We are NerdWallet’s Smart Money Podcast, where we answer real-world money questions.
This episode starts our new series “This or That,” in which the travel team compares various ways to travel.
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One thing unites Airbnbs and hotels is that they offer travelers a place for the night. The differences in prices, fees, amenities, and service are striking. While Airbnbs were once a budget-friendly option for backpackers, rising costs and add-on cleaning fees can rapidly reduce their value.
Although hotels can be boring, they are reliable. While vacation rentals are more exciting, they can also be less reliable. Comparing prices between Airbnbs and hotels can lead to a dilemma.
We recommend that you choose the option that suits your travel style and requirements for each trip. A large vacation rental home will make group trips more fun and cost-effective, while a trip in a major city might be cheaper and easier. You will need to book a hotel if you plan to use points for lodging. However, there are other options.
Compare prices to get the complete picture. Make sure to always look at the end of your booking process to see the final price, including all fees. A significant portion of the cost can be made up by Airbnb cleaning fees and resort fees.
Booking for your trip is easy. Airbnbs are usually cheaper than hotels for longer stays (over a week) and group trips. For shorter trips, however, hotels offer more consistent service, no cleaning charges, and loyalty program benefits.
Avoid the most common Airbnb pitfalls. Search for amenities that matter to you, such as Wi-Fi speed.
Learn more about Airbnbs and Hotels on NerdWallet:
Sean Pyles: This is the NerdWallet Smart Money Podcast. We welcome you to send us your money questions, and we will answer them with the help our brilliant Nerds. Sean Pyles is my name. This week we launch a new series on travel called “This or That.” We boil down the most frequently asked questions about booking travel and make head-to-head comparisons. Here’s a comparison of Airbnb and hotels. Booking Airbnb used to be a great way to save money on lodging. However, cleaning fees have skyrocketed and guests don’t get the same level of hospitality as they did in the past. NerdWallet’s travel team analyzed over 1000 Airbnb reservations to determine how much people could expect to spend on Airbnbs. Sam Kemmis, NerdWallet’s travel writer, is here to share the results. Sam, welcome back Smart Money
Sam Kemmis, Thanks Sean. It was great to be there.
Sean Pyles: When people travel, the most important consideration is price. It can be difficult to tell which is more expensive, as prices vary based on the property. However, Airbnb cleaning fees can be compared easily. They are charged when you book an Airbnb. You don’t need to pay them if you book a hotel. Based on the data collected by your team, what is the average Airbnb cleaning fee?
Sam Kemmis, Yes. They do vary. There are properties that have no cleaning fees and properties that charge hundreds of dollars for cleaning. We found that $75 was the average cleaning fee for a listing during a one-night stay.
Sean Pyles: Okay. It could almost be the price of a night at a cheap hotel. It seems very expensive.
Sam Kemmis (Yes, absolutely). Airbnb charges a cleaning fee if you stay for less than one night. It’s a part of the price. It can make up a large portion of the cost. It was between 20% and 30% of the advertised price. This means that the cleaners’ fees are usually less expensive if the Airbnb is cheaper than the listing price. There are exceptions.
Sean Pyles I think people and Airbnb use cleaning fees to hide the true cost of a rental.
Sam Kemmis says yes. I could go on. This is a trend that has been happening in the travel industry for the past decade, or drip pricing. It is the idea that prices are dripped throughout the checkout process and that you’re mentally exhausted from all these add-on costs by the time that you check out. They say “Oh, whatever. I’ll just have to pay it.” ”
Sean Pyles: Yes. It’s been there. Listeners might also hear my neighbors doing yardwork. If you hear buzzing, sawing, or blowing, it’s likely that this is what’s happening.
Sam Kemmis Hello, my toddler is screaming.
Sean Pyles: Background noise galore It’s all part of the fun. OK. I should mention that I have stayed in Airbnbs with cleaning fees. I also received instructions on what to do before I checked out. This includes taking out trash and taking sheets off the beds. It’s a bit irritating, really, since I want to go on vacation and not have to clean. But when I add the cleaning fee to all of these things, I wonder if it’s worth paying more for a hotel without a cleaning fee.
Sam Kemmis says yes. This makes sense. It makes sense. There is nothing worse than having to pay a hundred dollars for cleaning and then being asked to empty your dishwasher before you leave, or whatever it may be.
Sean Pyles I start to wonder where the cleaning fee actually goes.
Sam Kemmis, Yes. It does sometimes go to a professional cleaner, but it can still be frustrating. This complaint has been heard by Airbnb. It felt like the complaint from 2022. People are tired of paying cleaning fees and cleaning up after themselves. They have made improvements. For most people, it’s now possible to toggle to see cleaning charges in search results when searching Airbnb. This allows you to see the full cost and not just the base price. You don’t need to click through to see the cleaning fee.
Sean Pyles: One thing people might not know is that hotels also hide fees. Here, I am thinking about resort fees. Could you please explain to the listeners exactly what resort fees are?
Sam Kemmis (Yes, I could go into detail about the complicated history of resort fees. They started in resorts that charged extra for use of stand-up paddleboards or other equipment. The resort fee allowed you to access all the items. Hotels realized that they could simply add this fee to any hotel. They are everywhere now. These fees are not always called resort fees. Sometimes they’re also called amenity fees or destination fees. But the idea is that it’s not an extra fee. It’s not a fee for any particular item. Although it’s usually included in the purchase price, it is not visible until you reach the final checkout screen.
Sean Pyles: Naturally. How much did they cost in general?
Sam Kemmis, Yes, we did analyze over 100 hotels in the U.S. and found that the average resort fee was approximately 42 dollars, which was 11% of overall cost. Although it is much lower than the Airbnb cleaning fee, it still represents a significant amount.
Sean Pyles : However, it appears to be a smaller part of hotel bookings than it is on Airbnb.
Sam Kemmis Total.
Sean Pyles: Okay. It seems that fees at hotels are easier to avoid in the debate about Airbnb versus hotels.
Sam Kemmis, Yes, it is easier to avoid resort fees. You can only find hotels that do not charge resort fees. It’s difficult to find Airbnbs that do not charge them. There are other tricks. For example, if you have Hyatt elite status, you don’t pay resort fees. This can help you save quite a bit. Airbnb doesn’t offer an equivalent. Because they are so prevalent, Airbnb cleaning fees can be difficult to avoid. The best option is to stay longer. This may not be the best option for your travel plans but it is where the hotel versus Airbnb tradeoff really shines. The $75 cleaning fee is waived if you stay seven nights. It’s a bit less intrusive, but if you only stay one night, the whole fee is due. Right?
Sean Pyles: Yes. Did you not also consider which booking option is best for a longer trip? For example, Airbnbs or hotels?
Sam Kemmis says yes. Airbnb is clearly the winner. Many properties offer a discount for stays of at least one week. In addition to the cleaning fee being diluted, you will also receive an actual amount reduced off your rate. The nightly rate for a seven-night Airbnb rental was 32% lower than that of a one-night. It was 46% less than a one night stay for a 30-night stay. It is almost half the price per night to stay for a whole month than it is for one night.
Sean Pyles: That makes sense. Airbnbs are great for group trips, which I have found to be the case most often. This is what you get when you consider, “OK, I have five buddies.” All of us want to go on vacation. We can choose to stay in a luxury hotel or a more affordable Airbnb. How does this work?
Sam Kemmis (Yes, we did an assessment of this, and it was tricky. But you can say that if you have eight people, then you will need at least two rooms in a hotel. We compared large Airbnbs to how much it would cost for multiple rooms in a hotel. We found that booking six Airbnbs was 33% cheaper than booking three hotels rooms. However, the average hotel cost was 29% less than booking two Airbnbs. There is a caveat to this: Airbnbs and hotels can be very different. It’s difficult to compare apples with apples and say that this Airbnb was as good as this hotel.
You should carefully read the listing on Airbnb to ensure it contains all the amenities that you require. It was a strange labyrinth of bedrooms connected that had no doors, so it was basically just us all sleeping in one room.
Sean Pyles This sounds like an intimate experience.
Sam Kemmis says yes. This is the Airbnb exclusive. Right?
Sean Pyles: You can also reach out and hold hands during the night, if you wish. However, I have also experienced a similar experience with Airbnb hosts who seem to have very broad definitions of what a bedroom is or what a bed is. A futon is not a bed, and it doesn’t feel comfortable enough. A 10-year-old mattress might technically be a bed but it will still be uncomfortable.
Sam Kemmis says yes. Although they have tried to clearly indicate where each bedroom is located, it is not always clear. You might also want to look through reviews and search for bed, mattress, or whatever it is you are looking for. If you have any questions, you can always reach out to the host.
Sean Pyles: Yes. That makes me wonder about the differences in quality when renting an Airbnb. You must have heard horror stories about Airbnb.
Sam Kemmis (Yes, it is). I have many. Because I write about this, I receive a lot of emails from readers sharing their horror stories, horror stories from hosts, and all the rest. The most notable was when one of our coworkers found a bullet hole in her windows that wasn’t there the night before. She didn’t hear it, but a bullet did pass through her Airbnb. It is interesting that they didn’t find the bullet.
The bat got into the bedroom that was connected to my other one, so we couldn’t open the windows at the top. We could only open one window, so we ran around with our brooms trying get it out. It was impossible to get out so we all ended up sleeping in the basement, with the window open. We hoped that the bat would go away.
We think it did. But, we aren’t sure.
Sean Pyles : It’s insane.
Sam Kemmis says: I have heard many horror stories about hosts. Having parties is a big deal for hosts. Parties and animals that are not allowed to be there are a common problem. Several hosts told me that guests used silly string to stain their property’s walls and carpet. If you are a host, that is a horror story. It’s been a great help to me to hear horror stories from hosts. This gives me an idea of the reasons they have so many rules.
Sean Pyles: I have thought about renting my home to Airbnb, but the idea of having to clean up after people who treat my place like a party house has scared me. So, I can fully understand the difficulties and stress of being a host.
Sam Kemmis. I believe that’s why you see more corporate management companies hosting Airbnb. It’s because it’s so difficult for mom and dad. If something goes wrong or someone damages something, it’s your home. It’s a completely different kind of emotional experience.
Sean Pyles: Yes. Now, let’s talk about why a hotel is better than an Airbnb.
Sam Kemmis says: It all comes down to what your needs are. If you are looking for 24-hour service, a hotel is the best option. Two weeks ago, I stayed in a hotel where the heat didn’t work in my room. This was at 1 AM when it was freezing outside. My toddler was also in the same room. So I called the front desk and they were extremely helpful and moved me into a room with heat. This would not happen at Airbnb. You could call your host and say, “Hey, it’s not working.” If you’re really lucky, they might come and fix it at 1 a.m. Otherwise, it’s going to be cold all night.
Sean Pyles You won’t be able move into an Airbnb like you can in a hotel room.
Sam Kemmis says: Yeah, exactly. The other thing, and this is a big one since I write about loyalty programs for hotels, is that Airbnb does not have a loyalty program. Hotels can be worth the investment if you plan to travel a lot, earn points and miles, and attain elite status. An Airbnb will give you free amenities and upgrades to your rooms.
Sean Pyles Are there other things travelers need to consider when deciding between an Airbnb or a hotel?
Sam Kemmis: What amenities are you looking for? A hotel is not the best choice if you plan to cook for your friends. Then there’s the question of what your trip is about. When I decide between an Airbnb and a hotel, this is what I think about. Do I want to stay at this place? If I go out in the woods and want to buy a cabin, then I will probably want to spend the night there and play board games. If I’m visiting a city because it’s important to me, I don’t care about where I stay. It doesn’t matter if the place is Instagram-worthy. I simply want somewhere to sleep. In that situation, I will often choose a hotel.
Finally, cancellations were something many of us considered a lot during this pandemic. Generally, hotels have better cancellation policies that Airbnbs, as the Airbnb hosts set the policy. This is not an Airbnb policy that applies to all hosts.
Sean Pyles: I got it. To go back to the point about what purpose your trip is and which one might be best, I believe it depends on what stage of the trip you are in. Let me tell you about my last year vacation with friends. We all met up in LA and went to Joshua Tree. We stayed in an Airbnb for one night when we arrived in LA. Then we drove to Joshua Tree and stayed for a few nights at a gorgeous Airbnb that featured a great kitchen, a hot tub, and a stunning view of the surrounding area. We stayed in a hotel one night when we returned to LA. But we weren’t in luxuriate or chill mode at that point. We felt more like “OK, let’s spend one last night in LA.” We will go out for a great meal. The next day, it’s time to fly home. It was about efficiency, not just staying at an Airbnb.
Sam Kemmis, Yes. Yes, airport hotels are a favorite of mine for this very reason. It’s like “I just want a crash and get up to catch the shuttle to my plane. ”
Sean Pyles: Yes. Okay. I have one more question for you. While we’ve been talking a lot about Airbnb in this episode, there are many other options such as Vrbo. Do they have the same problems as Airbnb? Or does it differ from one platform to another?
Sam Kemmis says: It varies from platform to platform and there are pros as well as cons. This was something I was interested in last year. I made a direct comparison between Vrbo and Airbnb. Vrbo seemed to be better than Airbnb in my opinion. The website of Airbnb is simply better. They have more options. It’s a little easier. Vrbo is family-friendly because each property is its own. They are not shared. You can always keep the place to yourself. However, it is very easy to search for separate places on Airbnb. This is not a significant difference.
Sean Pyles Vrbo may be restricting the offerings they offer or bringing no benefit to their customers.
Sam Kemmis, Yes, I understand what they are trying to do. Airbnb is known for being a more grimy couch-surfing experience. In my comparison, I didn’t compare the properties because I would need to stay at 10,000 properties to decide if Vrbos or Airbnb is generally better. My gut says that there isn’t much difference between the two platforms, partly because so many properties are listed on both. What I found myself wondering was if Airbnb is really the problem that people complain about or if it is just the whole home-sharing market in the same way as Uber. Is it possible that ride-sharing’s business model has some problems that nobody can solve?
Sean Pyles Okay. Sam, could you please share your takeaway tips with us?
Sam Kemmis says yes. Get the complete price picture first. To compare prices, ensure you reach the end of your booking process to view the final price including all fees such as cleaning fees and resort fees. Compare the final prices to see if they are more affordable than the initial price. Next, book the trip that you want to take. For longer stays, or when traveling with friends, Airbnbs are usually cheaper than hotels. However, for shorter trips, or with fewer people staying, hotels offer more consistent service, no cleaning fee, and all the benefits of a loyalty programme. Avoid the most common Airbnb pitfalls. Check the reviews to ensure the amenities you are looking for are available, and check the Wi-Fi speed. My No. My number one tip for Airbnbs is to bring your own soap and pillowcases.
Sean Pyles You seem to be speaking from personal experience.
Sam Kemmis A bad pillowcase and a stale soap are two of the worst things you can do.
Sean Pyles Thank you for speaking with me today.
Sam Kemmis We are grateful to Sean.
Sean Pyles: That’s all for this episode. Have a money question? Call or text the Nerds at 901-730-6370 to ask your questions. That’s 901-730-NERD. You can also email us at [email protected] Visit nerdwallet.com/podcast for more info on this episode. Remember to rate, review, and follow us wherever you get this podcast.
Meghan Coyle produced this episode. Tess Vigeland edited our audio. Kaely Monahan mixed the audio. A big thank you to all the NerdWallet pros at the copy desk.
This is our disclaimer. We are not investment or financial advisors. This nerdy information is for general entertainment and educational purposes only and may not be applicable to your particular circumstances. For more information, visit the Nerds.