Yossi Mekelberg, a professor of international relations at Regent's University London, and an associate fellow at Chatham House, told CNBC that while the listings may raise political fervor, legal issues could pose the larger problem for Airbnb.
He said the worst case scenario would be that someone ends up in physical danger after unintentionally making a booking in a mislabeled settlement in illegally occupied territory.
"Others may say 'you put us under risk'," he said.
In any case, Mekelberg said controversies like this could be damaging to any commercial business.
"We follow laws and regulations on where we can do business and investigate concerns raised about specific listings," Airbnb told CNBC in an email.
"We also encourage guests to communicate with their host about their listing long before a trip begins. Discrimination has no place on our platform and we investigate any claims we receive."
Airbnb did not clarify whether any listings have since been removed or changed.