One of Airbnb’s main selling points may be a myth. While many of the company’s customers consider Airbnb to be a cheaper alternative to hotels, it turns out that hotels are often the less expensive option. While there are other factors that might make Airbnb worth choosing over more traditional accommodations, choosing Airbnb might not save you money.
Most people choose Airbnb to save money
Airbnb is widely known as a better alternative to hotels. While different Airbnb customers would probably give you different reasons as to why they choose Airbnb, the most common response you’d probably hear is that it is less expensive.
Last year, Bank of America released a study that suggested that the top reason people choose Airbnb over hotels is that it’s cheaper. The location of the Airbnb was listed as a distant second, with 33% of participants listing location as an important factor compared to the 55% of participants who listed the cheaper price.
The study also suggested that, for most customers, Airbnb is an alternative to hotels. That is, Airbnb is a replacement for hotels rather than a bed and breakfasts, staying with friends or family, vacation rentals, etc. It seems safe to conclude, then, that most Airbnb customers believe that choosing Airbnb over hotels saves them money. Unfortunately, it’s not that simple.
Choosing Airbnb can be more expensive
While Airbnb accommodations can certainly be cheaper than hotels, they won’t always save you money. In fact, depending on where you’re staying, Airbnb is often more expensive.
The aforementioned Bank of America study revealed that, on average, Airbnb is more expensive in the United States. It showed a 30% markup in the top 25 cities in the US and a substantial 60% markup across the country. That equates to $120 per night for a hotel compared to $195 per night for an Airbnb. It’s also worth mentioning that the study only accounted for Airbnb accommodations which were comparable to a hotel room (e.g. excluding unconventional listings and full houses).
The story is similar all over the world, though often less extreme than in the US. Hotel data group STR Global reported that, in Sydney, Australia, Airbnb saves customers $1 over hotels on average. It’s cheaper, but probably not the type of savings many Airbnb advocates are expecting.
In other cities around the world, Airbnb prices range from vastly cheaper than hotels to wildly more expensive. So, the decision of whether to choose Airbnb isn’t always as simple as picking the lower daily rate. It’s a question of value.
When to choose Airbnb
Many Airbnb customers love the service because it provides better value than traditional accommodations. Even if an Airbnb is more expensive than a hotel room, it can still be more valuable.
Airbnb rentals often include amenities that you usually can’t get with a hotel room. Many of them have kitchens, a highly desirable benefit that adds a lot of value for many people. They also often come with a local host who can make great recommendations for food and activities. If you care more about value than price, then you can probably find an Airbnb that works for you.
If, instead, you strictly want to save money, then it comes down to location. In most places, you will likely be able to find a relatively cheap Airbnb. In some locations, cheap Airbnb rentals will be as good as or better in value than hotels. It all comes down to your particular circumstance. Just be aware that choosing Airbnb won’t automatically save you money.
Airbnb describes itself as a service that “connects people to unique travel experiences, at any price point.” It doesn’t sell itself as a discount alternative, and it shouldn’t be viewed that way. Before choosing Airbnb over a hotel, make sure that it provides better value.