The Hidden Ceiling on Airbnb’s Growth (Your Business Has One Too)

Why the company is pivoting beyond stays, and what its invisible asymptote reveals about the future of travel.

Jun 04, 2025

A few weeks ago, I was surprised to hear Airbnb launched a new product called Services.1 Services is a way to book things like appointments with massage therapists, meals made by private chefs, and other service providers on demand. And not just in an Airbnb on vacation, but in your own home.

This got me thinking, why would Airbnb make such a strange pivot? Especially one that, in many ways, feels like a completely different business. I started to wonder if this pivot was the result of Airbnb uncovering an invisible asymptote2 (a hidden limit to its growth).

Services sounds like a quirky product for Airbnb. But it may be a strategic lifeline.

After years of explosive growth in major cities, Airbnb’s core markets are saturated. Regulations are tightening. Hosts are burning out. And growth is slowing.

This isn't just a new product. It’s a calculated pivot to break past an invisible asymptote acting as a barrier to future growth.

TL;DR
Airbnb’s explosive urban growth is slowing down.
A hidden ceiling—an invisible asymptote—is capping its expansion.
Instead of pushing outward, Airbnb is pivoting inward: launching services, reimagining experiences, and targeting rural and extended stays.
This isn't just a product update, it’s a full strategic shift.
The real question: What invisible asymptote is limiting your own business?

What Is an Invisible Asymptote (and Why It Matters)

The concept of an "invisible asymptote," coined by tech strategist Eugene Wei, refers to the hidden ceiling every product or company inevitably encounters in its growth trajectory. It's the point at which new user acquisition slows, retention plateaus, and revenue begins to level off. Not necessarily because the product is bad, but because in its current form it has run up against an unforeseen limit.

These ceilings are "invisible" because they often aren’t obvious until the data makes them undeniable. They can stem from trust issues, onboarding friction, pricing mismatches, or product constraints that users may not always be able to articulate but strongly feel.

Example: Amazon discovered through data that shipping speed was a key driver of conversion. Faster delivery = more purchases. So they built Prime and invested massively in logistics to shift their invisible asymptote upward. This wasn’t obvious at first, it emerged only after thoughtful experimentation and analysis.

Wei’s insight is that companies that recognize and address these asymptotes early are the ones that can break through them. They redesign the product, eliminate bottlenecks, or shift their value proposition entirely.

For Airbnb, that invisible asymptote may be urban supply. After years of rapid growth in major cities like New York, London, and Paris,3 the company is running into friction: supply constraints, regulatory pushback, and shifting user expectations.

Four Signs Airbnb’s Urban Growth Has Hit a Wall

Cities powered Airbnb’s early growth. But today, many of those markets are no longer fueling its expansion; they’re slowing it down.4 While Airbnb continues to grow globally, cracks are beginning to show in its most mature urban centers.5

Here are four signals that the company’s once-reliable growth engine is starting to stall.

1. Listings Outpacing Demand

Urban supply has continued to grow, but demand hasn’t kept up. In 2024, global listings rose by 15%,6 while bookings in many cities flattened.7 In these oversaturated markets, hosts now compete on pricing, add-on perks, and cleaning quality, signaling that there is too much supply chasing too little demand.8

Supporting this trend, Google Trends data shows that global search volume for “Airbnb” has plateaued since 2022, reinforcing the idea that consumer interest is no longer expanding at previous rates.

2. Declining Occupancy Rates

As supply rises in cities, the number of bookings per host is falling—a key warning sign of market saturation.9

Airbnb’s overall revenue growth has also slowed, with year-over-year increases decelerating to single digits in 2024—a marked contrast to the company’s earlier hypergrowth phase.

Data from platforms like AirDNA and Skift show that occupancy rates in key urban areas are either plateauing or falling. In some cases, revenue per listing is dropping, even as the total number of nights booked increases. More hosts, fewer bookings per host.10

3. Regulatory Clampdowns

Urban governments are increasingly pushing back. New York’s Local Law 1811 cut tens of thousands of short-term rentals from the platform in 2023.1213

Data displayed is for NYC. Source: Airbnb

Similar laws have been implemented or proposed in San Francisco,14 and European cities like Amsterdam and Barcelona.15 These measures reduce inventory, complicate operations, and push Airbnb into murkier legal waters.16

4. Host Fatigue

Hosts in saturated markets are frustrated by declining margins and rising guest expectations, including hotel-like amenities and cleanliness standards, even in budget listings.1718 Many are leaving the platform or shifting to medium-term rentals.1920 Airbnb has responded with incentives, but the underlying problem remains: too many hosts chasing too few guests.

Airbnb’s Pivot: From Places to Stay to Services That Stick

Airbnb is doing more than just doubling down on stays. It’s expanding the definition of what an Airbnb trip can be.

Airbnb Services (launched 2025) offers in-person bookings for chefs, trainers, stylists, and more. Unlike traditional upsells, these services aren't tied to a stay. Guests (or even locals) can book them independently, giving Airbnb new entry points into consumer travel budgets.

Airbnb Experiences, once a side product, is getting new life. Curated cultural activities, exclusive performances, and behind-the-scenes events now position Airbnb as a competitor to TripAdvisor, Viator, and GetYourGuide.

Rural and Extended Stays are also gaining attention. With urban markets saturated and highly regulated, Airbnb is emphasizing countryside getaways and longer bookings,21 both of which sidestep many urban friction points.

Why Airbnb’s Pivot Makes Strategic Sense

Why pivot? Because services solve problems that urban expansion no longer can.

Revenue per Guest: Airbnb can't add unlimited new listings in cities while maintaining strong occupancy rates, but it can increase how much each guest spends.
Differentiation: Services and experiences build brand moat22 beyond price or inventory.
Regulatory Evasion: It’s much harder for cities to regulate cooking classes or massage therapists than rental accommodations.
User Lock-In: The more moments during travel that Airbnb owns (booking, arrival, activities, meals), the harder it is to leave.

Airbnb’s Next Chapter and the Risk of Staying Still

Airbnb is no longer just a booking platform for rooms or houses; it's becoming a vertically integrated travel and lifestyle brand. One that sees experiences, services, and convenience as the next growth engine.

Is it risky? Absolutely. Services are operationally complex, and quality control is harder. Airbnb even had to pause its Experiences product in 2023 for unclear reasons.23 But refocusing Experiences while incorporating Services may be Airbnb's best shot at pushing past its invisible ceiling.

Because when you can't grow outward, the only option is to grow deeper.

What’s Your Invisible Asymptote?

Airbnb’s story is a compelling reminder for founders, operators, and strategists alike: every business has a growth ceiling. The most dangerous ones are the ones you can’t even see yet.

Are you starting to feel friction: slower signups, stagnant revenue, lower engagement? You could be approaching your own invisible asymptote.

The key is to get curious, not complacent. Study user behavior. Revisit assumptions. Identify where friction accumulates or growth flattens.