Why is Airbnb losing popularity to hotels?

Online platforms offering short-term tourist rentals, such as Airbnb or Vrbo, are losing popularity among travelers. One of the reasons: the reduction in the price gap between a hotel room and a short-term rental.

According to AirDNA, a company that analyzes prices in the short-term tourist rental sector, the average daily rate for hotels in Canada in 2024 was approximately 20% higher than that of short-term tourist rentals with one bedroom. In 2019, the price difference was around 25%.

The COVID-19, partly responsible

Hotels saw their biggest price declines in 2021 and 2022 as COVID-19 restrictions eased, notes Jamie Lane, AirDNA’s chief economist.

For their part, the prices of short-term tourist rentals have not varied much, since during the pandemic, many people rented this type of accommodation for “traceance” (contraction of the words work et vacation ).

At the time, people wanted the security of a private space, which Airbnb was able to guarantee, notably by offering entire homessays Makarand Mody, associate professor of hospitality marketing at Boston University.

After the pandemic, when travel, particularly internationally, resumed, we saw an increase in demand in the hotel sector, continues the professor. People visibly seemed to want to catch up retard.

The increase in this demand is largely explained by the fact that business travelers mainly use hotels and rarely short-term tourist rentals.

They are also more expensive to operate today due to rising prices for utilities, insurance and interest rates.

For the fiscal year ending August 2024, the average daily rate (before fees and taxes) for all short-term rental listings in Canada was $261.47, almost 47% more expensive than in 2019.

Dynamic prices pointed out

Recently, short-term tourist rental hosts are using dynamic pricing, like hotels or ride-sharing apps such as Uber.

According to AirDNA, for the six evenings when American singer Taylor Swift will be performing in Toronto in November, the average rate for short-term rentals is $320 per day, an increase of 57% compared to the same period last year.

When Airbnb was much cheaper, it seemed logical to ignore the inconvenience to save money. But, for the same price… customer service is better and faster in a hoteladds Professor Mody.

An entire apartment for the price of a hotel room?

Some tourist rental hosts offer an entire apartment or house, making them a better choice for larger groups. Others offer a unique stay, like a yurt or treehouse.

In a statement sent to CBC NewsAirbnb claims that it allows travelers to explore many more places and often at a more affordable price than hotelsby proposing more than 8 million ads worldwide and in more than 100,000 cities and towns.

The company goes on to say that nearly half of Airbnb listings in Canada are in places where there are no hotels.

In its statement, Airbnb also attacks new government regulations on short-term rentals, saying they lead to unfortunate but predictable consequencesas rising hotel prices and a limited overall supply of accommodation.

A new hotel experience

Thus, some hotels are increasingly taking inspiration from the example of Airbnb, by offering more space and facilities for larger groups.

Hilton and Marriott have expanded their offerings extended stay (respectively Homewood Suites et Residence Inn), offering one- and two-bedroom suites with kitchens and separate living areas.

Other hotels offer anything but standard experiences.

For example, one of the three Hotel Zed establishments in British Columbia has a bicycle path in the lobby, a space to consult local psychics, and even a mini-disco .

Owner Mandy Farmer says she was inspired by her personal experiences on the Airbnb platform. We had the idea of ​​building family rooms that are not just for a family of four and have huge living rooms and large kitchens. As a result, we have a more family-friendly experience and we can bring together more people to enjoy it.she explains.

No more complaints and disappointments

Furthermore, a simple web search reveals a considerable number of complaints about short-term tourist rental sites, such as Airbnb and Vrbo. In the majority of cases, guests complain about being asked to clean their accommodation after their stay, even if they pay a cleaning fee; which is not the case in a hotel.

Take out the trash, recycling and compost, as if you were at home. The point of vacation is precisely not to have to do this kind of thing.laments Maureen McCartney, who has been using Airbnb for about eight years.

If she assures that cost savings was her main criterion for doing business with online rental platforms, she now admits to turning more towards hotels after having had some bad experiences.

The suite I rented was damp and looked nothing like the photos I had seen online. Tools were lying around, including a circular saw, with the jagged edges leaning against the wallraconte M. McCartney.

Based on a text by Jonathan Ore, CBC