Price Isn’t Everything But Is An Airbnb or Hotel Cheaper for Your Next Vacation?

A woman sits poolside while on vacation.
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It’s the years-old dilemma every traveler faces: Airbnb or hotel? Ever since the homestay platform hit the market as a San Francisco startup, Airbnb has been a popular choice for travelers and a profitable side hustle for homeowners. It has also completely disrupted the hotel industry.

Once a no-brainer for budget travelers, deciding between booking a hotel room or an Airbnb property is increasingly complicated. While hotel chains can charge exorbitant rates during peak seasons in tourist areas, Airbnb hosts are also padding nightly rates for their vacation rentals with cleaning fees.

So which accommodations actually save money for travelers? As you might expect, it’s not just about cost but the value you’ll receive staying at Airbnb properties versus hotel stays.

Choosing Airbnb Stays vs. Hotel Rooms Is About More Than Cost

For travelers, much of the Airbnb versus hotel debate comes down to deciding what you want to get out of the experience. Someone booking a business trip has different needs and expectations than a large family traveling and vacationing together.

Here are a few things to consider that go beyond the initial cost to determine the value of a hotel compared to an average Airbnb.

Location

Business travelers and tourists choose luxury resorts or budget hotels because these accommodations are near attractions or downtown areas. This reduces the need for renting a car and builds more value into hotel prices.

Pro Tip

Vacationing on a budget? Try a cheaper alternative to getting your own wheels like car sharing apps.

Amenities

Enjoy room service, free breakfast, an indoor pool and all the other lap-of-luxury amenities hotels offer? No judgment. That makes the extra money you pay to stay at four or five-star hotels worth it.

But don’t forget that many vacation rentals have amenities, too. Laundry facilities, more space to spread out and something a standard hotel room can’t offer: lots of privacy and the luxury of quiet.

Number of Travelers

A private room in a hotel accommodates a fairly small group of travelers. You might even see the price jump if you book for three people instead of two. If you’re vacationing with a crowd, Airbnb prices tend to be cheaper on a per person basis than many hotels.

Pro Tip

Traveling with a crowd? Here’s how to build savings into your itinerary.

Length of Stay

Unless you’re booking apartment hotels specifically designed for extended stays and long business trips, Airbnb prices will be cheaper overall than private rooms at a hotel.

However, you should double-check the fine print to ensure Airbnb owners allow extended stays and that you’ll get a discount on service fees and the cleaning fee.

Quality and Consistency

A recent study from Boston University found that for independent travelers, the main concern in deciding between an Airbnb and a hotel was hygiene — which is easier to track at hotels. The bottom line is travelers expect a clean, comfortable space that offers an experience consistent with what is advertised.

Data from several years ago indicates those that opted for an Airbnb stay tended to prefer it to a hotel, but that may be changing as travelers return to tourist destinations post–pandemic.

Cost Comparison: Airbnb or Hotel Room

Is a hotel or an Airbnb cheaper for your travel budget? While there are lots of the caveats listed above to unpack, a straightforward cost comparison yields a clear winner.

The average nightly rate for a hotel in the United States in 2022 was $148.83, according to Statistica. The average nightly rate for an Airbnb in the United States in 2022 was $216 per night.

However, a cost comparison by U.S. city shows quite a bit of variation in the nightly fee with Airbnb coming in slightly cheaper in some markets. And safety concerns aside, Airbnb also comes in significantly cheaper for many international locales.


Average Nightly Rates at Airbnbs & Hotels

City Airbnb Hotel

Boston

$187

$262

Denver

$140

$193

London

$154

$183

Los Angeles

$194

$181

Miami

$207

$160

New York City

$143

$240

Philadelphia

$117

$155

San Diego

$299

$186

Seattle

$153

$158

Toronto

$101

$179

Washington, D.C.

$147

$164

Sources: AllTheRooms, Cheaphotels.org, Statista, Hostaway, Awning

These nightly hotel rate averages are spread across a wide variety of accommodations from budget hotels to luxury resorts. And in the case of Airbnb, you’ll find a huge difference in price between a spare bedroom in someone’s house versus having the whole property to yourself.

This cost comparison also doesn’t take into account taxes, occupancy fees and the additional cleaning fees that customers report have become an increasingly irritating part of Airbnb’s business model.

5 Reasons to Book a Hotel Stay for Your Next Vacation

Airbnb may have the competitive advantage in some cities, but there are plenty of reasons you can save by booking your next stay at a hotel instead of a vacation rental.

1. You Want to Skip the Rental Car

Many cities have extensive public transportation options and limited parking, so staying in the middle of the action makes sense for your budget. Hotels might put you closer to attractions and you can easily gain access to taxis or rideshares or take the hotel’s airport shuttle.

Pro Tip

Skip the surge pricing with our tips to calling a cheaper Uber.

2. You Don’t Want to Make Your Own Bed

Going on vacation means taking a well-deserved break from all those daily housekeeping tasks that permeate your own space. So put your feet up and enjoy it, guilt-free.

3. You Don’t Want to Make Your Own Meals

You had us at free breakfasts. Part of the beauty of Airbnb is having a full kitchen for cooking so you can save on the costs of eating out. But if your plan is to sample everything a city has to offer, including cuisine, hotels will put you close to the foodie scene.

Pro Tip

Want to save on eating out? See our tips on cutting the cost of that fancy dinner without curbing your appetite.

4. You Belong to a Hotel Rewards Program

Whether you’re a business traveler or just like to rack up the frequent flier miles, a hotel rewards program can offer some sweet incentives like free nights, room upgrades and other member perks.

5. You Want to Go All in on the Tourist Thing

Going to a city for the first time? There’s no shame in being a tourist. Staying in a hotel means it’ll be easier to meet fellow travelers and get the inside scoop (and maybe discounts to local attractions) from the hotel concierge.

Looking for a credit card that goes the extra mile on travel benefits? See our recommendations for cards that earn extra points with airlines and hotels.

5 Times Booking Airbnb Rentals Might Provide More Value

The following are reasons short-term rentals can be cheaper alternatives to hotels. But watch the fine print and make sure to figure a service fee or cleaning fee into your final cost.

1. You’re Traveling With a Large Group

Renting an entire house is expensive, but not if you have half a dozen travel companions willing to split the cost. This is why Airbnb or other platforms like Vrbo are perfect for planning a girls-only vacation or family reunion.

Pro Tip

Budgeting for a trip with friends? Use our tips for splitting the bill before things get awkward.

2. You Want to Make Your Own Meals

One of the outsized costs of travel is an endless parade of restaurant tabs. If you don’t mind rolling up your sleeves, having accommodations with a kitchen can make a big difference on cost.

3. You’d Like to Stay Awhile

Extended stays are certainly cheaper at an Airbnb, especially in rural or suburban areas without apartment-style hotel units available. Just double check the cancellation policy in case you need to change your plans due to unforeseen circumstances.

4. You Want Space to Spread Out

How much space depends on your group but, if you’re traveling with kids, having a home instead of a hotel can alleviate stress and let you spread out. Plus family members can share rooms without making it weird.

5. You’d Like to Live Like a Local

At some properties, the extent of your interaction with Airbnb hosts is getting the code to the lock boxes at check-in. Other superhosts are on-site locals who give you the inside scoop on the best places to eat and plenty of travel tips.

Staying at an Airbnb means you’ll also be in a residential or mixed use neighborhood where you can get a better feel for the area and a little local flavor.

Think hosting an Airbnb might be right up your alley? Read our guide on breaking into the Airbnb business, including how to take your listing to the next level.

Airbnb vs. Hotel: Which One Is Right for Your Next Vacation?

The bottom line is Airbnb and hotels are both in the same price range for most travelers to most U.S. locales. But we’d be remiss not to mention that there are some concerns that the popularity of Airbnb scoops up homes in certain markets, creating scarcity for first-time homebuyers and renters.

Your decision about which accommodation to book should consider not only price but the value of the experience you want. And how to put your travel dollars to work so you can rest and relax on your next vacation, whether that’s at a five-star hotel or at someone else’s well-appointed home.

Kaz Weida is a senior staff writer at The Penny Hoarder covering saving money and budgeting. As a journalist, she has written about a wide array of topics including finance, health, politics, education and technology for the last decade.