The Airbnb Dilemma: Privacy, Pricing, and the Shift Back to Hotels

This is a guest post, by André Baljeu the Founder of techtalk.travel the opinions shared in this post are those of the author.

In a world where your weekend getaway could come with hidden cameras, choosing between Airbnb and traditional hotels is an important decision. In recent months, there have been news reports about Airbnb guests secretly recorded by the hosts of the properties they’ve rented. This blatant invasion of privacy is very concerning, and it’s important to consider the potential outrage if this had occurred within a well-established hotel brand. Yet the hospitality industry remains relatively silent on this issue.

Before we get into this, let’s look at some stats from WorldMetrics, which provided a detailed comparison between Airbnb and hotels, with statistics updated through 2024:

Comparing the numbers.— Source: techtalk.travel

Airbnb early days

I recall the early days when Airbnb emerged as a potential disruptor to the hotel industry. It was at a HEDNA event in Madrid, around 2015 or 2016, where a particular speaker—their name escapes me now—dedicated thirty minutes to discussing the looming threat Airbnb posed to hotels globally.

The speaker’s passion was palpable as he urged the audience to recognise Airbnb’s inevitable impact on their businesses in ways never seen before. However, the room’s reaction was one of indifference. In hindsight, as evidenced by the statistics above, it seems the speaker was onto something.

In the years following that HEDNA gathering, we’ve seen Airbnb take off and tremendously disrupt the typical hotel model. It was cool, it was trendy. When people asked where you were staying over the long weekend away, it was kind of novel and alternate to say, Oh, we booked this lovely Airbnb by the lake; it looks amazing.

Then came the pandemic

The hotel industry took a massive hit during the pandemic. However, despite this impact, one company that continued to perform well compared to hotels was Airbnb.

Clever marketing emphasised that even with social distancing, hotels were not a viable option for travellers, if they were open at all. Airbnb offered the ability to maintain distance from fellow guests, allowing travel while ensuring safety from COVID. Whether this claim was accurate is debatable, but it successfully attracted customers.

Stories of hotel closures became common. An 800-year-old guesthouse in Munich, which had been in the same family since opening and had survived two world wars, closed its doors due to COVID. Of all the closure stories I heard, this one was particularly poignant.

Pricing and technology

When Airbnb launched, one of the key differences they emphasised was price. They offered considerably lower prices compared to traditional hotel rooms. A significant factor for anyone on a budget, in addition to the novelty. Another advantage was the easy management of properties and stays for hosts and guests through well-designed and user-friendly technology. During COVID-19, this was a big advantage for Airbnb and all alternate accommodations.

Hotels also needed to prepare themselves regarding technology and how guests could interact on the premises in support of COVID regulations. Many had to quickly implement technology that was not budgeted for and had likely never been considered before COVID-19. At the same time, Airbnb and other alternate accommodation providers were well-established with contactless technology for guests and users.

Prior to the pandemic, during these “trying to compete” years, hotels emphasised that they were offering good value for their prices when compared to Airbnb. Some hotels even provided significant discounts to compete based on price.

The social impact of Airbnb

While Airbnb has brought financial success to many, concerns have been raised about its potential long-term impact on the housing market in major cities worldwide. It has been reported for a number of years now that Airbnb listings have reduced the availability of properties for long-term rentals, leading to increased difficulty in finding housing and driving up rental prices due to decreased supply.

In contrast, hotels contribute to the broader local economy, often employing local staff, sourcing products and services from nearby businesses, and investing in community initiatives. This local engagement can create positive economic ripple effects, supporting job creation and local suppliers. In comparison, Airbnb’s economic impact can be measured similarly, although more dispersed and with less benefit to the local workforce.

Challenges and concerns

In today’s market, finding a well-appointed room on Airbnb at a rate cheaper than an equivalent 3-5-star hotel can be challenging. Guests are also often required to pay cleaning and other fees, which many see as hidden fees. Nevertheless, Airbnb and its hosts have managed to enforce these fees.

An interesting point is the difference in reactions to hotel fees versus those charged by Airbnb. When Airbnb imposes such fees, they are often accepted, while fees charged by hotels tend to be scrutinised more by the customer. Why? It would be interesting to understand the reasons behind this discrepancy.

It is not easy to find concrete statistics on this issue. However, I have heard of instances where hosts have cancelled reservations within the 24-hour window, leaving guests in a problematic position upon arrival.

Additionally, if your host lives at the property you’re staying at and turns out to be slightly strange, your whole experience will be uncomfortable. If you’re a solo traveller, you might find yourself in awkward situations, which is not ideal at any time. There’s also the possibility of encountering neighbours who disapprove of having random people around and are not afraid to show it.

The reviews

Can the consumer rely on Airbnb’s review system? Hosts could have the ability to influence the system, making some guests reluctant to provide candid feedback due to concerns about potential repercussions on their personal reviews from the host.

The evaluation of guests by their hosts is not something I necessarily agree with. While I recognise the importance of feedback for the hosts, it may seem counterintuitive for paying guests to be subject to ratings. If mainstream hotels were to implement a similar system, it might not be favourably received. The concern of receiving a negative rating could deter guests from providing candid feedback, potentially impacting their future accommodation options.

Shifting preferences and privacy concerns

It’s worth noting that a survey conducted by Hyatt Hotels in the US revealed an interesting shift in preferences. Sixty per cent of Americans expressed a preference for hotels over alternative accommodations such as Airbnb. This indicates a changing mindset in the hospitality industry.

Additionally, the issue of privacy in alternate accommodations has been a cause for concern. The discovery of hidden cameras in some Airbnb properties in the US and the subsequent violation of guests’ privacy is very troubling. It’s important to bring attention to these incidents and, as hoteliers, emphasise how safe it is to stay in hotels that respect guests’ privacy to the highest level possible.

Compared to significant data breaches at global hotel chains over recent years, the individual privacy breach associated with Airbnb properties is equally substantial. Airbnb actively worked to keep these complaints from reaching the public. Actions like this speak volumes about a company’s general values and leadership.

Over the last decade, over 35,000 cases related to this issue have been logged and documented with Airbnb. Not only has Airbnb failed to accept any responsibility or ownership of this issue, but it has also failed to protect its users and actively engaged its legal team to keep these complaints from the courts and the public.

Comparing Airbnb and Hotels— Source: techtalk.travel

Conclusion and call to action

While the hotel industry continues to navigate guests’ evolving expectations, choosing between Airbnb and hotels remains a significant decision for travellers. While Airbnb offers a unique blend of diverse accommodations, it also presents potential privacy concerns and market and social implications. The platform’s decentralised model can lead to inconsistent experiences with inconsistent levels of service and security.

Hotels, on the other hand, provide a consistent and reliable option for travellers, offering a high standard of security, privacy, and professional service. The structured environment of hotels, with trained staff and greater security measures, ensures guests enjoy a safe and comfortable stay. For those who prioritise safety, privacy, and a seamless travel experience, hotels represent a compelling choice.

Supporting hotels by booking directly through their websites helps sustain the industry and often leads to better rates and personalised service. Next time you travel, consider choosing a hotel instead of alternative accommodations. Try to book your room directly through the hotel’s website instead of using an online travel agency (OTA). If the hotel has no booking engine, inquire about it during check-in. Let them know that booking through an OTA means they miss out on revenue and cannot personalise your experience for future stays.

Considering the technology aspect, some hotels have struggled to provide the same level of technology solutions that alternative accommodations offer. While this may still be an issue for many smaller independent hotels, most branded and chain hotels are now equipped with technology that rivals Airbnb’s offerings. Due to Airbnb’s impact and, of course, the effects of COVID-19, hotels have come to recognise the significance of meeting the technological needs of modern travellers.

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