Hotels vs. Airbnbs: Which Is the Cheaper Option for You?

The answer depends on a number of factors, including location and group size.

Photo: Airbnb & Getty Images

When it comes to planning a trip, one question comes up again and again: Should I book a hotel or vacation rental? There are pros and cons to each option, and your choice ultimately depends on your destination, group size, and personal priorities. But at the end of the day, you're probably interested in whichever choice saves the most money.

When it comes to basic nightly rates, rentals are typically less expensive—but there are exceptions and a lot of caveats. Once you factor in hidden fees, amenities, local taxes, and hotel loyalty programs, the financial scales can really tip in any direction.

While the "best" accommodations really vary on a case-by-case basis (Jack might value extra space, while Jill values free amenities), here are some deciding factors to keep in mind when researching your next trip.

Factors to consider when deciding between a hotel vs. Airbnb

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Group Size

If you're traveling with a large group, vacation rentals are almost always the cheaper option. You can find houses on Airbnb and Vrbo that sleep 16 people—a group size that would require at least four separate bookings at a hotel. Plus, you get common areas like living rooms and backyards, as opposed to crowding together in a hotel suite or lobby.

Solo travelers or couples could go either way. Airbnb lists single rooms alongside entire units, which means you'd get your own sleeping space but would have to share the bathroom and kitchen with the owner. That slight lack of privacy is often worth it—just check out this Mexico City suite for $39 per night, or this room in Berlin for $29. In terms of entire units, however, prices tend to be comparable to single hotel rooms (probably not five-star ones, though).

02 of 08

Duration of Stay

Another huge determining factor when it comes to cost is the length of your vacation. If you're staying in a city for one night, booking a hotel room may be the cheaper option (especially if the hotel offers free airport shuttles). The mild hassles of renting an Airbnb—finding transportation, doing the key exchange, shopping for food, etc.—are not really worth it for a 24-hour trip.

For trips longer than a few days, Airbnb gains the upper hand back. You have to pay rental fees regardless of your trip duration (more on that later), so a $150 cleaning fee seems a lot more reasonable for a two-week stay than for a two-night stay. Some Airbnb hosts will also offer discounts for long-term stays—in fact, the company encourages this on their "How to Host" section online. The exact discount is completely up to the host. Most cap it at around 10 to 15 percent, but you can find much larger cuts if you dig deep.

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Rate Flexibility

While hotel rates are typically set in stone, there's a little wiggle room when it comes to vacation rentals. Since you are able to communicate with Airbnb hosts before you actually book the property, you might have a chance to haggle a bit.

"If you notice a home rental has availability for upcoming dates, ask the homeowner if they can knock the rate down a bit, especially if there's a lot of available rentals in the area," says Andrea Woroch, a personal finance and consumer saving expert. "Chances are, the homeowner would rather rent it for less than nothing at all."

04 of 08

Destination City

In a 2021 study from Bounce, travel experts analyzed the prices of both hotels and Airbnb listings across 80 of the world's most popular tourist destinations. They discovered many places where hotels are upwards of 60 percent cheaper on average than vacation rentals. In Waikiki Beach, for example, the average nightly price for Airbnbs is $271, while the price for hotels is just $74. Other hotel-favored spots include Nashville, Niagara Falls, Phuket, Barcelona, and Bali.

And then there are places where Airbnbs are ridiculously cheaper than hotels, like Boston ($172 for Airbnbs, $397 for hotels, on average) and Bora Bora ($269 for Airbnbs, $904 for hotels, on average). Of course, those Bora Bora vacation rentals may not be overwater bungalows with spas and private chefs, but they sure are cheaper.

05 of 08

Dining Options

Aside from the nightly rates, the biggest discrepancy between Airbnb and hotel costs is probably food. Almost all Airbnb rentals come with a kitchen or kitchenette (even if you have to share it with others), making it easy to prepare your own meals as opposed to dining out several times a day. Especially in huge cities like Las Vegas, where a simple lunch can easily set one person back about $25, the potential savings here are obvious.

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"If you want amenities, opt for a hotel," says Woroch. Most worthwhile hotels have pools, fitness centers, free breakfasts, shuttle services, and endless coffee, plus, the holiest of all holy amenities: a 24-hour concierge. Just beware of the amenities that aren't free, like valet parking and long-distance phone calls. And whatever you do, don't open that jar of peanuts in the minibar.

That being said, there are Airbnb rentals with hotel-like perks, including pools and gyms. There is also Airbnb Luxe, a branch of the company that offers high-end rentals with designated "trip designers" to arrange airport pick-ups, childcare services, private massages, and whatever else you may need 24/7. These rentals are…not cheap. (Castle in Tuscany for $15,633 per night, anyone?) But they certainly put the platform on par with hotels when it comes to aneminites.

07 of 08

Hidden Fees

When you conduct searches on sites like Airbnb and Vrbo, the results only list the nightly rates for properties. They don't take into account service fees, cleaning fees, owner fees, and other little surprises that can raise the final price by several hundred dollars. Some hosts will tack on other expenses at their own discretion, like fees for bringing extra people or fees for heating outdoor pools.

"I've seen homeowners cram fees like 'linen fees' into home rental rates before," says Woroch. "If I see this, I usually search for another property or ask the homeowner if they can remove it from the rental price."

Communicating with the host often yields results, but some fees are certain—like taxes. (Benjamin Franklin was right.) In some locations, Airbnb made agreements with government officials to collect local taxes, and the company is required to collect Value Added Tax (VAT) from customers in certain countries.

There's no set rate for service fees and cleaning fees (some hosts don't even charge cleaning fees at all), but you shouldn't be surprised to see each fee adding an additional $200 to the total price. Cleaning fees have gotten particularly steep in the age of COVID, with Airbnb introducing a "5-step enhanced cleaning process" that all hosts now have to follow. It's a good thing, but it does incentivize hosts to bump up those fees.

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Loyalty Programs

One final thing to consider: hotel loyalty programs. If you are loyal to a certain hotel brand or stay at one property many times a year for work, it's a no-brainer to reap in the rewards. Depending on how many visits you clock in per year, you could be looking at free meals, free nights at a hotel, or waived resort fees (that last one alone could save you hundreds of dollars). But what if you only visit a chain a couple times a year? "No matter how often you're planning to stay at a particular hotel brand, sign up for their loyalty program anyway," says Woroch. She points out that some programs (like Best Western) don't put expiration dates on their points, meaning you can leisurely rack them up over a long period of time. Plus, even the lowest loyalty tiers might get you free WiFi at the very least.

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