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The use of peer-to-peer vacation rentals has exploded over the last decade. It took Marriott 60 years and numerous acquisitions to establish itself as the world's biggest hotel operator. But in just 9 short years, Airbnb has grown to eclipse the largest global hotel chains in value, and with over 4 million listings, has more rooms available than the top 5 hotel chains combined.
While Airbnb doesn't yet have a loyalty program in place, there are indications the industry will move in that direction in the future. During the recent acquisition of onefinestay® by Accor hotels, CEO Greg Marsh talked about:
“…possible future tie-ins with AccorHotel’s customer loyalty programs for brands such as Sofitel or Fairmount, Raffles, and Swissotel.”
For now, Qantas and Delta now partner with Airbnb, allowing guests to earn points and miles on stays booked through their respective online programs. When Airbnb's organic growth plateaus, the 100+ million hotel loyalty program members will offer an inviting prospect.
While not directly points related, showing how websites such as Airbnb, VRBO, and onefinestay® sometimes offer better value than a hotel, or an experience that traditional accommodation providers are unable to match, provides opportunities to explore lodging options outside of points earning hotels.
We've focused on Airbnb as we have more personal experience with their platform than with other home-sharing platforms, but the same principals apply industry-wide.
When Booking on Airbnb Is Cheaper Than a Booking a Hotel
This first one can be a contentious issue. When discussing this with other travelers, the argument against Airbnb being more competitive is often that it's not comparing apples to apples.
While a hotel room can be evaluated and priced in a straightforward manner, Airbnb options can involve anything from a mattress on the floor or a hut in Thailand, to an entire castle complete with staff and a draft horse in France. With that in mind, we'll be pulling our results from one of the best studies we've come across on the subject, from bus booking website BusBud.
Busbud's study, released at the start of 2016, compared prices from major cities in the US and Europe, using data from Hotels.com and Airbnb.
“We analyzed 220,000 Airbnb listings worldwide as well average hotel rates from one of the largest hotel booking websites in the world, Hotels.com, to find out if Airbnb or Hotels are a better deal in major cities around the world.”
You can see the US results in the graphic below, and check out the full results from the study over on the BusBud website.
The results from North America show a clear divide separating the north and south of the country, with Airbnb cheaper across all cities surveyed north of San Francisco, including Toronto. From Nashville south to Austin, the trend is reversed, and Airbnb is more expensive than a hotel.
BusBud goes deeper into the results on its blog, but the main takeaways from both the US and Europe (EU results in the graphic below), is that there are a lot of scenarios where Airbnb is cheaper than a hotel for a comparable stay.
Moving outside the BusBud study and into personal experience, we've found Airbnb is one of the only ways to travel in some parts of the world, particularly when leaving main population centers. Traveling in New Zealand is a prime example, where hotels affiliated with leading rewards programs are in very short supply.
Hotels are expensive, award availability can be difficult to find, and if you are outside of the main tourist cities, Airbnb is often your only option unless you are prepared to spend $150+ per night for a Comfort Inn.
We booked several Airbnb properties as part of a trip around New Zealand's South Island last year, most of them in small towns that have no other accommodation options.
Booking Airbnb Is Ideal for Large Groups and Families
When traveling on your own or with a partner, or for quick overnight stays, hotels are convenient, easy to organize, offer a consistent standard, you can use points to pay for your stay, and use elite status to supply extra comforts and amenities. When you're traveling with a group of people, however, paying for multiple rooms that are separated, and don't offer a combined living area in which to socialize, relax and share time together can be both expensive, and inconvenient.
A good example came up when discussing this with another team member here at AwardWallet. His wife was with a group of friends making a trip to LA for a girls weekend. Hotels in Hollywood were expensive, and they could not all fit in one suite.
Airbnb provided a perfect alternative. Airbnb offers dozens of luxury apartments, mansions, and estates in Hollywood that cater to groups at affordable prices. The property they located and booked had a private pool, fantastic areas to relax and unwind, and could comfortably accommodate nine people. For groups and families, Airbnb and other home-sharing sites can provide exceptional value when compared to hotels.
Book Airbnb When There Are No Major Hotel Chains Nearby
Leveraging the money you spend using credit cards, and redeeming the points and miles earned along the way for free travel and new experiences is a gift we take pretty seriously at AwardWallet! But not every destination has hotels tied to reward programs. Does this mean you should skip these locations? Absolutely, not!
In these cases, points and miles can still work as great facilitators of cheap travel when redeemed for flights; and they will get you close to your chosen destination. From there, it's a case of trying to find the best deals on accommodation, and taking advantage of fixed-value points via credit cards like the Barclaycard Arrival Plus® World Elite Mastercard® to wipe out the cost of your stay.
Tip: Airbnb is a fantastic option for public holidays like Memorial Day and Labor Day weekend when accommodation can sell out at popular destinations. If you are struggling to find accommodation during public holidays, home-sharing sites like Airbnb often have a higher level of availability due to hosts leaving town and their properties being free.
Bali is a classic example. Bali has a number of options for points enthusiasts such as The Ritz-Carlton Bali we recently featured in our post, 5 Luxury Properties to Redeem Ritz-Carlton Free Night Certificates. But every hotel attached to a loyalty program, bar one, is located in the South East corner of the island.
If you want to sample the fantastic vegetarian food and yoga studios of Ubud made famous in the movie Eat Pray Love, you need to book an independent hotel, which run as high as $600 per night when in high demand, or turn to home-sharing websites like Airbnb for alternatives.
On our last trip to Ubud, we discovered The Loyik Villa Ubud on Airbnb, and negotiated a price that was so good; we placed our son in a local school, rebooked our flights, and stayed for two months. In cases like this where the destination is unique, independent hotels expensive, and there are no options to earn or redeem points; Airbnb is a great way of reducing the cost of accommodation and often throws in a unique experience as well.
Airbnb Properties Offer Great Value for Longer Stays and Vacations
The cost savings of Airbnb properties are not reserved just for the price of accommodation. Another benefit when using a home-sharing website is that most properties are equipped with a fully functioning kitchen.
While the idea of heading on vacation and cooking may be abhorrent to some, if you are on the road for any length of time, a simple home cooked omelet in the morning with a cup of coffee and an amazing view often beats having to head for the buffet. It can also have a substantial effect on the cost of your stay.
If the idea of cooking breakfast while vacationing is still too much, fear not, this leads straight to the next advantage of Airbnb for extended stays.
Everything is negotiable.
While it is unlikely that Marriott is going to let you haggle over the cost of your room, there are very few things that are non-negotiable on Airbnb. Don't want to cook breakfast, great, negotiate to have someone cook it for you at your villa each morning, or have it delivered.
For the villa example in Ubud, these are just a few of the things we negotiated:
- The price of the villa was negotiated down for a stay of two months
- A set rate and times for cleaners, yard and pool maintenance
- For a local restaurant to deliver meals to the villa when needed
- Organized someone to be on call if we needed translation or transport
- A motorbike for the two months we stayed and guided tours thrown in
- Pickup and drop off to the International Airport in Denpasar
Airbnb Allows You to Hyper-Target Areas of Interest
While hotels have many rooms in the one location making it easy to secure a room. Short-term rentals like Airbnb have fewer rooms per premises, but many more locations to choose from. This allows you to hyper-target specific areas and get in close to your favorite eatery, yoga studio, nightclub or away from town and out into nature.
How do you find accommodation in the Love Hotel district in Shibuya, Tokyo, without staying in a Love Hotel? You book the very Japanese shoebox apartment above the Love Hotel on Airbnb for the grand sum of $500 for 6 nights.
Is There Any Way to Earn Rewards Points on Airbnb?
You can earn points and miles with Delta SkyMiles and Qantas on Airbnb.
Delta SkyMiles:
- Register as a guest to receive $25 off your first qualifying Airbnb stay, and up to 1,000 bonus miles. Plus, new and existing guests will earn 1 miles per $1 spent on all stays
- Register as a new host and be eligible to earn up to 25,000 bonus miles – click the link for details
Qantas Frequent Flyer
- Earn 1 Qantas point per $1 spent with Airbnb
You can also earn points on Airbnb stays using a card like the Chase Sapphire Preferred® Card.
Things to Consider Before Booking an Airbnb Stay
- The Airbnb Host cancellation policy. While Airbnb does impose penalties on hosts that cancel reservations, especially at the short notice, it does still facilitate them due to the nature of its business model. You can see the host cancellation policy on the Airbnb website
- The Airbnb Guest cancellation policy. One of the tricks to making Airbnb work for you as a guest is to double and triple check your planning before you book a stay. Airbnb allows hosts to set one of three cancellation policies, Flexible, Moderate, and Strict. While the Flexible option lets you cancel up to 24hrs before a booking and still receive a refund (minus the Airbnb booking fee), the other options can be somewhat harsh. You can see the different Airbnb Guest cancellation policies on Airbnb's website
- Reservations are prepaid. One of the benefits of booking a hotel is that most of the time you are booking a flexible rate that often does not require payment upfront and allows plenty of flexibility around cancellations. Airbnb, on the other hand, requires all payments at the time of booking which can make speculative travel more involved.
- Finding Airbnb properties is not always easy. Due to the fact you are sometimes reserving a property in a foreign country where you don't speak the language, finding the property can be difficult. Speaking from experience, trying to find our Airbnb accommodation in Mount Fuji in the dark in the middle of a snowstorm was an hour of frustrated back and forth with an owner whose language we didn't understand.
Note: Airbnb is fighting legal battles in cities all over the globe to establish the legality of its short-term residential rental business model. In the U.S., Airbnb has recently purged thousands of listings due to political pressure, and the legal landscape is still somewhat of a gray area. While Airbnb has its advantages, there is also the inherent risk that you could lose a reservation at short notice for a variety of reasons. That said, from personal experience, if you read the reviews, talk to the hosts, and use your common sense when booking, you mitigate most of the risks involved and the benefits of Airbnb well outweigh the downsides.
Final Thoughts
While booking accommodation on Airbnb comes with its own set of challenges, it can provide a lot of flexibility, particularly for groups and families. It also offers the opportunity to visit and immerse yourself in an area that you may not otherwise have the chance to visit.
As an emerging industry that is yet to fully mature with a structured regulatory framework, companies like Airbnb and VRBO are still undergoing rapid change, and it pays to double-check the rules surrounding your booking before pressing go.
Personally, if Airbnb released a co-branded credit card tied to a half decent loyalty program tomorrow, I would redirect 90% of my hotel points earning efforts to that program overnight. Having spent more than three years invested as both a host and a guest, across multiple countries and cultures, I've yet to have a poor experience with Airbnb. And while I know there will most likely be one sometime in the future, I can recall plenty of questionable experiences with large hotel chains over the last three years.
For now, use a card like the Chase Sapphire Preferred® Card to book Airbnb stays and maximize the bonus points on travel spend, and make sure you register with Delta, so you earn SkyMiles on every dollar spent with Airbnb.
If you have an Airbnb story to share, leave it in the comments below as we would love to hear from you.
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What I like about AirBnB is the unique places to stay in budget. I have stayed on hill top houses, tree houses, by the lakes etc. Also, some of them provide free options like kayak, canoe, binoculars, telescope etc that can make the stay more interesting. However at the same time I should say that it does take time and effort finding a good place that has good real reviews, locations, rules etc whereas with hotels, reviews can be found across multiple sites…good for a quick and simple decision process. But the extra time I put in for the AirBnB search had always been rewarding.