Why Travelers Are Rethinking Their Airbnb Choices

As the price gap between hotels and short-term rentals narrows, many travelers are reconsidering their accommodation options. 

Maureen McCartney, a frequent Airbnb user for eight years, has recently shifted her preference back to hotels after a series of disappointing stays. During a recent trip to Seattle, she booked a basement suite that, contrary to its appealing online listing, felt more like a horror movie set. "It was damp down there," she recalled, noting the presence of tools and jagged edges that made her uncomfortable.

McCartney's experience echoes a growing sentiment among travelers. Online discussions reveal numerous complaints about Airbnb, with users questioning its value and expressing dissatisfaction with their stays. A common grievance involves the expectation for guests to clean up after themselves, even when a cleaning fee is charged. "It’s as if you’re at home," McCartney remarked, emphasizing that part of the vacation experience is to avoid such chores.

Historically, Airbnb accommodations offered significant savings over hotels. However, McCartney now finds that the cost difference has diminished. Recent data from AirDNA indicates that in 2024, the average daily rate for hotels in Canada surpassed that of one-bedroom short-term rentals by about 20%, a stark contrast to the 25% difference noted in 2019.

The pandemic played a pivotal role in this shift. Hotels slashed prices to attract travelers in 2021 and 2022 as COVID restrictions eased, while short-term rental prices remained relatively stable due to remote work trends. Makarand Mody, an associate professor at Boston University, noted that many sought the privacy and safety of entire homes offered by Airbnb during the pandemic.

However, as travel rebounded post-pandemic, business travelers began flocking back to hotels. Operating costs for Airbnbs have also surged due to rising utilities, insurance rates, and interest costs. As of August 2024, the average daily rate for short-term rentals in Canada reached $261.47—nearly 47% higher than in 2019.

Despite these changes, Airbnb continues to present itself as an affordable alternative for unique stays and larger groups. The company boasts over eight million listings worldwide and claims that nearly half of its Canadian offerings are in areas lacking hotel accommodations.

The landscape of short-term rentals has evolved significantly; many listings are now managed by professional operators rather than individual hosts. This shift has led to dynamic pricing strategies similar to those used by hotels and ride-hailing services. For instance, during Taylor Swift's Toronto performances next month, average daily rates for short-term rentals have surged by 57% compared to last year.

As travelers reassess their preferences, hotels are adapting by incorporating amenities traditionally associated with Airbnbs. Chains like Hilton and Marriott are expanding their extended-stay offerings with suites that include kitchens and living spaces. Innovative hotels such as Hotel Zed in British Columbia are also creating distinctive experiences designed to engage guests beyond the standard offerings.

For McCartney, the decision to return to hotels is influenced not only by price but also by a desire for community stability amid Canada’s ongoing housing crisis. She believes that prioritizing permanent residents over transient visitors can foster healthier local economies.