By Keith Brophy, Senior Director of Hospitality Customer Success at Milestone Inc. LinkedIn
Since its introduction back in 2008, Airbnb has been marketed as an alternative to hotels, adding a new facet to the travel industry. However, as the business model has grown beyond the initial excitement, it has begun to show some cracks as customers recognize the benefits they lose compared to staying in a hotel. Those preparing to take a vacation should carefully consider the hospitality options available to make the best decision for their situation.
We will explore what the data shows about these two options for travel accommodations and why hotels consistently show themselves to be better options for travelers.
Diving into the Airbnb and hotel sectors
Both the hotel industry and Airbnb have shown impressive growth rates. The startup saw a compound growth rate of 153% from 2009 to 2019, including an increase in bookings of 55% in 2021.
The hotel industry is more established, so it does not see as dramatic numbers. However, it is expected to have a 7.99% growth rate between 2022 and 2026. The growth of these two types of businesses fits with the overall growth of the travel industry, which is projected to see an 8.46% growth rate between 2022 and 2026.
The average occupancy rates in the two types of businesses also differ, which could have implications for the growth of the two business models in the future. Hotels had an occupancy rate of 67% in August 2022, and maintained an occupancy rate over 60% since March 2022. However, Airbnbs have an average occupancy rate of just 48%.
As people compare Airbnb and more traditional hotels, they also often consider price rates. When looking at short stays, hotels generally come out on top of Airbnb, which will have higher prices when you factor in the cleaning fees and other charges. For longer stays, the Airbnb might be cheaper because the fees are often a flat rate regardless of the length of stay.
Pricing also depends on the number of people. For travelers venturing out solo or with just one other person, hotels come in an average of 29% cheaper. If you have a group of 6, however, assuming 3 hotel rooms are needed, the Airbnb is an average of 33% cheaper.
If we break down the differences between hotels and Airbnb based on customer satisfaction and surveys, we can also find some interesting trends. The satisfaction rating for both Airbnb stays and hotels is nearly equal— 4.3 versus 4.2. However, more than half of customers (53%) expressed concerns about privacy when staying in Airbnbs.
These customer concerns bring us to the differences between staying in people’s private homes and staying in commercially run hotels.
Breaking down the differences between Airbnbs and hotels
To begin, the core difference between Airbnb and hotels is that Airbnb properties are owned by all different private homeowners. This means there are fewer regulations when it comes to standards of care and responsibilities. For example, there have been recent cases of people complaining about owners leaving them lists of responsibilities and rules before they could check out.
On the other hand, hotels are businesses. This means they have a greater duty to maintain and repair their premises. Airbnbs under many local laws have no duty to complete improvements unless the damage creates a clearly dangerous situation.
What are the benefits of a hotel over an Airbnb?
For those looking for a place to stay on an upcoming trip, there are a number of reasons why hotels might make the best fit.
Cleanliness and option to change rooms
Hotels get professionally cleaned, including the use of commercial-grade laundry facilities and commercial-grade products used throughout the room. You do not have to wonder about the state of the room when you arrive. If there is a problem with your room, you can also request a change, which is not an option with an Airbnb.
Privacy and modern security technology
Airbnbs can put you in a room in a shared house with other guests or even the owners themselves. This means you get little privacy and have to share spaces like the kitchen and outdoor space. Airbnb keys are usually physical or codes, and guests cannot be certain how often the codes are being changed.
Hotels use digital keys and app-based keys, which provide better security and peace of mind for guests.
Amenities for improving your stay
Hotels generally have a variety of on-premise amenities and activities, such as restaurants, spas, pools, gyms, and even golf courses. Many also offer meeting spaces for all different types of gatherings and events. Hotels can scale up to handle your larger groups.
Shuttles for added convenience
Hotels often offer shuttle service for customers to get them to popular tourist destinations as well as airports for return trips. This service makes it much easier to get around without worrying about paying for rideshares or renting a car. If you are staying in a residential area with an Airbnb, it can be very hard to get around without access to your own car.
Access to hotel security, maintenance, and front desk support
If you have a question or a problem with your room, hotels are staffed around the clock with people ready to help you make it right. Hotels have more security on the premises to help protect travelers. None of that is available at an Airbnb. If a guest encounters a problem, such as a tub that won’t drain, they have to hope the owner will be responsive and get it fixed quickly. Hotels often have bell hops to help unload and load your luggage.
Small conveniences add up
Many travelers also quickly discover that small conveniences found in hotels can add up. The bathroom will always have personal-size shampoo, conditioner, and soap. Airbnbs often do provide shampoo and conditioner, but the quality is wildly inconsistent. The front desk also can often help with your commonly forgotten toiletries, such as a toothbrush. The hotel’s business center is often useful, especially for last-minute printing.
A welcoming surrounding area
As Airbnbs have become more popular, they have also bred frustration in the neighborhoods where they are set up. Neighbors often complain about parties, temporary residents, parking issues, and the other frustrations that come with someone running a business in a residential area. Hotels are zoned as businesses and that can make the guest experience much smoother.
Well-designed and updated interiors
Many Airbnbs feature out-of-date designs, fixtures, and appliances. However, hotels have been designed by professionals and feature regular design updates, repairs, and investments to improve the property.
Loyalty programs and perqs
Many hotels also have programs that reward their loyal customers. When people return to the same brand, they can earn loyalty rewards that can then be redeemed for popular bonuses or free nights. Those who travel frequently pass up that advantage in an Airbnb.
Helping quests choose accommodations when planning a trip
When Airbnb first began, it seemed like an excellent way for homeowners to offer their spare accommodations to tourists coming to their area so they can make some money while the tourists get a ‘home-like’ experience for less than a hotel. Now, however, the benefits of going with professional businesses and taking advantage of all that hotels have to offer have become more clear. Not only has Airbnb lost its price advantage for many travelers, but the experience and benefits of staying in a hotel outweigh those of other options.
How can hotels market their benefits vs Airbnb?
Hotel campaigns should emphasize the benefits above and consistency of experience in all channels. Call out the amenities, like loyalty benefits, parking, concierge, shuttle service, on-site restaurants, on-premise concierge, and your high standards of cleaning. Add these details to FAQs on the site and include them in your outbound email campaigns.
Contact our expert hotel team at [email protected] or call us at 408-200-2211 to learn more about Milestone’s hotel solutions.