The Airbnb bust that never materialized how rising rates is actually helping the company's bottom line.

It's all about interest income.

It's Wednesday November 1st. Welcome to the Tech Check Podcast.

I'm Deerejibosa.

And I'm Mark Gilbert.

Today, Airbnb reports earnings after the bell.

The company finding itself at another inflection point with rising interest rates challenging the core of its business

in one way, but D actually helping it in another.

Yeah, so let's set the stakes first and we'll pull back. Here's what's really happened over the last few years. You've got a housing market very much in limbo, higher interest rates, that's making it more expensive to finance short-term rental properties for the hosts, right, which is, you know, the key part of this whole business.

You've got lower occupancy rates and popular vacation spots as well as major

Airbnb markets like Phoenix and Austin, and then of course the return to work

post-pandemic. What you saw over the pandemic was a sort of new kind of business line

for the company they had longer stays. So all of these factors, it was supposed to be a

perfect storm that was going to hit the business model, right?

Allah, Airbnb, bust. It really

in a significant way though, Gilbert. We're now almost at the end of 2023,

and while the stock hasn't performed particularly well

in the second half, I mean, it has not been any kind of disaster for the financials of this

company. Right and that's that's the gloom side and in fact when you look at the financials of the business

it's actually out earning a lot of its peers.

And the company, this is key, is generating more free cash flow than ever.

We've talked about this in the past, how in a rising interest rate environment you want that free cash flow.

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