Airbnb's ongoing battle with hotels for travelers has taken a noticeable turn

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Hello there! The iPhone 16 isn't even out yet, but we're already hearing rumors about the iPhone 17 lineup. Apple is reportedly working on an "Air" model that has gotten the Ozempic treatment and slimmed down considerably .

In today's big story, Airbnb said its struggles are tied to consumers spending less, but it's also because they're opting for hotels instead .

What's on deck:

• Markets: Inside a massive hedge fund's bid to keep a pipeline of strong talent .
• Tech: An excerpt from Nate Silver's new book examining prolific risk-takers .
• Business: Elon Musk and Donald Trump sat down for a rambling conversation on X .

But first, let's just book a hotel.

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The big story

Plenty of vacancy

Airbnb took a noticeable step back in its ongoing battle with hotels.

The short-term rental giant's stock is down almost 13% after lowering its third-quarter revenue projections and acknowledging it's seeing signs of slowing demand from US guests during last week's earnings call.

Execs quickly pointed to an economy that's seen consumers pull back on their spending habits. But Airbnb's struggles are also a product of travelers opting for hotels instead , writes Business Insider's Dan Latu.

That's quite a change from just a few years ago when Airbnb was booming as people looked to escape cities for extra space and fresh air. But the intervening years haven't always been kind to Airbnb.

A laundry list of chores and rules coupled with high cleaning fees sullied the experience for some . Bait-and-switch scams were another concern . But even if you were willing to look past all that, you might not even be able to book an Airbnb as an increasing number of cities have banned the platform .

The Airbnb-to-hotel conversion has been taking place for a while. But lowering its projections for a third quarter — a time when consumers are known to travel — felt like a turning point.

Airbnb isn't alone in facing a bit of a reckoning.

Apps that relied on low prices to grow fast and build loyalty have been forced to adjust their business model. The death of the so-called millennial lifestyle subsidy — for which Airbnb was a key player — resulted in consumers rethinking things.

So yes, customers have pulled back on spending in a way that has impacted Airbnb. But it's also a result of how Airbnb runs its business as opposed to just wider economic forces.

Still, weakening consumer spending is a lot easier to point to than acknowledging the competitor might be eating your lunch. A tough economy can be useful for businesses in that way, like how companies were able to raise prices on the premise of inflation going up.

And if you can't beat them, join them.

Airbnb signaled it might look to its rival for some inspiration. The company's chief business officer told Bloomberg it's looking at offering luxury services for guests in a bid to win hotel converts back.

News brief

Top headlines

• Trump claims he faced 'unacceptable intrusion' over FBI Mar-a-Lago raid in notice to sue the DOJ for $100 million .
• A US Navy carrier strike group equipped with F-35 stealth fighters is rushing to the Middle East along with a submarine packed with Tomahawk missiles .
• There's a 40% chance the US economy is already in a recession, according to a new indicator .
• The US housing market is on the verge of hitting a record $50 trillion valuation as prices keep rising .
• Felicis Ventures leads $10 million round in AI startup MemGPT at a $70 million valuation, sources say.

3 things in markets

1. Bank of America isn't worried about all the spending on AI. The bank said concerns about the heavy investment into the tech are "premature." Traditionally, tech expenditures are front-loaded and don't always rely on creating new revenue streams , BofA analysts wrote.
2. How a $48 billion hedge fund tried to flip the script on Wall Street's war for talent. Viking Global has gotten more aggressive when it comes to hiring analysts in a bid to keep its pipeline strong and promote from within . Viking's PMs are also partially compensated based on their analysts' career development.
3. A simmering conflict in the Middle East has oil prices on the rise. WTI crude oil and Brent crude prices spiked ahead of a potential attack by Iran against Israel .

3 things in tech

1. Investors <3 crazy tech founders. In his new book, "On the Edge: The Art of Risking Everything," Nate Silver writes that some founders have an unusual advantage: a chip on their shoulder. Coming from a background that's made them feel left out, excluded, or estranged can make them extremely competitive — a trait VCs are willing to bet on.
2. Don't worry about upgrading to Apple's new iPhone 16. Bloomberg reported the new iPhone won't be much different from the iPhone 15 (which wasn't much different from the iPhone 14). The new models will have Apple Intelligence, but with some early reviews saying it's not worth the hype , some customers may be happy sticking with their older cell phones.
3. AI has a big marketing problem. Advertisers love talking about AI. The problem? Consumers don't like hearing about it . Experts say that in order to effectively advertise for artificial intelligence, firms must focus on enhancing human creativity rather than replacing it.

3 things in business

1. Canceling pesky subscriptions could get easier. Trying to get out of a gym membership or cancel a subscription can be a painstaking endeavor, but the White House just announced a proposal to make it a little easier . The new rule would make it as easy to cancel a subscription as it was to sign up for one.
2. Three cofounders of the Alexander brothers' brokerage firm are jumping ship. The owners are leaving the firm, Official, after recent rape accusations against its star brokers Tal and Oren Alexander . Their departures follow unfruitful negotiations to remove the brothers from the business by having them relinquish their ownership stakes.
3. Musk gave Trump 1 million listeners. Trump gave his greatest hits. Elon Musk's live-streamed conversation with former President Donald Trump on X began with technical difficulties — reminiscent of when Musk interviewed Florida Gov. Ron DeSantis on the site last year. Over the course of Monday's conversation, the pair discussed Trump's assassination attempt, a potential role for Musk in a second Trump administration, and more .

In other news

• An M&A expert says creator-economy companies need to look beyond influencers to grow .
• She grew up in Ukraine, studied accounting, and joined the army. But since Russia invaded, she did a hard career pivot — twice .
• Disney World is entering its villain era .
• I've been to over 200 high-end golf courses around the globe. Here are eight mistakes I always see first-timers make .
• Consulting has a Gen Z problem .
• Six things you could be doing wrong if you're struggling to get a job .

What's happening today

• The Home Depot and other companies are reporting earnings.
• "Made by Google" event to launch Google's latest devices, including the Pixel smartphone.

The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, senior editor, in London.