They would never have guessed that renting an air mattress out to strangers would pave the way for what would eventually become a multi-billion-dollar business, but that is exactly what happened to the young men who created Airbnb (Air Mattress Bed and Breakfast). For a while, this revolutionary idea had many hotels questioning their own future, but is Airbnb still cheaper than hotels?
The average price of an Airbnb is close to or more than the average price of a hotel room in many areas. However, it is usually possible to find a shared rental for much less than a hotel.
Continue reading to learn more about Airbnb, how it works, and whether you should choose an Airbnb over a hotel room during your next vacation.
What Is Airbnb?
It all started in San Francisco when in 2007, two young roommates were struggling to pay rent. At the time, many hotels were booked, and to earn some extra dough, the pair decided to turn their loft into a makeshift bed-and-breakfast. After having some success, the duo became a trio who quickly realized that there was a market for this type of business. It would help travelers save a few dollars while also helping those short on cash to make some money—it was a win/win situation.
Although it took some time and effort to pitch the idea, it eventually caught traction and quickly became the hotel business’s biggest fear. It was cheaper than a hotel room, and because hosts wanted to make a good impression, people often found their stay at an Airbnb to be much nicer than a hotel would have been.
Today, Airbnb is a billion-dollar business, with some valuations putting it at a staggering 113 billion. There are currently 5.6 million active listings on their website in over 100,000 cities worldwide. However, with its rising popularity came a rise in prices, as people snatched up houses simply to turn them into rental properties that would earn them more as an Airbnb than a yearly rental.
This, in turn, caused a shift in the number of apartments available to residents, and many people have questioned whether Airbnb ever genuinely cared about the philosophy it built its brand upon.
How Does Airbnb Work?
Although the process is a bit more complicated for hosts, Airbnb is quite simple to use. Because it is an online marketplace, everything can be done on your laptop or phone. While the process may vary slightly, making a booking is typically as simple as following the steps below.
- Head over to Airbnb.com and create an account. You can browse listings without going through the setup process, but if you want to make a booking, you will have to have an account.
- Upload the required documents and complete the verification process. You will need some form of ID and a phone number.
- Take advantage of the website’s extensive search filters to browse available listings for the dates that you plan to travel. The basic search will ask for your desired location, expected travel dates, and the number of guests you will have. You can further filter the results by price, amenities, booking options, and even the language of the host (which can be helpful when traveling abroad).
- Locate listings that you are interested in and read the reviews. This part is important if you want to avoid problems such as dirty rooms, shabby accommodations, and mean hosts.
- Once you have narrowed down your listings, you can start the booking process. Because Airbnb gives its hosts a multitude of options, this process may be different for each listing. Some hosts will allow people to book instantly, while others may want to vet their guests before accepting. It is often helpful to include a brief note describing who you are, how many guests are expected, and a brief description of your travel plans.
- Once the host accepts (or if they allow instant bookings), you can pay for your reservation. There are multiple ways that this can be done, and some hosts will allow payment plans for longer bookings.
- Once payment is made, you will receive an email confirmation that will include the address and other essential information about your booking.
- Enjoy your stay!
Why People Prefer Airbnb Over Hotels
In 2016, Dr. Daniel Guttentag released a dissertation study that examined specifically why people were motivated to choose Airbnb over a hotel. Through his research, he found that the most common motivations were:
- Low Cost
- Convenience
- Household Amenities
- Space
- Authentic Local Experience
- Less Touristy Atmosphere
- The Experience and Novelty
- Agreeable Philosophy
- To Help Local Economies
- Interaction with Hosts
The top answer was “low cost,” and 26% of respondents admitted that these savings enticed them to extend their vacation. Another common reason was space, with entire homes offering better accommodation than a single room.
Being able to rent a fully stocked house was also alluring to people who were planning longer stays because of the access to amenities such as laundry machines, stoves, and large refrigerators. Finally, philosophy was a big reason, with many respondents claiming that they liked what Airbnb stood for and would prefer to give their money to someone who needs it rather than to a big business chain.
Is Airbnb Better Than Hotels?
Both Airbnb and hotels have advantages and disadvantages, and which one is best for you will depend entirely on your travel needs. Understanding the pros and cons of each decision is important if you want to make the best choice for you and your family.
Airbnb Advantages
- It can sometimes be cheaper to stay at an Airbnb.
- You can rent larger homes, allowing multiple people to split the cost.
- Hosts will sometimes allow people with extended stays to make a payment plan and pay in installments.
- You get a more authentic local experience.
- Hotels are not as private.
- The check-in and check-out times are more flexible than those of a hotel.
- You may have access to amenities that you would not have access to in a hotel. For example, some listings have pools, hot tubs, ovens, washing machines, and much more.
- You are supporting the local economy instead of making hotel tycoons richer.
- If you are a people person, you might enjoy the interaction with the host.
- You can meet new people in a shared setting.
- Large families can have a more natural visit with one another.
- Many hosts will go the extra mile to boost their satisfaction ratings and increase their future reservations. For example, some will stock the kitchen with groceries, while others leave gift baskets for their guests. Some hosts specialize in honeymoon bookings and go out of their way to make sure their newlywed guests have a romantic getaway.
- Most listings will include activities to keep children entertained, while hotels can often be boring for children.
- Some hosts will allow pets and even supply amenities for them.
- You may be able to negotiate the price of a reservation, especially if it is off-season or the host is desperate for guests.
- You can read honest reviews from other guests, while some hotels will bluff their reviews or offer discounts in exchange for a complimentary review.
- The listings on Airbnb are diverse, and you can find almost any type of accommodation you want.
Airbnb Disadvantages
- You may have to meet the owner to get the keys or do a walkthrough of the home to verify its condition.
- Listings can sometimes be misleading, and what you end up with is not at all what you expected.
- You may get an uninterested host who is either unreachable or who will not go the extra mile for guests.
- You could get stuck with added fees that are hard to defend. For example, some hosts will add a “cleaning fee” even if you cleaned up after yourself. Additionally, they could claim you damaged their property, and it would be their word against yours.
- Hosts can cancel at any time, including the day you are scheduled to arrive.
- It can be difficult to cancel or change reservations as a guest, and you may not get a refund for your cancellation.
- Bad hosts can make your stay miserable, especially if you are renting a room within their residence.
- Hosts will sometimes offer access to amenities and then restrict access once you have arrived. For example, they may not allow you to turn on the air conditioner or use the kitchen after a certain time.
- Even though hosts go through an extensive application process, dangerous people might still squeak through.
Hotel Advantages
- You can check-in without having to meet the owner at a specific location or do a walkthrough of the room.
- You know what to expect from a hotel room and can typically avoid any unwanted surprises.
- Most hotels offer services such as continental breakfasts, free wi-fi, or room service. Additionally, they can offer advice as to the best places to eat and explore in the area.
- Hotels can sometimes be less expensive in bigger cities.
- Hotels almost never cancel their reservations, and if they do double book, they will often go out of their way to make other arrangements for you.
- Although policies differ at each hotel, most hotels will allow you to cancel a booking (if it is in advance) without penalty and are flexible if you need to alter your reservation.
- Staying at a large hotel, with a lot of other people, is often safer than staying in a stranger’s home.
Hotel Disadvantages
- There is a lack of diversity since most hotel rooms are all the same.
- Hotels might not offer the same amenities as Airbnb.
- Not all hotels are great. Some are dirty and found in shady parts of town.
- You might not be able to find an available room if there is an event in town.
- Since most hotels will not allow you to check-in before 3 PM and require you to check out before 10-11 AM, you only have the room for around 19 hours—not a full day.
- Hotel amenities, such as the pool, often close in the evening, while you can use the pool at an Airbnb anytime you want.
- Hotels are often not as private as Airbnb.
- Rooms are small and do not accommodate large families very well.
- If you are staying for a longer period, you may find yourself without proper storage space for personal items or food.
- A lack of ways to prepare food means you will have to eat out more.
Is Airbnb Still Cheaper Than Hotels In 2022?
One of the only reasons that Airbnb became the business that it is today is because they were able to provide quality accommodations at a fraction of what hotels were charging. However, as the business grew, so did greed, and several people have noted that Airbnb is not as cheap as it once was. This begs the question, is Airbnb still the cheaper choice?
To gain a better understanding, we compared the prices of current Airbnb listings to the prices of both expensive and inexpensive hotels in the most popular travel destinations in the world. This is what we found.
We compared prices for a three-day weekend stay from May 13th to May 15th for two adults with no children. Rates may vary depending on the dates, season, and size of your party. The prices listed below reflect the nightly cost and not the cost of the entire stay.
| Destination | Average Airbnb Price Per Night | Average Hotel Price Per Night |
| Dubia, United Arab Emirates | $176 | $197 |
| London, England | $194 | $206 |
| Cancun, Mexico | $64 | $66 |
| Crete, Greece | $86 | $130 |
| Rome, Italy | $177 | $80 |
| Paris, France | $302 | $160 |
| Istanbul, Turkey | $70 | $177 |
| Mallorca, Spain | $249 | $155 |
| Natal, Brazil | $48 | $122 |
| Arusha, Tanzania | $72 | $111 |
| Dublin, Ireland | $288 | $176 |
| Melbourne, Australia | $252 | $149 |
| Amsterdam, Netherlands | $272 | $190 |
| Miami, United States | $300 | $164 |
| Las Vegas, United States | $561 | $225 |
| Madrid, Spain | $245 | $144 |
| Chicago, United States | $197 | $221 |
| Bangor, United States | $198 | $147 |
| Garland, United States | $218 | $79 |
Although there are some places where Airbnbs are much cheaper than hotel rooms, the average price of an Airbnb is either very close to, or more than, the price of an average hotel room in most areas. However, it is typically possible to find a shared Airbnb for less than the price of a hotel.
Conclusion
Although Airbnb has historically been the cheaper alternative, its rising costs have placed many of its rentals in the same price range as an average hotel room. This is especially true in the United States. However, while there is a bit more risk involved with an Airbnb reservation, they offer amenities that many hotels do not.
Additionally, if you are willing to rent a room in an occupied home or share a rental, you can almost always find an Airbnb for less than a cheap hotel room. Ultimately, you’ll have to weigh the pros and cons of both and decide which one is better suited to you and your family’s needs.
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