Risk, returns & timeframes illustration
5 min read
September 12, 2023
by
Belinda Nash

Airbnb stock jumped 11% this September... why?

From NYC to Paris and plenty of places in between, Airbnb’s been battling for their place in the short term rental market. But cities are saying otherwise. In a global cost of living crisis, residents are being squeezed out of rental properties and now the Big Apple’s regulators are coming in hard. So why's Airbnb's stock soaring?
5 min read
September 12, 2023
by
Belinda Nash

Airbnb stock jumped 11% this September... why?

From NYC to Paris and plenty of places in between, Airbnb’s been battling for their place in the short term rental market. But cities are saying otherwise. In a global cost of living crisis, residents are being squeezed out of rental properties and now the Big Apple’s regulators are coming in hard. So why's Airbnb's stock soaring?
5 min read
September 12, 2023
by
Belinda Nash

Airbnb stock jumped 11% this September... why?

From NYC to Paris and plenty of places in between, Airbnb’s been battling for their place in the short term rental market. But cities are saying otherwise. In a global cost of living crisis, residents are being squeezed out of rental properties and now the Big Apple’s regulators are coming in hard. So why's Airbnb's stock soaring?
Table of contents
Getting Started Investing course
Free Getting Started Course
Take your first, or next, step to becoming a confident investor with Hatch's free online course – just 10 minutes a day, for 10 days.
The Fry up logo with fried egg
Weekly news from Wall St
Subscribe to The Fry Up - your weekly sizzle of headline-grabbing share market news. Read by 60,000 Kiwis to help them take charge of their investing journey.

Airbnb’s cleared the goal posts, again! 🏉 In February this year, Airbnb (ABNB) had their largest one-day stock jump, up 13%, and now they’ve done it again. On Friday 1 September, Airbnb shares closed at US$132.70. When the Nasdaq opened the following Tuesday after US Labor Day, boosted by extended trading, their stock opened at US$144.02, a jump of 8.5%. Since then, it’s crept up another 2.3% - making a total stock jump of 11% this month.

So why are investors buying in? Airbnb released better than expected Q2 results, then got the call up to the S&P 500 kuputohu or index, and is off the subs bench, joining ‘private equity behemoth’ Blackstone (BX). The late players are replacing Newell Rubbermaid (NWL) and Lincoln National (LNC), who’ve taken early showers. 🚿

This means many tahua or exchange-traded funds (ETFs) and hāngū or passive investment funds that track the S&P 500 Index will now need to buy Airbnb shares. And some hohe or active fund managers who are benchmarked against the S&P 500 may also choose to add Airbnb to their shopping list.

The news booted Airbnb’s year-to-date stock up 73.5%. This is more than double the Nasdaq Composite Index, which is up 33% so far this year. Airbnb is slowly regaining ground lost during the global pandemic, and as travel certainty has slowly returned, their stock is up 18% since the same time last year. But Airbnb still faces challenges.

From NYC to Paris, Airbnb, hosts and economy travellers battle a conveyor belt of woes

Is Airbnb facing their biggest game yet? Last week NYC regulators kicked off their clamp down on short term rentals in a law that came into effect in March this year. ⚖️

Enforceable rules include:

  • Hosts must be present during guest stays
  • Both guests and hosts must have unlockable access between all the rooms
  • No more than two guests can stay at one time  
  • Hosts must tell NYC officials who else lives at the property

The city’s regulations impact hosts using Airbnb - as well as with VRBO owned by Expedia (EXPE), and Booking.com owned by Booking Holdings (BKNG) (also owners of Kayak and Agoda) - with all property-holders required to register with the city if they are renting accommodation for less than 30 days. This, despite Airbnb flexing their litigious muscles on what they’ve labelled a ‘de facto ban’ on their sharing economy services. 

However, as of last week, a mere 3,250 hosts of the total estimated 15,000 to 38,500 Airbnb NYC listings have actually registered - and only  257 approved - with the remaining thousands of hosts potentially facing fines of up to US$5,000

While New York City accounts for only around 1% of Airbnb’s 2022 revenue - that’s US$85 million, according to Airbnb - other cities aiming to free up rental whare and homes for residents could be sounding alarm bells for the California company. 

  • Barcelona was the first European city to ban all short-term private rentals
  • Rental caps and strict regulations already exist in some cities including New Orleans, London, and Rugby World Cup hosts, Paris
  • Also joining them, last Friday, might be Florence, which announced a plan to ban short stay rentals 🚫

Why the Airbnb pile on? A report found that in New York, for ‘every 1% increase in Airbnb listings, neighbourhood rents rose 1.6%’. Some of the need for regulation may also be due to the lucrative passive income practice of Airbnb arbitrage. This is where people take long term rental leases on multiple properties, paying for them by charging high short term rental fees on Airbnb and pocketing the rest - some people making up to US$150,000 a year. Ka-ching!

Is a Kiwi-founded start-up joining the fray?

Meet capital-raising ‘hopefulKiki, a subletting platform eyeing up the NYC market. 🏙️ Kiki was created by University of Auckland business graduate Toby Thomas-Smith, and adopts a ‘circular economy’ model by matching students and professionals with vacant rental properties to provide accommodation for one to six months. The venture was successful in Australia - formerly known as EasyRent - and helped fill temporary accommodation needs when properties were vacant. Kia kaha e hoa mā! 🙌

Belinda Nash
Finance writer
Linkedin

We’re not financial advisors and Hatch news is for your information only. However dazzling our writing, none of it is a recommendation to invest in any of the companies or funds mentioned. If you want support before making any investment decisions, consider seeking financial advice from a licensed provider. We’ve done our best to ensure all information is current when we pushed ‘publish’ on this article. And of course, with investing, your money isn’t guaranteed to grow and there’s always a risk you might lose money.

Join the Kiwis who are hatching their tomorrow and have invested more than $1 billion with Hatch.

Explore another series
Tax
Money
Economy
Investing

More recent news articles

Recent learn articles

7 min read
Apr 16, 2024

Geopolitical pressures wobble big bank’s outlook

Big banks have kicked off quarterly earnings season in the US markets, but JPMorgan CEO Jamie Dimon’s sobering shareholder letter sent the bank stocks tumbling sector-wide last week. But there is still investor optimism in the global financial powerhouses, with stock soars in the past six months that even rival some Big Tech.
Read more
8 min read
Apr 9, 2024

Disney survived a hostile takeover, what have we learned?

Disney beat Nelson Peltz in his battle for boardroom control, ending years of struggles that kicked off during Covid. Retired CEO Bob Iger returned to bring the legacy entertainer back from big losses, but he can’t stay forever. So what happened behind closed doors during the failed hostile takeover?
Read more
7 min read
Apr 3, 2024

Could AI steal your doctor’s job?

Using AI in healthcare may save billions of dollars and save lives. Researchers are developing AI treatments for everything, from cancer and infertility, to schizophrenia and Alzheimer’s. AI language models may even be helping to create new proteins. And Big Tech is all in.
Read more

Related news articles

More recent learn articles

No items found.

Recent news articles

More recent learn articles

7 min read
Apr 16, 2024

Geopolitical pressures wobble big bank’s outlook

Big banks have kicked off quarterly earnings season in the US markets, but JPMorgan CEO Jamie Dimon’s sobering shareholder letter sent the bank stocks tumbling sector-wide last week. But there is still investor optimism in the global financial powerhouses, with stock soars in the past six months that even rival some Big Tech.
Read more
8 min read
Apr 9, 2024

Disney survived a hostile takeover, what have we learned?

Disney beat Nelson Peltz in his battle for boardroom control, ending years of struggles that kicked off during Covid. Retired CEO Bob Iger returned to bring the legacy entertainer back from big losses, but he can’t stay forever. So what happened behind closed doors during the failed hostile takeover?
Read more
7 min read
Apr 3, 2024

Could AI steal your doctor’s job?

Using AI in healthcare may save billions of dollars and save lives. Researchers are developing AI treatments for everything, from cancer and infertility, to schizophrenia and Alzheimer’s. AI language models may even be helping to create new proteins. And Big Tech is all in.
Read more