Thursday, February 29, 2024

Airbnb vs. Hotels: Who Is Winning Over the Industry in 2020

Both hotels and Airbnb are in a tussle to get back up after the effects of the pandemic

Since the inception of Airbnb in 2008, the hotel industry has been rudely jolted awake by the pressure the home-sharing service has been putting on them. 

Based on data from 2014, a 2018 report showed that in the ten cities of the United States that housed the most Airbnbs, there was a 1.3% decline in the nightly check-in rates of hotels in the same cities. 

This ultimately led to a 1.5% loss in the hotel industry revenue that year. Hotel owners were not too excited about this supposed usurper as they felt the impact of the new and comely style of temporary living for weary travelers and people in need of temporary accommodation. 

Airbnb has enjoyed the community-style accommodation rental service over the years, giving hotels a run for their money, until trouble struck in paradise— The Global Pandemic of 2020. 

This year, both hotels and the private rental service have struggled to get back on their feet to continue their race.

The question remains, who is winning? 

Advantages of Airbnb over hotels in 2020

woman on hotel bed

Airbnb gives the home-like, convenient experience

The Vision of Airbnb came to be when its founders had to lodge 3 travelers in their home as they had nowhere to stay. 

Now this seemingly hospitable gesture has evolved into an online market where people (hosts) can rent their homes to travelers, tourists, or individuals who need a temporary pad in that area. 

Airbnb is more appealing to these categories of people, especially those who wish to lodge for a lengthy but not-so-lengthy period. 

This accommodation style appeals to people because it not only reminds them of home with all the home essentials available,  but it is also way less costly and more convenient than many hotels. 

This service spans across 81,000 cities in over 190 countries and offers many advantages for people in the home rental business. Let’s examine some of them below:

  1. Free Listings: Unlike many property-rental services, Airbnb does not charge hosts to pay to list their properties on their site. The cost-free quality of this service takes away a lot of cost from hosts, making it possible for more homeowners to sign up for the service. 
  2. An array of options: Different homeowners list different types of accommodation offerings that suit a broader category of individuals. There’s almost no type of property you need on an Airbnb that you wouldn’t find available.From single rooms to entire houses, houseboats, yachts, apartments, and even a castle, you would find on the site. Hosts are magnanimous enough to share their homes, of course, for a fee.
  3. Prices Vary Per Hosts: Again, the hosts have full authority over the price they wish to charge for their properties. There are also different pricing plans, ranging from payment per night to per month. Hosts can set their prices as high or as low as they like.
  4. Host Protection: While bringing a stranger into your home is one big risk that hosts face due to potential damages reckless renters may cause, Hosts can rest relaxed because Airbnb offers protection for damages.This protection for hosts can cover costs up to $1million in the event that damages do occur. However, this is only permissible in eligible countries.
  5. Customized Searches: Airbnb helps to ease the search for available accommodation for both hosts and guests. The site allows users to search with more customized searches such as a string of key phrases like apartment with a walk-in closet. This helps to narrow down searches more quickly. 

Advantages of hotels over Airbnb

hotel and restaurant sign

Hotels offer consistency and spontaneity

While it looks like Airbnb has a ton of home advantage, hotels are also quite advantageous over this new-age visitors’ landing pad. These are a few of the advantages below:

    1. Consistent quality: A few unlucky guests have complained that Airbnbs that hosted them were quite different from the experience they had seen on their listings. Hotels’ quality doesn’t waver; what you see on the brochures is likely what hotels give in real life.
    2. Great for last-minute booking: Getting an Airbnb accommodation last minute can prove extremely difficult. Hotel lodgings, on the other hand, take less time and research effort. A win for hoteliers.
    3. Increased visibility: With a vacation rental channel manager, hotels have a higher shot at visibility to reach more customers. Signing up to a channel manager allows hotels to list their businesses on hospitality platforms such as Airbnb even.This helps hotel companies stay ahead of the industry and even grow their bookings.
    4. Easier cancellation process: Hotels have a more flexible cancellation process than Airbnb. This makes it easier for guests to commit to hotel bookings knowing that they have a higher chance of backing out with hotels.

Trouble in paradise: COVID-19

closed due to covid-19 sign

As with many other sectors, COVID-19 did not spare the Hospitality industry

In 2018 alone, US hotels raked in an annual profit of $80billion while Airbnb brought in $1billion+ in the second quarter of 2019 despite higher labor costs. We can say that these two giants have been excelling in the hospitality industry until trouble rocked their boats vigorously when the global pandemic, COVID-19 struck, heralding the new year 2020. 

Significant  problems caused by COVID-19 for hotels and Airbnb

This pandemic spelled a lot of trouble for both hospitality giants, which took a noticeable toll on annual income revenue by both hotel companies and Airbnb. These are a few of the effects of COVID-19 on both of them. 

  1. Complete closure of Hotels and Airbnb: The decline began with the complete lockdown of all businesses, including hotels. It was goodbye to many salaries for the harrowing months of staying safe at home.
  2. Retrenchment of staff for Airbnb: Following the reopening of businesses after the pandemic, Airbnb cut off 25% of its workforce to create a more focused home rental service. It has also shaken off some of its previously offered services like transportation and Airbnb studio.This will surely lead to a decline in hotel investments in 2020.
  3. Decline in guests and home renters: Many people now live conscious of their health and the places they visit due to the effects of the pandemic. This has led to a general reduction in the number of lodgers at hotels or bookings for Airbnbs.

Who is gaining the upper hand in 2020?

chess board

The struggle for both ends of the hospitality industry to out-do each other continues 

Despite these many challenges that both sectors of the hospitality business are facing, hotels and Airbnbs are gradually starting to find their feet again. However, the COVID-19 pandemic initiated some new changes in the hospitality industry, of which both businesses are struggling to out-do the other. 

Hygiene policies

With the threat of the virus still looming and everybody now being extra cautious, the only way to lure people back to lodging in hotels and Airbnbs is to promise to maintain 24/7 hygienic standards. 

Many hotels now have new cleaning policies in line with COVID-19 hygiene principles; many have even created budgets to fund this endeavor. 

Similarly, Airbnbs have employed professional cleaning services to reassure their guests of their commitment to keeping them safe. These cleaning services are thorough and verify that their workers get the job done via different checks. 

On this count, both hotels and Airbnb are tied, seeing as they have taken measures to ensure the safety of their guests.

A chance at privacy

The social-distancing rule is another policy that both hospitality sectors are struggling to uphold. A lot of Airbnb rentals have scrapped the necessity for visitors to meet the owners by providing security codes to gain access to their property. 

However, many hotels are yet to meet up with the “contactless” experience that many visitors crave. Only a few luxury hotels can afford this. There is also a decline in many of the previously allowed hotel amenities like bars, pools, crowded restaurants, etc.

On this count, the safety that comes with staying in a home-like environment is what Airbnb is bringing to the table; and so they take the lead.

Cancellation policies and refunds 

On the issue of refund and cancellations, hotels are now more generous with their cancellation policies, allowing guests to modify or cancel their reservations between 24-48hours before their arrival with no consequences.

Airbnb, however, has decided to toe the line of refunds over cancellation. They urged their hosts to issue refunds to guests that made bookings before March 14 – June 15, 2020. 

The rental service even set up a $250 million fund to assist with the expenses. While there is no definite winner on this count, Airbnb appears to have the interest of both hosts and guests at heart, ensuring that neither parties sport a significant loss.   


By looking at both sectors of the hospitality industry under the radar of changes for the post-pandemic era, we can see who is gaining faster ground in picking up the lost pace and winning over the industry for the year. 

While hotels are trying to do their part by catering to their guests’ safety and COVID-19-compliant needs, Airbnb might be ousting them with their immediate response to the pandemic situation and their ability to adjust and come up with creative measures that are keeping it from significantly crashing.

Hotel Speak Community
Hotel Speak Community
Posted by the Hotel Speak Community, made up from a wide range of talented hospitality professionals.

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