Airbnb vs Hotel Stays: Can Vacation Rentals Compete?

The recent pandemic might have slowed down travel, but it has helped Airbnb’s business model to set itself apart from the hotel industry. During this time, vacation rentals could leverage two of its major advantages over hotels — more space and privacy.

Though, there are a number of other unique selling points that Airbnb rentals have over hotels too. Plus, with some innovative thinking, even the advantages of hotels over vacation rentals can be addressed.

4 Main Advantages of Airbnbs

1. More affordable

Airbnb properties’ affordability is one of the main pros. Compared to traditional hotels, Airbnbs tend to be more budget-friendly, particularly for a large group or longer stays. As a matter of fact, when NerdWallet analyzed costs they found that the nightly rate for the average seven-night stay at an Airbnb was about a third cheaper.

One of the reasons why Airbnbs are especially cost-effective for travelers planning a longer stay is because the cleaning fee gets charged only once. It doesn’t matter if guests book the rental for only one night or a whole week, the cleaning fee remains the same.

2. Better privacy

Airbnb hosts that opt to list their entire place instead of just a private room have the added advantage of being able to offer guests better privacy compared to many hotels. To enjoy complete privacy, hotel guests need to stick to their small hotel rooms. On the other hand, vacation rentals can offer exclusive access to a dining room, living room, patio, etc. too. This makes them a great choice for intimate romantic getaways in particular.

Another way that rentals can offer travelers a more “intimate experience” is the fact that they offer them the unique opportunity to stay in local neighborhoods. This way, they can experience the city like a local, rather than being confined to a tourist-heavy area in popular destinations, where hotel chains are typically situated.

3. Access to a full kitchen

One potential advantage of Airbnbs is the ability to have access to a full kitchen. This can make it particularly appealing for those who have strict dietary restrictions, prefer to cook their own meals, or budget-conscious travelers who can’t afford to dine out morning, noon, and night.

A fully stocked kitchen is also an attractive option for a large group. A traditional hotel may offer limited options for dining or entertainment and it can be difficult to find an off-site restaurant that can accommodate a table of eight at short notice. Plus, compared to a home-cooked meal that can be enjoyed around a dining room table or outside overlooking a private garden, dining out can be a more sterile or generic experience.

4. More space

Not only does the average Airbnb offer more privacy and better kitchen facilities, but it’s usually also more spacious. Even having a whole apartment to yourself beats being confined to the four rooms of a hotel room.

To business travelers, this might be such an advantage. However, other travelers, like families traveling with young kids, will value a spare bedroom and possibly their own space outside where their kids can play freely.

4 Main Disadvantages of Airbnbs

1. Consistency can vary

One of the biggest concerns is the lack of consistency. While most Airbnb hosts go above and beyond to ensure a comfortable and clean stay for their guests, there’s always the risk of encountering a less-than-ideal rental. Plus, unlike most Airbnbs, hotels include daily housekeeping in their nightly fee. This can be particularly appealing to business travelers who want a hassle-free experience.

In addition to the concerns about cleanliness, short-term rentals are also less consistent than hotels (especially luxury resorts) in terms of amenities and customer service. While some rentals may offer luxurious amenities such as hot tubs or private pools, others may have more basic features, such as a shared bathroom or limited kitchen facilities. This can make it difficult for guests to know exactly what to expect from a rental before booking.

Also, traditional hotels typically offer 24-hour front desk assistance and room service. However, when booking a vacation rental, especially if it’s a remote location, there’s no guarantee that the host will be as responsive and available to assist with issues that may arise during the stay.

2. Lack of loyalty programs

Many travelers prioritize loyalty programs when choosing accommodation. Hotel chains typically offer long-established loyalty programs that can provide significant benefits such as free nights or upgrades. That being said, there’s nothing preventing Airbnb owners from starting their own loyalty program, offering discounts, or running promotions as they see fit.

3. Impact on community

One of the biggest concerns surrounding Airbnb is its impact on local communities. Some argue that the proliferation of Airbnbs can lead to a decrease in available housing for locals, as well as an increase in rental prices. Additionally, Airbnbs may contribute to over-tourism in certain areas, which can lead to overcrowding and strain on local resources.

Traditional hotels, on the other hand, typically have less of an impact on local communities. While hotels may contribute to over-tourism in certain areas, they typically don’t have the same effect on local housing markets as Airbnbs.

4. Strict regulations

While regulations typically don’t affect the guests’ Airbnb stay, they can make competing more challenging for Airbnb owners. Both Airbnb and traditional hotels are subject to regulations and legal considerations, however, depending on the location, Airbnbs may be subject to very strict regulations or outright bans.

3 Top Tips for Making Your Accommodation as Attractive as Hotel Stays

Both Airbnb and traditional hotels have their own advantages and disadvantages. There are a number of unique pros that Airbnb has over hotel stays and, with some innovative thinking, the drawbacks linked with this type of accommodation can be mitigated. Here are three top practical tips to help hosts optimize their listings and compete with hotel stays.

1. Highlight safety features for peace of mind

When traveling, safety and security are top priorities for many travelers. For Airbnb rentals, one of the biggest concerns is the potential for fraudulent listings or scams. While Airbnb has policies in place to prevent these issues, there is always the risk of encountering a fake or misleading listing. Additionally, short-term rentals may not have the same level of security measures as hotels, such as 24-hour security or staff on-site.

To quell potential guest concerns, highlight in your product listing the security systems, like keyless entry, that your property includes, the safety of the neighborhood, and insurance policies that you have in place. As for assuring them that your listing is really the real deal, make sure that you complete your Airbnb host profile section diligently.

2. Invest in amenities

Most hotels may offer more on-site amenities, such as a spa, restaurant, gym, or pool, which can provide a more luxurious guest experience. To remain competitive, it’s key that you also try to offer creature comforts, like laundry facilities, on top of the essentials. There might be more overhead costs involved, but it will help you to make extra money.

If you’re fortunate to have a property that offers a big kitchen and outdoor space, make sure that you use these to their full potential. Kitchens and gardens are two of the biggest features that a hotel room doesn’t offer.

3. Run promotional offers

You don’t need to design a multi-tier loyalty program. However, explore the idea of advertising discounts from time to time. To encourage returning guests, you can for example offer to waive the cleaning fees on their next vacation. Even a free breakfast on their last day can be an attractive incentive. How about simply reducing the nightly fee for their next trip?

Airbnb vs Hotel: What’s the Verdict?

There’s enough room for hotel rooms and short-term rentals

to compete side by side. Each offers unique pros and cons that appeal to different segments of the market.

For example, independent travelers won’t mind paying additional cleaning fees for the luxury to cook their own meals. While hotel rooms might be convenient for a business trip, with the right marketing and furnishing, an Airbnb property can also accommodate this type of stay.

Even an Airbnb apartment or private rooms in someone’s house that don’t offer as much space or privacy can compete with hotel stays. In this case, target your property at those looking to save money and you’ll also get your fair share of bookings.

Take your hosting to the next level with iGMS’s vacation rental management software. With it, you can:

• Manage multiple accounts and listings on the top OTAs from a single interface.
• Synchronize reservations across multiple platforms to eliminate double bookings.
• Organize messages into a single feed with a unified inbox.
• Improve communication with automated templates and triggered messaging.
• Create and coordinate cleaning tasks with live tracking to completion.
• Create your own direct booking website.
• Process payments securely via integration with Stripe.
• Create essential reports on your business results within minutes.