Are Airbnbs really still cheaper than hotels?

13/12/2023

Holidaymakers could save hundreds of pounds by staying in a hotel instead of an Airbnb, new research by Which? Travel has found.

We compared the average price of a hotel room and a one-bedroom holiday let booked through Airbnb or rival platform Vrbo – and hotels were cheaper in 38 of the 50 destinations we looked at.

When launched, private holiday rentals from platforms such as Airbnb and Vrbo offered a cheaper alternative to hotels, but our research found that is no longer true in most countries.

The biggest price difference we found was in Santorini. A one-bed rental is £84 per night more expensive than a hotel room on the Greek island on average, meaning holidaymakers often fork out £588 extra for a week-long stay.


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Bargain hotels in big cities

Hotels were cheaper in 24 of the 30 cities we looked at, including every capital. The average price of a one-bedroom let per night is around £67 more than a hotel – with service fees extra.

In Greater London and Singapore, a one-bedroom Airbnb or Vrbo is typically £60 more than a hotel room.

Table notes: *Airbnb/Vrbo prices are based on AirDNA data and include cleaning fees but not service fees. **Hotel prices are based on Kayak data and exclude five-star hotels.

When we asked Airbnb and Vrbo about this, they both pointed out that holidays typically include kitchens and living spaces. Airbnb added: ‘This data is wrong and based on flawed methodology.’

UK hotel vs private rental prices

A one-bedroom Airbnb or Vrbo was pricier than a hotel room in all but one of the UK destinations we checked (Salcombe).

In Southwold, a one-bed Airbnb or Vrbo is £68 more expensive on average, so staying on holiday usually costs a whopping £476 more a week.

Table notes: *Airbnb/Vrbo prices are based on AirDNA data and include cleaning fees but not service fees. **Hotel prices are based on Kayak data and exclude five-star hotels.

We looked at what was available last-minute in London, where the average hotel room costs £102 (excluding five-star hotels), according to comparison site Kayak. We made the comparison as fair as possible by choosing the top-rated hotel and private rental on Airbnb and Kayak available on the same date.

With a budget of £102, the top-rated hotel on Kayak’s ‘recommended’ list was Moxy London ExCel, a funkily decorated budget hotel in Docklands with a small double room for £98.

On Airbnb, we filtered by ‘superhost’ – the platform’s top hosts – as well as price. The first listing was in a village north of Watford, more than 20 miles from central London.

The second was a £78-a-night ‘garden studio’ that backs on to a railway line in Wembley, and is only accessible through the main house. Most reviews were positive, but one described it as a ‘freezing cold, poorly maintained, shabby hovel.’

Airbnb vs hotels in NYC

We also checked what you can get for your money in New York with a budget of £156 – the average price of a hotel room – for a weekday stay in June, booked three weeks in advance.

Kayak’s algorithm’s top recommendation was Radio Hotel, a newish four-star establishment that resembles a giant Duplo tower in Washington Heights, Upper Manhattan. For £144, you can get a 220-square-foot room with a king-size bed, buttercup-yellow bathroom with walk-in shower, air-conditioning, free wi-fi and access to Netflix. The hotel has an art-filled lobby, restaurant, gym room and courtyard.

The Airbnb listing with the best rating for the same date was a gloomy-looking 250-square foot basement apartment in Williamsburg – a trendy Brooklyn neighborhood – for £143 a night. The one-bedroom flat has air-con, a double bed, sofa, fridge, microwave, a poky bathroom with a shower but no cubicle, and uninspiring decor.

Reviews were lukewarm, and complained of noisy pipes and dust. One said: ‘It’s not exactly a pleasant stay, but the listing doesn’t make any pretense about being a five-star hotel.’

This Williamsburg Airbnb is actually illegal. In New York, you’re no longer allowed to rent out your entire home for less than 30 days. You can still rent out a room for up to two guests, but you must stay in and register the property. Guests aren’t liable, but hosts could be fined up to $5000.

Earlier this month, the city clamped down on illegal short-term rentals and the crackdown has reduced the number of Airbnb listings in the city, which is expected to drive up nightly rates.

Scotland is the latest local authority to introduce a licensing scheme for short-term lets, which came into force on 1 October.

Airbnb prices rise faster than hotels

Hotel rates plummeted during the pandemic as holidaymakers favored Airbnb stays in rural and coastal destinations over hotels.

Data analytics company AirDNA told us: ‘The rise in [holiday let] rates since 2019 have been driven by the move from small, city center apartments to large rural houses with more amenities in places that usually charge more. We’ve also seen some effects from inflation.’

Last year, hotel bookings also boomed. UK room rates were up 11%, on average, compared with 2019, while US hotel rooms jumped 14%, according to hospitality analyst CoStar.

But hotel rates still haven’t caught up with Airbnb and Vrbo prices, which is part of the reason hotels were cheaper in most of the destinations we checked.

A bigger Airbnb or Vrbo might still be better value for a group, and having a place for yourself means you can cook for yourself and can be more practical for families.

France bucks the trend

Airbnb and Vrbo were cheaper in four of the seven destinations we checked in France. A one-bedroom rental was less or the same price as a hotel room in Antibes, Avignon, Biarritz, La Rochelle and Nice, but more expensive in Bordeaux and Paris.

This might be down to supply and demand. France has more Airbnb and Vrbo listings than any other country in the world apart from the US.

Private accommodation also costs less than a hotel room in both cities we checked in Sicily – Palermo and Syracuse. Hotels were cheaper in other Italian destinations, including Rome and Florence, although the price differences were less dramatic than elsewhere.

Our research

We compared the average cost of hundreds of thousands of hotel stays and 300,000 listings on Airbnb and Vrbo over 12 months in 50 cities and coastal destinations. Data analytics AirDNA supplied the average cost of one-bed Airbnb and Vrbo from May 2022 to May 2023 excluding service fees. Comparison site Kayak provided the average cost of a hotel room for the same 12-month period excluding five-star hotels.

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