Airbnb Vs. Hotels: The Better Choice

The hospitality industry has evolved immensely in the last two centuries. In the early 1800s, inns were the only lodging facilities that were available for tourists. However, at the turn of the century, the definition of lodging expanded to include food and drinks that were also provided for tourists and travelers. Soon, the element of luxury blended in, giving birth to hotels.

It was in the year 1829 when American architect Isaiah Rogers designed and constructed the first luxury hotel in Boston, Massachusetts. The hotel was named ‘Tremont Hotel’. The hotel boasted of private attached bathrooms with locks on the doors. The year 1829 is considered as a landmark in the history of the American hospitality industry. The 20^th century is known as the beginning of the modern hospitality era.

Evolution of Modern Hospitality
About Airbnb
Hotels or Airbnb – A Comparison

Evolution of Modern Hospitality

The 20th century saw innovations in transport systems that allowed more and more people to travel to various destinations. Enterprising entrepreneurs seized the opportunity this presented and jumped into the hotel business. The middle of the century saw the rise of giant hotel chains that have a global presence today. Famous names like Marriott, Sheraton Group, and Hyatt emerged as major players within the hotel industry. Increasing intercity travel due to the increasing use of cars and a well-connected road network also favored the growth of motels. This concept within the hospitality industry was well received and motels, too, grew in numbers. It is the 21st century that has seen maximum advancements with technological integrations in the hospitality industry. Apart from building some of the tallest hotels like Fairmont Makkah and Burj-al-Arab; Airbnb opened, signaling a new segment in the hospitality industry.

About Airbnb

AirBedandBreakfast.com, commonly known as Airbnb, Inc. was founded in the year 2008 by Brian Chesky, Nathan Blecharczyk, and Joe Gebbia. The company is headquartered in San Francisco, USA, and operates as an online marketplace for short-term and long-term homestays and experiences. The company plays the role of a broker and charges a commission for each booking.

Over the years, Airbnb has acquired many companies and has expanded internationally beginning with its first international office in Hamburg in the year 2011. The company has grown exponentially since it began operations and has gone on to become one of the most valuable and successful startups in the world. Airbnb has revolutionized the tourism and hospitality industry with a significant impact on HORECA (Hotel, Restaurant, and Catering) industry. It has disrupted the traditional HORECA model affecting revenue decline for hotels in certain markets. A notable detail of Airbnb is that it is one of the only major travel companies that does not have a loyalty program.

Airbnb Success Story - Personalizing accomodations in your budget!

Airbnb is an online marketplace that connects locals who want to rent out their house to immigrants who are looking for accommodations in the local area. Know about Airbnb funding, founders, business models etc.

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Hotels or Airbnb – A Comparison

With its business model of providing a platform for peer-to-peer exchanges, Airbnb has been fortunate to avoid any major rental and hotel tax laws so far. However, there exists a certain similarity in the way Airbnb and the hotels, function. Hence, it allows for a comparison of certain parameters between the two business models to gain insight into which is best suited to the tourism industry.

Price

Airbnb operates as a marketplace where hosts and guests exchange housing for money with the company earning a commission. It does not have a direct effect on the prices of the lodging offered, as hosts retain the rights to set the prices for different lengths of stay, cleaning fees, weekend stays, and additional guests. Hotels, on the other hand, maintain a pricing scheme that meets consumer demand and the price includes housekeeping services. Of course, both Airbnb and hotels charge a premium during holidays and at a tourist-friendly destinations. In recent years, though, Airbnb has substantially closed the gap even in the luxury segment by widening its offerings.

Type of Accommodation

This is where, perhaps, Airbnb trumps hotels due to the variety of accommodations that it can offer like standalone homes, shared spaces, apartments, and even some hotel rooms. Moreover, Airbnb accommodations offer residential-style amenities including living rooms, kitchens, dining rooms, laundry facilities, and sometimes even private parking spaces that are all included in the cost of the homes. Hotels, on the other hand, can provide some of these amenities at a surcharge. They are more traditional with guest rooms and some suites.

Quality of Stay

Between hotels and Airbnb accommodations, hotels come out on top when it comes to quality of stay. Hotels have a staff that is available 24/7 with immediate access to daily housekeeping services available which is included in the cost. Also, hotel guests can get an immediate resolution to any service complaints while Airbnb guests have to contact the hosts resulting in a loss of time. Airbnb homes also charge extra for cleaning services and sometimes, it may not be available at all.

Flexibility of Reservations

This is one area in which both hotels and Airbnb vary. Hotels offer refundable and non-refundable rates. However, extenuating or unforeseen circumstances will result in hotels relaxing on non-refundable rates and waiving any charges. These policies in hotels are all clearly stated and uniformly applicable. Airbnb hosts often set their own cancellation and refund policies which may widely differ from host to host. Although Airbnb offers cancellation policies for a limited number of extenuating circumstances, individual experience varies based on the situation.

Loyalty Programs

Most hotels have a robust loyalty program that encourages guests to repeatedly book rooms and in return get many rewards that include free stays, salon services, discounts on food and beverages, etc. Such reward programs guarantee a certain percentage of sales for hotels. Airbnb, however, has no such loyalty program and is dependent on the individual guest experience with the hosts for repeat bookings.

Conclusion

The question arises – Which is better?  Airbnb or Hotels?  The answer, however, is not a simple yes or no. It rather depends on the individual guest and the type of accommodation and service they are looking for as well as their budget. While it is true that hotels, in general, are a safer bet about quality and safety, Airbnb offers many more attractive deals and options than most hotel chains.

FAQs

Who are the founders of Airbnb?

AirBedandBreakfast.com, commonly known as Airbnb, Inc. was founded in the year 2008 by Brian Chesky, Nathan Blecharczyk, and Joe Gebbia.

Which is better, Airbnb or hotels?

It depends on the individual guest and the type of accommodation and service they are looking for as well as their budget. While it is true that hotels, in general, are a safer bet about quality and safety, Airbnb offers many more attractive deals and options than most hotel chains.