Global platform operator for rental rooms Airbnb (ABNB:NASDAQ) has seen its shares slide by a fifth over the last three months taking the loss in 2022 to date to more than 40%.

The worry is that the rapid rise in the cost of living will squeeze consumer discretionary spending and dampen demand.

With the average cost of an Airbnb overnight stay shooting up by 40% since 2019 there are concerns the service will no longer be seen as affordable.

In response, the company has been on a push to increase supply in the most popular cities. CEO Brian Chesky told the Financial Times it has also seen a ‘dramatic’ spike in cleaning fees which are added to customers’ bills.

With cleaning charges up 50% in urban areas the company is considering launching a marketplace to encourage more competition and reduce prices.

In contrast to the fall in the shares analysts’ earnings estimates for 2022 have risen almost by almost 200% to $1.71 billion since January.

This means the price to earnings ratio has collapsed from 191 times in 2021 to the current 36.8 times.

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