to expand into hotels and other areas.

3:11It may compress their take rates a little bit, but there is no doubt that they want to expand the footprint of what they have to offer on the platform. They've also, thanks to a lot of marketing, made clear that they want to expand into services as well for guest sourcing at Airbnb venues wherever they go. How much is that a meaningful contributor to revenue? No, not yet. I think all of that hotel services experiences is still less than 5 % and dilutive to margins. But look, the UI for these companies may change because of AI. So one of the things that they got asked on the call is how are they preparing for that UI change?

3:55And I think the moat over the years for all of the marketplaces has been get bigger in size and, you know, have more frequency with the users. And that's why experiences and hotels is just their way of engaging more with their daily active users. Mindy, how's the market share kind of shaking out here in the world of hospitality in terms of the Airbnbs of the world versus the traditional hotel motel here? What's the market share? What's the split? And are we still seeing movement there? Yeah, I mean, all of these big three OTAs, Booking, Expedia and Airbnb, they do the majority of the booked room nights.

4:39when you think about the global scale, these are the three scale players. The difference is in the profitability. Airbnb is a lot more profitable than, let's say, Expedia, which is why you see that kind of stock reaction today. And I think what Airbnb has done well is really added more fragmented supply. So the more fragmented the supply, the harder it is to disrupt. Even if you get a new UI tomorrow because of all the AI innovation, How do you add the supply, you know, the host that Airbnb has added over the years? It's very hard to kind of disrupt that mode because that supply part is the hardest part when it comes to marketplaces.

5:21I'm kind of surprised that Airbnb is now offering rooms at boutique hotels in New York, L.A., Madrid, and San Francisco. Like that feels like it's going into the market that it intended to disrupt and the hotel companies are teaming up with it. How did that come about and does this become a bigger part of its business? I wouldn't say it will become a bigger part, but those smaller independent boutique hotels were looking for additional distribution. And Airbnb as a platform obviously has a lot of direct traffic. So I think it made sense for Airbnb to boost their supply because they are sort of plateauing out when it comes to the vacation rentals, especially in developed markets.

6:01And so from that perspective, supply growth is very essential for a marketplace and adding independent boutique hotels does add to that supply. And overall, if it helps them boost frequency and engagement on the platform, I think that's what they're looking for here. All right. Well, we got you, Mandy. Pinterest stocks down 21 percent. What is going on there? I mean, that's when Meta, you know, when they guided to 30 % top line growth in the first quarter, it had to be at the expense of, you know, the smaller companies. And we saw Reddit do well, but clearly Snap, Pinterest, these guys are exposed to the same advertisers as Meta is.

6:44And last night, Pinterest called out, you know, tariffs being one of the reasons for advertisers pulling back on their platform. retailers, you know, clearly are spending a lot more on meta, even though meta is the scale player. These companies are not getting the advertising dollars at the scale that meta is getting. And that's why you're seeing that slowdown and growth. Does AI save the day? Pinterest says it's launched Pinterest Assistant. It's first. And of course, this is marketing jargon. First AI powered visual first collaborator for online shopping. I mean, the problem is, you know, No matter what you do, you are competing with a scale player like Meta, which is allocating$135 billion in CapEx this year, building their infrastructure, using that for AI.

7:32And that's where I think competition is very tough for all the smaller players on that side. Stay with us. More from Bloomberg Intelligence coming up after this. Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy. Bond markets are massive, murky, and let's be real, lots of firms throw a couple flashy funds your way and call it a day. But not Vanguard. At Vanguard, institutional quality isn't a tagline. It's a commitment to your clients. We're talking top-grade products across the board of over 80 bond funds, actively managed by a 200-person global squad of sector specialists, analysts, and traders.

8:14These folks live and breathe fixed income. So if you're looking to give your clients consistent results year in and year out, go see the record for yourself at Vanguard.com slash audio. That's Vanguard.com slash audio. All investing is subject to risk Vanguard Marketing Corporation Distributor. I'm Barry Ritholtz, inviting you to join me for the Masters in Business podcast. Every week, we bring you fascinating conversations with the people who shape markets, investing, and business. CEOs, fund managers, billionaires, Nobel laureates, traders, analysts, economists, everybody that affects what's going on in the market, whether you own stocks, bonds, real estate, commodities, crypto, you really need to hear these conversations.

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9:33You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. All right, let's shift gears and talk a little bit about what's been happening in tech land. Software companies have had a rough, rough week, rough couple of weeks, to be honest. It hasn't been limited to this week. Anurag Rana is our Bloomberg Intelligence Technology Analyst. And Anurag, talk to us a little bit here about how management is dealing with the AI scare that's just, you know, taking every part of the economy by storm.

10:14It's kind of rolling through different sectors and everyone seems to need to be able to answer for how they're going to survive the onslaught of AI. And this kind of scare is very different than anything we have seen in the past because, you know, in the previous downturns or whenever we saw a big sell-off, the question was the near-term demand is an issue or there's some balance issue with someone. In this particular case, the case is that there is no need for software a few years from now, not today or tomorrow, but a few years from now. So what that does is when you're doing discounted cash flow analysis, the terminal value of that particular company or a stock, you know, they're saying it's going to be close to zero.

10:55And that's an argument it's so difficult to deal with because that event hasn't happened. It's all, you could say, a thesis of a particular group of investors that they're saying that there is no need for a lot of these companies that depend on the intellectual capital of software developers, people who are using it, and we could all do this in-house. And I think that's the big fear everybody's grappling with. And every time you see somebody say, well, this particular software can go out and do something in the legal world, all the stocks that are part of the data network or the software that sells it would, you know, sell off.

11:31So it's really a big dilemma for even management teams as to what to even do right now. Yeah, I guess what would be frustrating for investors in some of these software names is like AI, we don't even know what AI is going to be and what the use cases are going to be. So I think what's happening is people are just spitting out the worst case scenarios that, you know, and that's what I'm seeing in some of these stocks that are off 30, 40 percent. And these are real companies with real earnings. Is this something that plays out over time or how do you think this trades? Yeah, the fear of the terminal value going to zero, you cannot undo it in the next few months.

12:10It's going to take several, I mean, honestly, years to play out. What you have to figure out is, do you have a framework under which you are thinking about what kind of companies are better protected than the others. So, for example, one could argue that cybersecurity companies have a better presence there. Second place that we are arguing is companies that sell into really large enterprises that have domain expertise, companies that are critical to you running your daily operation, your P &L, your human resources. Those are the ones that are a far more sticky product than the point product companies that are selling into the smaller or the medium-sized enterprise.

12:50But who knows? Maybe that theory goes out of the water as well. So I think you have to have some framework under which you are gauging these companies, not so much anymore by the financials, but by the business model and where the impact could be. Domain expertise. That's a term that I've heard pop up over and over again. Anarg, what does that mean in the context of software companies? So think about it this way. We, you know, when there is an issue that we have internally while we are working, we put in a ticket to figure get our HR system fixed or our computer fixed. That falls into a realm of a thing called IT services management.

13:28There's a company called ServiceNow that has 40 % market share in that area. You look at somebody like an SAP, they pretty much control the finance and accounting software that's out there. You look at a company like Workday, they control the HR software market or the HR systems people use. That's the kind of domain expertise I'm talking about because that's something only these guys do. And they do it very well for larger companies. And there are smaller companies that target the lower end of the market. But these are the ones that deal with it. I'll tell you another one. Shopify, for example.

14:01Shopify is something that does digital commerce better than any company out there. And they probably have one third of the overall market right now. And they're growing at 25%, 30%. But guess when they reported? It didn't matter. Stocks still went down after that. This, if you're, you know, an investor with high level of conviction, this is a once in a career type opportunity, potentially. Do you talk to some, I'm not going to call it smart money, but do you talk to people that have some experience that are saying, this is it. I'm backing it up. I'm loading up on some of these names where I feel I have a high level of conviction in their cash flows.

14:37Are you hearing any of that yet? Yeah, I haven't had that many incoming inquiries to talk about software stock in many years because they were very expensive at that time. I think if you go out and read the article, the Amazon AWS, you know, the head, he comes out and says, you know, this is just overblown at this point. So you have like somebody like Amazon Web Services CEO talking about it in the market. So, you know, there is. And then, you know, on the other side, there is an argument that, you know, all these jobs would be automated in the next two years or so. So these two fears, and we all know when you have a fear in the market, people shoot first and they think later.

15:14And that's kind of the dilemma or that's kind of the market where we are, right? Has that fear dissipated a little bit as we got towards the end of the week? Or is it still just as intense as it was a few weeks ago, Anurag? I think it gets worse every week. I mean, I started looking at this, you know, the second half of last year. And every time I would talk about it and know this is, you know, that is just too overblown and this doesn't make sense. You know, next week you come in, everything is down 5 % to 7 % again. I mean, in total, there are certain companies, as I said, you know, look at Shopify.

15:45They blew out their quarter, grew 30%. Next quarter consensus was 25%. They said next quarter they're going to do 30 % and they have a massive agentic, you could say, strategy that nobody else has. Stock was down both times. I mean, it didn't matter. So it's very difficult to put rational thoughts at that point. Stay with us. More from Bloomberg Intelligence coming up after this.

16:13You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. We went to go to Ireland. We asked this kid who is a tech geek, hey, we're thinking about going to Ireland. He asked us a couple of questions. Fifteen minutes later, he comes back with a full itinerary that he got off of ChatGPT. I said, oh boy, what does this mean for the travel agents, the OTAs? Not good. Nicole D'Souza joins us. She's an internet and software equity analyst for Bloomberg Intelligence.

16:52I'm thinking about the Expedies of the world, Nicole, all those types of things. So what's going on with that business? Is that going to be one of those business that's really disrupted with AI? Yes. So I think you bring up a great point. Now travelers, instead of going to booking Expedia, TripAdvisor, they're just working with ChatGPT. So they don't even really have to see the back end. So they are looking at, you know, not just now planning on an AI product, but they're also potentially going to be booking through an AI product. So they will ask ChatGPT, you know, this is where I want to go.

17:23This is what I want to see, what I want to do. It'll give them an itinerary, and then it'll work with the supply partners directly to book everything. Wow. Because, I mean, again, this kid came back with an agenda. This kid is 28 years old. Came back with an agenda that was, this is where you're staying. This is where you're going to eat. Cars booked. We're going to get a car. Here's your flights, recommended flights, blah, blah, blah. Yep. And then the next step would be booking it. Yes. Wow. Yes. All right. So if I'm the Expedias of the world, what am I doing here? So they are rolling out their own AI products.

17:56It's a little too early to tell if they'll really be able to compete with something like ChatGPT. Expedia has like a really interesting product where you can take social media, like a reel from Instagram, put it into Expedia's AI product, and it'll create an itinerary based off of what you're seeing on Instagram. So it's kind of like you go from just having inspiration for a potential trip, and then it gives you the exact flights, hotels, everything. Expedia just reported some results. How were they? They were actually pretty solid. So the real overhang on Expedia for the last year has been the U.S.

18:31travel market, which has been pretty stagnant. That has been recovering. Expedia is primarily exposed to the U.S. market. They don't have as big of a global presence as Booking.com. And Expedia's results were pretty solid, strong execution, pointing to a recovering U.S. travel market so we were pretty pleased uh just with uh their execution over the last quarter when i look at expedia trip advisor bookings are they kind of the same totally the same or are they differentiated so trip i would say is differentiated they've actually changed their platform a lot in the last few quarters they are now focusing on becoming an experiences booking platform so if you are looking to book um you know a cooking class or a wine tasting or a walking tour you can book that directly on trip platform.

19:18So a little bit different than kind of what booking Expedia do with hotels and flights. What's that? How's that industry? What's the percentage now that people book through these OTAs versus going to Marriott.com or something like that? So we have definitely seen, you know, an increase in direct bookings. It's actually hotel partners now are incentivized to maybe work directly with AI partners instead of booking and Expedia, because if they go direct, if they have a direct booking, they don't have to pay that 15 to 20 % commission to OTAs. So there's another, so it's, so the technology AI, chat GPT, whatever you're using, that actually works in, I guess, in favor of the actual hotel, the airline and all that type of stuff.

20:03Yes. So they now don't need the visibility per se on booking. Yeah, that sounds scary to me. So as I look at the year to date stock price performance, it's Expedia down 25%, Trip down 32%, Booking down 22%. Yes. The market's definitely telling you that they're concerned. Right. Is there a less bear case than that? Because, I mean, right now we're in an environment where people are throwing everything out the window, software related. Yes. Because you don't know where AI is going to go. Right. Here's an example where you can see it. Yes. And I think, I mean, we are definitely very early in these AI products.

20:39So even the Bookings product, we've seen examples. from Google and from ChachiBT, but they're not necessarily in a place yet where they're going to have a real impact on revenue, at least in maybe the next six to 12 months. And I do think we are seeing, you know, an uptick in the overall travel market. So U.S. travel has been improving. We have things like the Winter Olympics, the World Cup later this year, which are going to kind of boost travel. So I think there is kind of a case for at least short term growth. But there is, you know, I overhang still. So is Airbnb, are they seeing like World Cup stuff like I can rent out my New Jersey home for World Cup for the finals?

21:15Yeah, I think I mean, I do think the World Cup, especially for U.S. travel, will have a pretty significant impact. I think we're going to look at, you know, Expedia is probably the most exposed to the U.S. travel market. So if we keep seeing solid execution from them, we could have a next a strong couple of quarters. Stay with us. More from Bloomberg Intelligence coming up.

21:39You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. All right. One of my favorite groups on Facebook is the Amex Platinum Card Benefits and Offers group. It's a private group. It's got about 71 ,000 members, but everyone exchanges tips on how to get the most out of their Amex. Really? Yes. So you're one of those people that's really into it. I started to become really into it because I didn't like the refresh on the Chase Sapphire card.

22:14So I wanted to find out the other options. What's the refresh mean? They raise the rate, the annual fee, and then they like change the benefits. Okay. And so then you have to do a deep dive. See, I know that like my daughter and her friends, they are all into maximizing the points. Oh, so she knows. She travels all over the world and like, she's like Charlie Pellett, you know, doesn't pay for anything. Oh, Charlie Pella is like the master guy when it comes to these reward points. Okay, let's bring in Edward Najarian. He is a Bloomberg Intelligence Industry analyst who covers consumer finance. And his team has just written a report on the platinum card and the fee economics there.

22:49Edward, tell us a little bit more about what you learned. Because 2026 was the start of Amex rolling out its increased fee for the platinum card. and we're starting to get some understanding of what it might look like. Right. So, I mean, when they reported the quarter, great quarter, everything kind of in line with expectations or in some areas better, and gave great guidance in terms of mid-teens EPS growth for 2026. And, you know, a lot of conversation about the refresh and how great the refresh is going and acquiring, you know, lots of new customers. But generally, there were two things that sort of analysts picked on in the quarter when you're trading that sort of a high multiple for financial.

23:37And those two things were, number one, that the new card acquisition rate kind of went down a little bit relative to last year and relative to the third quarter. And additionally, all the money that they're spending on rewards and services and all of what they call variable customer engagement expenses went up a lot, a little too much in some people's opinions. So what we kind of learned recently was sort of some supporting data around two things. And the big thing was, while the number of new cards acquired went down a little bit, the fee per new card went up from 196 in the third quarter to 282.

24:19What? So huge jump. Now, why is that? That's because a lot of a much bigger percentage of those new cards came from new platinum customers, which is much better than just a regular customer. So even though a little less customers acquired, you're getting many more new platinum customers, much better economics. So that's sort of one thing. And then I talked a lot about how they're absorbing all of those extra reward costs, if you will. But still, that's fine because it's enhancing revenue growth. And sort of the revenue growth benefit of that offsets the reward cost more than offsets that reward cost.

25:00Okay, Edward, one thing that I've noticed from these Facebook groups is that people get a platinum card that's for the sign-up bonus and everything else. But then they start branching out and they get the gold card because there's more reward points for groceries there. They start to compile a lot of Amex cards. So a lot of the users have multiple cards, don't they? Yeah, no question about that. And obviously, you've got a lot of sort of families on the platinum card. So there's sort of a primary platinum card owner and then issuer of multiple cards related to that. So you sort of have this sort of network effect of the platinum card that just keeps building.