Is An Airbnb A Better Deal Than Booking A Hotel Room?

In the not-too-distant past, it seemed like Airbnb reigned supreme over all of our vacation bookings. However, increased fees, crackdowns on rental use, and property owner abuses have left some wondering if Airbnb is still their best option. While many might have moved back to traditional hotels for their bookings before the pandemic, inflation and rising prices in our post-pandemic economy have complicated the issue of which option is better all over again.

The housing crisis across parts of the country has not helped Airbnb's cause, and increasing amounts of investors and corporate property management companies purchasing homes for the sole purpose of creating Airbnb rentals have actually forced some cities (and the entire country of Singapore) to pass legislation limiting Airbnb usage. A lack of regulation and consistency and higher prices than a few years ago have changed how many consumers view Airbnb. Unfortunately, what started as a great way to share parts of your home with new people for supplemental income has instead been increasingly transforming into a purely money-making scheme that can leave consumers frustrated. 

However, even with these negatives, Airbnb still maintains perks and freedoms that are not offered by hotels which can make it an attractive option for travelers. Perhaps most important of all, while prices can and do vary depending on the city or area you're looking to stay, in general, Airbnb is still the cheaper option.

The benefits of Airbnb

Airbnb is able to undercut hotel prices due to a lack of overhead costs. Since there is no staffing or management required for a property (not including property owners or companies who use cleaning staff and booking agents), prices can be kept lower. Plus, while most hotels will maintain pricing that fits market demands (and profit margins), individual hosts are free to charge what they choose, which offers more competitive offerings. Plus, a huge perk of Airbnb is the variety of spaces available, ranging from single rooms to entire homes. This can make bookings for larger groups easier and significantly cheaper than hotel alternatives. Single guests and couples, however, might be better off at a hotel depending on the details of their stay.

Another thing to consider is your length of stay. Airbnb is significantly more affordable for longer stays. In fact, a seven-night Airbnb stay resulted in a 32% cheaper nightly rate than a one-night stay. Many Airbnb hosts even offer perks or discounts for extended stays. Plus, since Airbnb's infamous cleaning fees can be extreme (34% of cleaning fees amounted to 20-30% of guests' nightly rates) it's important to remember that cleaning fees are only applied once, so a longer stay diffuses this cleaning fee up across more nights which can make a longer stay more affordable. Also, while most hotels charge exorbitant nightly pet fees and have weight and size restrictions, Airbnb generally offers more variety in pet policies across properties.

Why are people staying at hotels?

While the hotel industry is still not back to pre-pandemic levels, it was anticipated to hit $1.2 trillion in 2023. Some of the largest players in the hospitality market are familiar names like Marriott, Sands Las Vegas, and Hilton, which operate globally and offer name recognition in addition to certain quality expectations across brands. This name recognition and consistency of service can be appealing to travelers who might not want to risk the possibility of issues with their stay. Also, unlike how Airbnb operates, hotels do not serve as middlemen between guests and a property, which can be helpful if a dispute should arise. Having staff on-property can make a huge difference to your stay, with a 2021 study of over 125,000 Twitter complaints finding that 72.2% of Airbnb guest complaints were related to customer service (with specific complaints ranging from limited support in emergencies to policies favoring hosts over guests). 

Since most hotels have dedicated staff, cleaning fees are not generally added to a booking the way they are with Airbnb rentals (resort fees however, are increasingly prevalent at hotels). Plus, as the housing crisis continues and the topic of affordable housing gains more traction, legislation restricting Airbnb (and short-term rentals in general) will only continue to be put forward in additional geographic markets. This will increasingly make certain cities or even entire countries unavailable for Airbnb stays or with extremely restricted options, which will make hotels the only options in those areas.