Airbnb nearly as expensive as a hotel, figures show, rising fees fuel user outcry – The Globe and Mail IG News

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Staying in an Airbnb rental can be only marginally less expensive than staying in a hotel, at least for booking short-term stays for small parties, an analysis of short-term rentals and hotel prices in Toronto shows. This could be part of the reason why guests are getting annoyed with the exorbitant fees involved in their booking.

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 less per day than 247 hotels in Toronto, according to data from 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 to hotel rooms, was up 44 percent from $148 per day in July, 2019, during the summer before the start of the COVID-19 pandemic. In contrast, according to STR, the average daily rate paid by travelers staying at Toronto hotels rose 24 percent over the same four summers, from an average of $199 in July, 2019.

For Airbnb listings that include large properties — but not shared housing — the average daily rate in July was about $300 a day, more than 50 percent above the average rates in July, 2019, AirDNA numbers show. The company said short-term rental data does not include service charges, which can vary but often range from an additional 10 percent to 15 percent.

Airbnb ABNB-Q has challenged some of the data, saying third-party analysis of its listings typically has a number of problems, including possibly not accurately reflecting actual bookings or the amount guests paid .

The short-term rental giant said the average daily rate for Airbnb accommodations in Toronto rose by about 15 percent between the first six months of 2019 and 2022. It did not provide dollar amounts for average daily rates.

Hotel-like prices may help explain the growing anger of some travelers who have to pay guests a number of fees in addition to the base rate advertised on the platform.

“I no longer live in Airbnb,” US-based Twitter user Michael Karnjanprakorn wrote recently.

“Cleaning Fee: $200. Directions: Clean the dishes, take out the trash, and wash all the sheets before leaving,” read the tweet, which garnered over 27,000 likes.

In a press release last year, Airbnb addressed criticism over the fees, saying that users can view a detailed rundown of potential charges before making a booking.

Cleaning fees are determined by the hosts based on factors such as the size of the house, location, amenities and the number of guests. “We believe that giving hosts autonomy over their own pricing helps them achieve success on our platform,” the company wrote.

The company noted that increased cleaning protocols due to COVID-19 have also increased cleaning expenses for some hosts.

The company said other charges include service fees — typically less than 14.2 percent of the booking subtotal — collected by Airbnb, and occupancy taxes imposed by the government. (For example, in Toronto, Airbnb is collecting a 4-cent municipal tax from early 2021.)

But Airbnb’s PR response has hardly amused disgruntled guests. For example, travel expert Matthew Keppens said he has left Airbnb for good.

Mr Kepnes, who runs the website, argued that Airbnb rentals are no longer a good deal for short-term stays, especially in larger 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, this is because fees can significantly increase the cost of a brief stay, according to Mr. Kepnes. In a February 2020 tweet, he referenced an Airbnb listing with a base rate of $100-a-night and a $200 cleaning fee. “These cleaning charges are very tough. I could even stay in a hotel for that price!” He has written.

Mr Kepnes also objected to Airbnb’s customer service, which he said makes it harder to get a refund. That’s another thing in favor of hotels, he argued.

In addition to the costs, they also have ethical reservations about using short-term rentals in large metropolitan areas. He said that in many large cities, services like Airbnb are taking much-needed housing stock from potential homeowners and long-term renters.

Still, Airbnb can be a good option in more remote areas, especially when bookings hold up for a long time, he said.

An increasing number of travelers could come to Mr Keppens’s conclusion about short versus long bookings. Since the start of the pandemic, Airbnb has seen an increase in long bookings. The company said during its latest earnings release that stays of 28 days or more were up 25 percent in the second quarter of 2022 and nearly 90 percent from the levels recorded in the second quarter of 2019 compared to the same period in 2021.

Bookings of nearly a month or more have become its fastest-growing travel by length, Airbnb said.

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