Why a Popular Travel App like Airbnb Got Smashed in the Stock Market?

Apps like Airbnb have transformed the way people travel, book accommodations, and discover new experiences. It’s more than just a travel app. It’s a marketplace that has reshaped the global hospitality industry and influenced how platforms connect people with places to stay and activities to enjoy. However, even large companies like Airbnb are not immune to market volatility.

In December 2020, Airbnb went public with a strong debut. Its shares opened at $146, far above the initial IPO price of $68. However, by mid-2021, the stock started to decline and eventually dropped to around $113, raising concerns among investors about its high valuation and long-term profitability.

To put this into perspective, stock prices reflect investors’ perceptions of a company’s future potential. A higher share price typically indicates confidence in long-term growth. In Airbnb’s case, concerns surrounding its valuation, ongoing losses, and a fragile travel industry at that time led to early market skepticism.

Fast forward to mid-2025, and analysts have an average price target of $141–$147, predicting Airbnb’s stock to recover earnings and stabilize around $141.50. Meanwhile, the global travel industry is bouncing back. According to Phocuswright, the travel market is forecast to grow 6–10% annually through 2026, with online bookings expected to make up 65% of total travel bookings by 2026.

So, what caused Airbnb’s stock to crash after such a strong start? And what lessons does it hold for startups, investors, and entrepreneurs planning to launch a travel app like Airbnb?

Let’s take a closer look.

The Big News

According to NASDAQ, the company had a good IPO (Initial Public Offering) in the first week of December. The share prices were 50-60 US dollars even before the shares were offered for trading. After the first day of the public offering, the price rose to double the value. But the routine of success broke down when the price fell dramatically.

The event of Airbnb’s IPO was held on Wall Street, which included many huge investment banks. One firm named Gordon Hasket, did not come to the event. On being asked by streetInsider.com, they said that the company is underperforming and they don’t feel right to invest in it.

The analysts said that the stock price of the company is three times higher than that of rival travel services such as Booking Holdings and Expedia. Although the analyst said that Airbnb’s rapid growth deserves a premium. They still consider this high 300 times plus premium as excessive and call today’s downgrade a “tactical valuation-driven downgrade,” which will be soothed in the future. 

Now Gordon Haskett expects the Airbnb share to get to $103 a share as opposed to its current valuation, which is around 128 US Dollars. In today’s time, Airbnb has recorded more than $1 billion in losses, and analysts predict it to continue for at least a year or two due to excess negative cash flow. Therefore, the company is expected to face a crisis in the coming times.

But there is hope it will bounce back because of its amazing functionality. Let us learn how this travel app works.

Read More: Build an App-Like Airbnb: A Comprehensive Guide!

Functional Model of Travel App Airbnb

Airbnb is an online marketplace that is also a travel app that connects travelers with local hosts. The localities of the area list their place for rent and earn. Also, it gives a chance to the travelers to interact with local people. The app was found on 1st August 2018 and is currently functional in 190 countries. 

Just like you book a taxi from a taxi booking app, customers can book their place of living. The app has 3 participants or users over the app to function. As follows-

1. Hosts

• Hosts are the people who list out their properties for rent.
• They can list their property with the pricing, facilities, and check-in and check-out details.
• The host has the power to accept or reject requests of travelers based on profile review.

2. Travelers

• Travelers who book a place that is listed by localities.
• They have options to browse, search, and filter based on rent, prices, facilities, locations, etc.
• The payment could be done online through payment gateways.

3. Freelance Photographers

• The photographers can also use this travel app. They could be hired to take pictures of these properties.
• The high-quality photographs get more responses, and they are directly paid for by Airbnb.

These three users sign up on their respective panels, and the admin panel of the app controls the overall functionality.

Revenue Model of Travel App

The travel app Airbnb allows property owners to list their properties for free over the app. The condition is that booking and monetary transactions are done through the medium of this travel app. The company majorly earns in two different ways.

• Commission from Property Owners (Hosts)

Airbnb charges a flat 10% commission from the hosts who have listed their property. Once the booking is done, 10% of the total value of rent charges are transferred to the app’s account as a part of the commission.

• Transaction fee from Travellers (Guests)

Similarly, like the host is charged commission. The travel app charges only 3% as the booking and transaction commission from the travelers of the total amount they have given for booking.

Also Read: Smart AI Trip Planner App Development for Market Domination

Conclusion

Airbnb faced its share of challenges after its IPO, especially during the COVID-19 downturn in 2020–2021. But by 2025, the company has regained momentum—thanks to the global rebound in tourism and its pivot toward flexible stays, long-term rentals, and curated experiences.

For entrepreneurs and investors, the takeaway is clear: building a travel app like Airbnb still holds massive potential. With the travel app market projected to surpass $1.2 trillion by 2027, the demand for digital-first, personalized, and trusted platforms is only growing.

If you’re thinking about launching an Airbnb clone, now is the time. Whether you’re targeting short-term stays, niche travel experiences, or even local rentals, creating a platform with the right technology stack and user-first features can give you a competitive edge.

At Apptunix, we specialize in building high-performance, scalable travel apps and marketplace platforms. Our Airbnb-like app solutions come with fully customizable features like multi-host listings, real-time booking, in-app payments, ratings & reviews, and smart search powered by AI.