Airbnb vs. Hotels: A Price Comparison
priceonomics.com
priceonomics.com
I love the AirBnB idea and the implementation. There is a dark side however. Hotel organizations have historically been unable to change quickly, and operate on pretty thin margins. So the existence of a significant quantity of AirBnB rentals in a market does the equivalent of the Federal Reserve 'stress test' on weak banks, except it isn't simulated.
I am really on the fence about what that means. On the one hand it means a number of hotel properties will come on the market at distressed properties, on the other it means there will be a huge gap between really cheap motels and really high end hotels.
One thought was to buy up a mid-range hotel property and convert it into "Tech Suites" where for each pair of rooms connected by a door, one side stayed a hotel room and the other side became a small office. My local Sunnyvale city supervisor isn't completely against the idea but they are dubious about a mixed living/commercial zone at the scale of a motel/small hotel.
Well, the street became a hotel parking lot. The house became a place to throw a party for forty out-of-town guests, and the neighborhood residents...well at $500 a night why should a renter give a fuck about them?
The couple hooking up on the down-low, well they sent the brats outside during morning nookie time. The kids entertained themselves by throwing rocks at the neighbor's car in her driveway. The three families staying for a youth baseball tournament - their kids swung from Jimmy's backboard until the rim popped out. The six guys attending their reunion sat on the hoods of their cars till the wee hours drinking beer and tossing the empties.
The business model shifts the costs of hotel use unto surrounding properties. Next week, however, our absentee landlord gets their day in court to explain their violations of the zoning regulations. Hopefully the threat of jailtime will make an impression.
These are the kinds of things the supervisors in Sunnyvale wonder about in terms of "What happens when ..." and it sounds like some case law might be available (ideally in California but you don't mention where this is)
The way things went down was that the owner bought the house at the low point in the housing market and had it as a traditional rental - as a college town we have a fairly stable rental market. Last summer, (according to the neighbors nearby), the stable renter was booted and the house started being rented for game days and other weekends. Around New Years, we had dinner with some of the people more impacted - I live diagonally across an intervening block.
My neighbors were bothered by it, but didn't know enough about zoning regulations to know that the use was flat out illegal. The closest neighbor felt constrained by norms of neighborliness despite the fact that the owner did not live there and was running a hotel. However, zoning regulations are something I have dealt with regularly for many years.
A couple of months ago, I had a bit of a close call while walking the dog as one of the transients returned from Taco-Bell in their Expedition. It was then that I realized that the renters were as complicit in the activity as the Owner...so I spoke to the renters as they parked and advised them that their activity was a violation of zoning and unwanted by the neighbors. Hmmm...that's probably better than trying to change the Owner's ethics, and I can be as much of an asshole as the next man when I wish.
The next Saturday morning I was walking my dog as that week's renters arrived. I spoke with them about the same subject. Turns out one of the renters was a swinging dick lawyer from upstate. He figured to run me down the road by threatening to call the police.
And that's when it hit me, what could be better evidence of the activity than a police report with the renter explaining their agreement with the Owner? I told him calling the police was a capitol idea, and advised him of the address when he could not tell the dispatcher where he was. Sure, it cost me forty-five minutes with our City's finest, but it didn't leave the City Manager any more excuses for ignoring the problem.
So Zoning eventually got around to sending the Owner a letter, despite which we continued to get transients - the economic considerations didn't change and Zoning enforcement trying to be nice was taken as a sign of weakness.
It took a bit more followup (complaints), and the genteel neighbor realizing that the Owner didn't intend to reciprocate the neighborly behavior.
So the hearing is in municipal court next week and several of we neighbors are available to testify about the activity.
Mischief would only reinforce the property owner's conviction that it was ok to externalize the costs upon the neighborhood - though that doesn't mean I didn't think devious thoughts. It just turned out that once I stopped pretending that the renters were ignorant of the illegality, events began to resolve of their own accord.
Besides, I have no interest in spending time in jail. That is a world of suck.
Is this a serious comment? I guess it's one of the reasons I'm grateful not to live in the United States. The fact people in your area might turn to using deadly force to address noise complaints and misbehaved kids completely blows my mind.
Was my comment serious? yes. Were people seriously considering shooting someone? Of course not - they were expressing their frustration with the overall situation. Had they been inclined to shoot someone when annoyed, they would have done it long before the now.
However, the truth of it is, there is no reason to believe that a transient lodger isn't going to roll into the neighborhood at 2am armed and drunk and starting trouble. That's the volatility in the mix, and why the AirBnB model poses problems in residential districts not structured to accommodate them. And that's the worry that my neighbors, and I, have.
A few calls to the cops to report unruly behavior, and a letter or two to the homeowner may have been enough to get the homeowner to be more vigilant in controlling the tenants, or would encourage a return to longer term tenants.
Jimmy's father built the goal at the end of the driveway when Jimmy was about 8. It is a thing of beauty - Ryan was a craftsman. Three summers ago he drove Jimmy and his teammates to the AAU Nationals. The next Thanksgiving he was diagnosed with liver cancer. 15 months later he died. When, I heard how the damage had been done and that the property owner had promised to get it fixed, but hadn't, that's when it was clear the owner didn't give fuck about the neighborhood or the people affected by their business.
It's simple economics. Two weekends a month gets the owner past breakeven, and the third and fourth are mostly profit. The values systems between the property owner and the neighborhood residents are incommensurate.
In the end, all it took was for two assholes to collide and agree that calling the police was the best solution. Well that and hitting the city manager and elected officials over the head with email.
http://www.sfbg.com/politics/2013/03/28/airbnbs-tax-and-tena...
http://www.wnyc.org/shows/newtechcity/blogs/new-tech-city-bl...
AirBnB is great if you're white, able-bodied, and have no expectation of quality (or even an expectation of a safe, habitable environment), but just Google around for issues of racial discrimination with hosts and AirBnB's complete lack of support for disabled people.
These are all issues that have been through the legal system for close to 100 years, yet now we celebrate when we throw out our progressive ideals for something as petty as cash savings?
The "tech suites" idea is great. Maybe you could even turn some of them into something like a "startup dorm", which would fit nicely into an incubator/VC setting.
As a middle-market customer, I really hate it when this happens. Most notably, airlines. The air travel market for the flights I make is pretty strongly segregated between $400 fares and $4000 fares, and you get what you pay for.
However, your average Airbnb apartment and the average hotel room are nothing alike. Most of the Airbnb's I've used are far closer to what I'd expect in a suite at a moderately nice hotel. If you compare that, the price of two diverges immensely.
Just recently I spent three days on a 60 ft barge on the Seine in Paris opposite the Louvre. There is really no comparison to even a high-end hotel there (and I've stayed in several in Paris), but it was maybe 30% of the cost of a comparable experience I'd find for that location and living space size.
I could be an abnormality in my usage of Airbnb. I actually pay about what I'd expect to for a standard hotel room. I just expect what I'd get in a suite minus room service.
I think that AirBnB operates very differently at different price points. Once you're paying more than $x, you're right- you basically get whole apartments. And below $x you're paying less than you could ever expect for a hotel room. But in the middle is this awkward area where you're paying a relatively decent amount to stay in someone's spare room, and have to deal with the extra complications that brings but without the larger benefits.
This was a little more expensive than normal (but we had company staying in the other two small cabins so and really utilized the deck on top since Pont des Arts is one of the best views of the sunset in Paris and it is docked right there) and I happen to love boats. If you don't like a little gentle rocking, it may not be for you.
I recently booked a stay in Prague which seemed positive, with quite a large number of positive reviews. Normally with all my other airbnb stays, I contact the host many days before and organise a way to check in and a time. This has worked out well, we simply meet at a specified time, talk and get given the keys and shown around the place. Back to the story in Prague, I contact the host 4 days prior to check in and receive no reply for those 4 days. The listing on the website becomes 'disabled' and the last calendar activity of the host is 6 weeks ago. There are then reports saying that previous tenants where 'bumped' to a different apartment as there was a problem with the listed apartment. This raises alarm bells to me and the last thing I want to do is arrive in a foreign country and be left stranded. Which is exactly what happened. I contacted AirBNB a day prior to the event detailing the 'fishiness' via online medium and have only received automated replies.
Luckily our host in a previous city had a friend who could arrange us a stay at short notice. Don't get me wrong, people are people and there are fantastic people out there.
So really the price difference is a multitude of services, and how much you will risk being stranded or mislead.
I've never used AirBnB and have no real plans to. However, I have traveled around Europe extensively, and some of the best times were when I simply arrived somewhere and then attempted to find accommodation.
I rode my motorcycle from London to Spain, toured for two weeks and never booked a single hotel in advance (my GPS packed it in on the second day too, so I played with paper maps). Only once was the first hotel I entered unable to find me a room.
I traveled around Sicily on public transport, mostly buses, a few trains and ferries. Again, I never booked accommodation in advance, always found somewhere and was never stranded.
I was left stranded as the check in time was 'organise with host', no specified time and the apartment location was a broad area. I had neither a time nor a place to check into, that's how I was stranded.
I had organised a Plan 'B' knowing this may happen so I didn't spend the night on the street.
I contacted AirBnb via their website a day before this event and still am yet to receive a reply from their customer support.
I think you're arguing my point any way, it's harder to be stranded from a hotel, either they will find you a room or they will point you somewhere else who can.
Special needs, traveling with others, just plain tired after a long trip, middle of the night, better amenities, better accommodations, hotels are booked full, maybe some of those available hotels/hostels are super shady and I don't want to be among strangers there. As much as I love the idea of being able to travel freely, I also like the assurance that I know where I'm sleeping at the end of any given day.
I've stayed in NYC and in smaller markets in AirBnB places I selected for cost. Why pay $200+ when I can stay for $80 in someone's private room?
Well, you get what you pay for, and when you pay less then a local hotel the things you miss are the things that hotel charges you for: cleanliness, privacy, and respect for your time.
While reviews/recommendations are supposed to be a filter for quality, they're really something of an echo chamber on AirBnB. If you leave a host a negative review, they may do the same for you, and fear of being publicly labeled an undesirable guest is enough to keep most travelers mute.
That said, once you start paying something roughly comparable to a hotel rate in a given city, they likelihood of you having a better experience increases. These are hosts who are basically running a side business and treat you like a customer. For better or worse, they charge you more to treat you better. I think it's the higher end AirBnB market that hotels should fear.
Edit: good points from those who responded below. For the sake of comparison these cleaning fees do matter and weren't accounted for.
True, but when you browse by price they are not. I think this is the point the OP is trying to make.
They are asking if the post got prices from a final confirmation, including cleaning fees, or if they got their prices form scraping the data on their website, which wouldn't include the cleaning fees.
if its the latter then I've seen cleaning fees of $50 per stay which can close the gap considerably if your only staying for 1 or 2 nights.
Every time I've used it there's been 24-72 hours of back and forth with a host before I even know whether I can reserve their place. Often I lose a day waiting to hear from a host only to find out their calendar wasn't up to date and it's not actually available.
Hotels are more expensive, but booking one is trivially easy. That convenience is worth a lot to me.
With hotels, at least you generally get what you pay for, and you can rely on branding (brand names and star ratings) to get you most of the way there as well. So while I hope to use airbnb again, I'm quite chastened by the experience and am definitely more aware of the things I used to take for granted with booking hotels.
Airbnb folks: this drags your product down to the level of VRBO, Flipkey, etc., where spotty availability calendars creates a large disincentive to use the service.
If a decent hotel room is ~$80 then I wouldn't even think of using AirBNB and I doubt I'm alone. I have no idea why hotels in other countries are so damn expensive.
The cool thing in places like Japan is that you actually have a choice whereas in places like NYC, you have far less. For that reason I dread visiting the states anytime I don't have a friend I can stay with or something.
The U.S., especially, could really do with a big shakeup of its dysfunctional hotel culture. And its dysfunctional transportation culture. And ... well you get the idea...
Regarding my apparently plentiful options, can you point me to a business hotel near Tokyo Station which has rooms for four people at a price that's a "bit" more than the standard under-Y10k business hotel cubicle? Go ahead, I'm waiting.
And Airbnb seems to be doing a pretty good job of shaking up that dysfunctional hotel culture...
Lonely Planet or not, that is very hard to believe. I know anecdotes != data but this is so different from my normal experience that I just can't accept it. I do not think I have ever been on a plane where 30% of pax are vacationing families. Business travel outweighs vacations 10 to 1, or it feels like it.
Anyway, of course you're not going to get a family-sized suite for 1万円 at a proper hotel. You wouldn't get an apartment, either. I am not sure what you are expecting here. A four-person suite is going to cost way more no matter how you cut it. And if you claim four-person suites make up 30% of hotel bookings, then you are hallucinating.
I hadn't really perceived that AirBNB was evolving into a short-term apartment rental system, but if that works for you, great! My point was simply that, since I don't have all these dependents, I would never think of using it in a country with good business hotels.
I don't think I have either, but I have been on flights where 95+% where vacationing families, so I wouldn't be surprised if it balances out. Most routes are either business focused or vacation focused, so depending on what routes you travel you probably won't be sharing your flight with many from the other group.
But there's always a gamble with "collaborative consumption," so it's not the end of the world. And I've been very satisfied with other AirBnB experiences.
In that order.
The counter argument here is that AirBnB does not make a place a hotel but what we see all the time is direct comparisons between hotels and AirBnB.
Because of this requirement I had to cancel my nice apartment reservation in Boston only to stay in a far more expensive hotel. But at least they didn't keep a picture of my passport on file.
My personal AirBnB stays have been pretty varied. When I stayed in SF in 2008 it was awesome, because I ended up staying with a friend of the founders and then in the actual AirBnB corporate apartment and meeting one of the AirBnB guys.
When I stayed in Japan, it was amazing -- the spare couch of a Thai expat living in Tokyo, who then introduced me to her friends, and we went out to do stuff a few times. An long-term expat from a culture I understood (Thailand) is an even better introduction to Japan than a Japanese national.
But then I stayed in a few other places in Asia where it was a "regular low-end hotel or apartment rental" who relisted on AirBnB. I generally don't stay in hotels like that otherwise, and in comparison to 5 star luxury hotels, it was pretty weak, and IMO for 50% of the price, not worth it.
I actually really like the "large high-end luxury hotel experience" -- being able to arrive at 3am to a fully staffed front desk, having 24h room service, knowing reliably exactly what the place will be like in advance, etc. And, if you have some third-party-paid stays and optimize for frequent stay points, the cost can be pretty reasonable (e.g. 10 x $60/night normal stays redeemed for 2 free $1000/night NYC NYE stays).
I tried to use AirBnB for Hawaii, but couldn't find enough listings at the time; ended up using another similar service (VRBO?) and discovered some terrifying people.
I'll try AirBnB more in markets where it's strong, and probably higher-end properties than I tried in the past, but I don't think it will destroy hotels.
I'm sure the experiences can be hit or miss, but I'm definitely hooked.
Priceonomics has the data - it's easy to compute either the standard deviation or (low, average, high). Same space, more information/context!
We tried to keep the visualizations simple because this was our first post using d3.js. Will think about adding an option to show errorbars next time around though. Thanks for the feedback.
Here are the two pages that I think explain them best:
We did our research - found hotels willing to give us a discount for a month's stay, looked at other apartment rental agencies etc. but AirBnB was far and away the cheapest option for what we were after.
The apartment was fantastic, exactly as described and in the condition shown in the photos. It was clean, the owner was extremely helpful during the planning and booking stages and met us at the apartment (at 11pm on Christmas night, no less) when we arrived in Paris. She provided cleaning at no extra charge - we arranged with the cleaner directly, who arrived half an hour before we left for the airport.
Frankly, I couldn't fault the service. AirBnB staff were great (we had a billing issue early on that they resolved in minutes), the host was great, the apartment was great and the whole process was easy.
Obviously there are trade-offs when staying in an apartment rather than a hotel, but from my experience they're more than worth it to save a significant amount of money.
I had to be 5 days (4 nights) in La-Defense[1] near Paris for an hacking marathon along with my co-founder who lives right there.
AirBNB was my default choice, and I manged to spot a nice (according to the pictures) small apartment in that area, with WiFi etc.
I booked, and thought all is well. Later on, say, 12 or 24 hours or so, I get a message that the owner has rejected me (no reason specified).
I switch to Hotels, and managed to find a much better suite, in a far nicer environment for a little cheaper than that apartment, I think it was via booking.com.
I don't think I will ever check this options again, as for me, the possibility of being rejected later on, with no reason, while flights and meetings are already booked, means a risk, I would not dare take.
of curse this is my own single experience, and there are thousands of travelers who gets there BnB solution every day and all are happy.
> As every property, guest and host is different and has different expectations and ideas of a level of acceptable cleanliness, it is very difficult to have a fully standardised workflow on cleanliness. What might be normal or acceptable to one person, may not be for another. Our hosting obligations specify these things, but obviously, what one person considers 'properly cleaned' is very different from another - you can read about the hosting obligations here - https://www.airbnb.com/policies#host_obligations
Airbnb is more work, more risk, more variability, and less certainty. If you’re staying at a hotel and something doesn’t work out, you can usually get another room or at least have it looked at. If the place you just booked on Airbnb does not work out, you’re out of luck.
Great customer support does not change the fact that it’s a necessity because incidents just happen. When you’re hit by a problem, you’re not a statistic.
I’ve got my fair shade of apparently unwashed linen, moldy-smelling crack shacks, pile of shoes randomly dumped in a coat closet, exposed wiring, blood stain in the bathtub, a random pot house hosting a skludgy Aussie drunkard, and a basement suite with a junked fridge outside of it. For the record, I’ve also got a fair amount of places with fabulous views, hosts who can’t be any nicer, and impeccably clean floors.
Booking with Airbnb is like gambling with your life quality in general. You have to be extremely cautious and meticulously expend a great amount of effort just to make sure you’re booking a place that’s actually good.
When it’s good it’s really good. When it’s bad it’s hellishly awful. Airbnb is sometimes much cheaper, but that’s possibly all it is to me.
While I still visit a couple restaurants if they serve local specialties or are well-known, I really appreciate the freedom to cook, stay healthier, and save money on meals.
There are hotels in colorful neighborhoods with some pretty unique rooms. And how many people, when traveling, opt to use the kitchen even once rather than eat out?
All those with small children, to start with.
Most?
Hotels could also offer a "home-stay" rate that does not include housekeeping on stays over 3 days--I'd go for that every time.
On the other hand, AirBnB should be more like a hotel: collect all hotel and local taxes on every stay.
It should also be a law for both hotels and home-stay websites to advertise only the full and final cost, including all taxes, cleaning fees, and so-called "resort fees."
Number of responses? Zero.
I love the concept, but the reality is much different than everyone makes it seem.