Staying in an Airbnb rental may be only marginally less expensive than sojourning in a hotel, at least for small parties booking short-term stays, an analysis of short-term rental and hotel prices in Toronto shows. It may be part of the reason why guests are increasingly angered by the litany of fees included in their bookings.
In Canada’s most populous city, the average daily rate for a studio or one-bedroom apartment on the Airbnb platform in July was $214, according to AirDNA, a short-term rental data provider. That was $33 a day less than the $247 Toronto hotels charged on average during roughly the same period, according to data spanning July 1 to July 30 from STR, an analytics company focused on the hospitality industry.
The average rate for studio and one-bedroom rentals, which AirDNA considers comparable with hotel rooms, was up 44 per cent from $148 a day in July, 2019, during the summer before the onset of the COVID-19 pandemic. By contrast, the average daily rate paid by travellers staying in Toronto hotels rose by 24 per cent over the same four summers, up from an average of $199 in July, 2019, according to STR.
For Airbnb listings that include larger properties – but not shared accommodations – the average daily rate in July was nearly $300 a day, more than 50 per cent above average rates in July, 2019, the AirDNA numbers show. The data for short-term rentals does not include service fees, which can vary but often amount to an additional 10 per cent to 15 per cent, the company said.
Airbnb ABNB-Q has challenged some of the data, saying third-party analyses of its listings typically incur a number of issues, including possibly not accurately reflecting actual bookings or what guests paid.
The short-term rentals giant said the average daily rate for Airbnb accommodations in Toronto increased approximately 15 per cent between 2019 and the first six months of 2022. It did not provide dollar amounts for average daily rates.
Hotel-like prices may help to explain some travellers’ growing angst over the many fees guests must pay in addition to the base rate advertised on the platform.
“I don’t stay in Airbnb’s anymore,” U.S.-based Twitter user Michael Karnjanaprakorn recently wrote.
“Cleaning Fee: $200. Instructions: Clean the dishes, take out the trash, and wash all the sheets before you leave,” the tweet, which received more than 27,000 likes, reads.
In a press release last year, Airbnb addressed criticism over fees noting that users can see a detailed breakdown of potential charges prior to committing to a booking.
Cleaning fees are set by hosts based on factors such as the size of the home, location, amenities and the number of guests. “We believe that hosts having autonomy over their own pricing helps empower them to achieve success on our platform,” the company wrote.
Enhanced cleaning protocols because of COVID-19 might have also increased cleaning expenses for some hosts, the company noted.
Other fees include a service charge – usually under 14.2 per cent of the booking subtotal – collected by Airbnb, and occupancy taxes imposed by the government, the company said. (In Toronto, for example, Airbnb has been collecting a 4-per-cent municipal tax since the start of 2021.)
But Airbnb’s PR response has hardly appeased disgruntled guests. Travel expert Matthew Kepnes, for example, said he has forsaken Airbnb for good.
Mr. Kepnes, who runs the website nomadicmatt.com, argued Airbnb rentals are no longer a good deal for short-term stays, especially in large cities, where there are plenty of hotel options.
“If you’re just going to New York for three days, it doesn’t really make sense,” he said.
In part, that’s because fees can significantly add to the cost of a brief stay, according to Mr. Kepnes. In a tweet from February, 2020, he referenced an Airbnb listing with a $100-a-night base rate and a $200 cleaning fee. “These cleaning fees are so onerous. I might as well just stay in a hotel for that price!” he wrote.
Mr. Kepnes also has qualms with Airbnb’s customer service, which he said makes it hard to obtain refunds. That’s another point in favour of hotels, he argued.
Aside from costs, he also has ethical reservations about using short-term rentals in large metropolitan areas. In many big cities, services such as Airbnb are taking much-needed housing stock away from prospective homeowners and long-term renters, he said.
Still, Airbnb may be a good choice in more remote areas, especially when booking longer stays, he said.
A growing number of travellers may be coming to Mr. Kepnes’ conclusion about shorter versus longer bookings. Since the start of the pandemic, Airbnb has seen a surge of longer bookings. Stays of 28 days or more were up 25 per cent in the second quarter of 2022 compared with the same period in 2021, and nearly 90 per cent above levels recorded in the second quarter of 2019, the company said during its latest earnings release.
Bookings of around a month or more have become its fastest-growing trip type by length, Airbnb said.
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Erica Alini