Why More Travelers Are Choosing Hotels Over Airbnb as Price Differences Narrow
As Airbnb initially disrupted the travel industry with its unique lodging experiences, it quickly became a go-to option for those looking to immerse themselves in local culture. From cozy cabins to quirky city apartments, travelers were enticed by the appeal of staying in a home-like setting at a fraction of the cost of a traditional hotel. But as the years have gone by, many users are beginning to question the platform’s value, with some opting to return to more conventional hotel accommodations.
For travelers like Maureen McCartney, a long-time Airbnb user, the allure of the platform has begun to fade. McCartney, who has been booking Airbnbs for over eight years, recently found herself leaning toward hotels after several disappointing experiences. One incident during her visit to Seattle involved a rented basement suite that looked appealing online but resembled something out of a horror movie in real life. “It was damp down there. And they still had, like, the tools sitting there, like the circular saw, with jagged edges on the wall,” she recalls.
McCartney’s story is not an isolated case. A quick search on Reddit reveals numerous threads from disgruntled Airbnb users questioning the platform’s current value. Complaints such as “Is Airbnb even worth it anymore?” and “This is the downfall of Airbnb” echo similar frustrations, many of which stem from the additional responsibilities imposed on guests—responsibilities that one wouldn’t expect during a hotel stay. In some cases, guests are asked to take out the trash, sort recyclables, or even clean the property, despite already paying cleaning fees. “The whole purpose of a vacation is not having to do these chores,” McCartney points out.
While these inconveniences may have been tolerable when Airbnbs were significantly cheaper than hotels, travelers are finding that the cost gap between short-term rentals (STRs) and traditional hotels is rapidly closing. Once, Airbnbs could be booked for as little as a third of the cost of a comparable hotel room, but that is no longer the case. According to AirDNA, a data analytics company specializing in short-term rental pricing, the average daily rate for Canadian hotels in 2024 was only about 20% higher than one-bedroom STRs, a decrease from 25% in 2019.
Several factors have contributed to this shift. During the pandemic, hotels saw significant price drops as they sought to lure back customers after travel restrictions were eased. Short-term rentals, however, did not experience the same dip, as many travelers opted for the safety and seclusion of private properties while working remotely. Post-pandemic, the hospitality landscape rebounded sharply, with hotels bouncing back stronger than ever due to a surge in business travel.
On the other hand, Airbnbs, like other sectors, have seen their operational costs rise sharply. Increases in utilities, insurance, and interest rates have driven up nightly rates for many short-term rental hosts, making Airbnbs more expensive for guests. As of August 2024, the average daily rate for short-term rentals in Canada was $261.47 before fees—a staggering 47% increase from 2019. These price hikes, coupled with additional cleaning and service fees, have caused many travelers to rethink their loyalty to the platform.
Moreover, hotels are evolving to compete with the Airbnb model. Chains such as Hilton and Marriott have expanded their “extended stay” brands—Homewood Suites and Residence Inn respectively—offering suites with multiple bedrooms, kitchens, and living spaces. These options cater to families and larger groups who may have previously preferred the space and convenience of an Airbnb. Some hotels are even stepping outside the box, providing unique, boutique experiences akin to those traditionally found in Airbnbs. For instance, Hotel Zed, a chain in British Columbia, boasts a bike path that runs through its lobby and a retro disco room filled with multiple disco balls and a lit dance floor.
Mandy Farmer, owner of Hotel Zed, says her aim was to counter the monotony of traditional hotel stays. Inspired by her own Airbnb experiences, she created family rooms that offer spacious living areas and kitchens to accommodate larger groups, providing a homier feel than standard hotel rooms.
These shifts reflect broader trends in the travel industry, where the once-clear divide between Airbnbs and hotels is becoming increasingly blurred. While Airbnbs have traditionally offered more space and amenities for group travelers, hotels are now catching up by providing similar features, often at competitive prices. At the same time, government regulations on short-term rentals are tightening in many cities, limiting Airbnb’s growth and driving hotel prices even higher as demand increases.
Airbnb, for its part, maintains that it continues to offer travelers a wider range of accommodations, often in places where hotels are scarce. In a statement, the company said it allows people to “explore many more places, and often more affordably, than hotels” and highlighted that nearly half of its Canadian listings are located in areas without traditional hotels. The company also pointed to new government regulations on short-term rentals as a major factor behind rising hotel prices and shrinking accommodation supplies.
Despite Airbnb’s defense, it’s clear that the platform has lost some of its initial charm for travelers like McCartney, who believes that Airbnb’s rapid growth may have done more harm than good for communities. She argues that the short-term rental model disrupts local housing markets by reducing the number of permanent residents and harming small, local businesses that rely on stable communities. “Airbnb just sucks the life out of a community,” she says, adding that scaling back Airbnb’s influence may lead to healthier, more vibrant neighborhoods.
As the travel industry continues to evolve, it appears that hotels are reclaiming their place as the more convenient and reliable option for many travelers. For those who once sought out Airbnb for its affordability and unique experiences, the question now is: are they willing to continue paying higher prices for what may no longer be a superior experience?
Source: Swifteradio.com
