Since 2007, Airbnb has welcomed travelers from nearly every country in the world to a new and ground-breaking form of accommodation. It’s also given property owners the opportunity to turn their residences and private rooms into income-generating vacation homes.
Why do hosts and travelers alike choose Airbnb, and how does it compare to other major online booking sites?
And above all – what does Airbnb’s future look like amidst a pandemic that has shaken most of the hotel industry?
What makes Airbnb different from competitors?
Airbnb is an international accommodation company and vacation rental platform trusted by homeowners and travelers around the world. With more than 4 million hosts in 220+ countries worldwide, Airbnb is unique from the typical hotel experience.
Founded in San Francisco in 2007, Airbnb revolutionized the vacation rental industry by making the community-based, home-sharing business model mainstream. From a condo in Florida to a private room in New York, a flat in London, or a luxury vacation home in Los Angeles, short-term rental accommodation providers now have a trusted platform to access the vacation rental market.
Airbnb prides itself on allowing guests to “experience the world in an authentic, connected way” by letting them stay in a living space rented out and hosted by a local.
Why do people use Airbnb?
For vacation rental hosts:
Renting your home to others can be an excellent way to earn extra income. On average, Airbnb hosts can make as much as $924 each month, with nearly 50% of all hosts making more than $500 per month.
Furthermore, it’s a lot more flexible than running a hotel, as you can decide your own cancellation policy, when you want to open your home to travelers, and whether you want to rent the whole unit or just a room. Property owners can even host their guests remotely using contactless technologies like mobile entry apps for remote check-in, smart temperature control, and even noise monitoring services. And with booking fees easily collected online with secure credit card processing, receiving payments can be done without a hassle.
As an Airbnb host, you also have free insurance in case something in your home gets damaged. Airbnb insurance includes:
- Liability coverage worth $1 million
- Damage protection for your valuables
- Expenses for unexpected cleaning costs
- Pet damage protection
- Income loss protection due to damages done by a guest
Compared with staying at a hotel, booking a vacation rental is not only more affordable in many cases – it also gives you the unique opportunity for a more local experience. There are also many unique properties on Airbnb for travelers looking for an experience different from the standard hotel room.
Especially during the COVID-19 pandemic, guests could rent an entire unit to themselves and avoid contact with other people. In fact, the vacation rental marketplace excelled during the pandemic, even while hotels were low on occupancy.
What is the price range for Airbnb?
Airbnb includes a service fee for both guests and hosts – guests pay a mandatory service fee of 14%, while hosts pay 3% of the booking subtotal (nightly rate + your cleaning fee, but not including Airbnb taxes and fees). The service fee covers the cost of Airbnb services like:
- 24/7 multi-language customer support
- Resources for the Hosts Education Program
- Marketing through Google and social media
- Damage protection
Hosts who are wondering how they should price their properties can get a property management system (PMS) with an integrated revenue management tool to help track the local vacation rental market and optimize pricing accordingly.
What is the future outlook for Airbnb and its competitors?
In short, the future for Airbnb and vacation rental properties looks promising.
In July 2020, Cloudbeds enlisted the help of leading benchmarking and data insights providers STR and AirDNA to analyze hotel and short-term rentals data from 2019 to June 27th, 2020 in 27 markets globally, including 12 regional destination markets and 15 urban markets.
The data showed that despite the low rates for hotel rooms, vacation rentals were more popular, with an occupancy rate of 58%, compared to the hotel room occupancy rate of 39%.
But why is this?
One reason is that vacation rentals offer a unique type of accommodation where guests are in control of their living space and can safely isolate themselves from other people. Many rental properties exist in remote, outdoorsy locations where people can easily escape their small urban dwellings for open space and fresh air.
Furthermore, as was reported in a recent Cloudbeds webinar on OTAs, Metasearch, and the Future of Distribution, leisure travel is still dominating over corporate travel and vacation rentals traditionally cater to a leisure travel market. Still, Skift notes that startups are now spending more on Airbnb than on office rent as “venture-funded startups in the USA are swapping offices for team trips as their leases expire.”
In particular, long-term stays of 28 days or more went up during the second quarter of 2021, with Airbnb’s founder Brian Chesky believing that remote working trends were here to stay.
With travel restrictions and demand still fluctuating as we enter another year, we’ll have to see where the market goes, but from past evidence, the vacation rental properties are in a good position to gain a share of the market.
How does Airbnb compare to other rental sites?
As trusted and well-known as Airbnb is, there are similar property rental websites. Some Airbnb alternatives offer extra benefits, while others have specialized in catering to a particular type of visitor.
Global Airbnb competitors
Part of the HomeAway group, Vrbo (originally known as “Vacation Rentals”) is the world’s second-largest short-term rental company, next to Airbnb. Primarily targeting families, Vrbo has 2 million listings worldwide – from apartments to villas.
Since Vrbo is owned by HomeAway, which is a part of the Expedia group, if you list one of your properties on Vrbo, it will automatically be cross-listed on Expedia. This saves you the trouble of having to make a separate listing.
Despite this, however, Vrbo has fewer listings compared to Airbnb’s +6 million. You also can’t list shared spaces on Vrbo – something you can do on Airbnb.
With over 350,000 home rentals from luxurious villas on the Spanish coast to studio apartments in Paris, Wimdu boasts “the largest selection of vacation rentals worldwide.”
While this number is impressive, the listings are still much smaller than Airbnb’s.
Since Wimdu is based in Germany, the company also attracts more travelers from Europe. Wimdu is powered by HomeToGo, a search engine for vacation rentals that also operates Tripping.com
Part of The Priceline Group, which owns the Kayak brand, Booking.com is one of the world’s largest and most well-known online travel agencies with listings in 227 countries and support in over 40 languages. It is headquartered in Amsterdam but has a strong global presence.
Unlike Airbnb, Booking.com emphasizes traditional hotel rooms instead of living spaces hosted by locals. Still, it’s a good place to get visibility on your property.
The owner of large sites like Hotels.com and Trivago, Expedia is one of the largest online travel agents – attracting millions of bookings each year. As such, a property listing on Expedia’s website offers excellent visibility.
Expedia also offers hotels, car rentals, and flights so it caters to a much larger audience than other Airbnb alternatives that only focus on short-term rentals.
At 510,000 listings, Expedia’s listings are fewer than that of Airbnb. Expedia also charges a much higher commission rate of 16.5%.
Tripadvisor is primarily known for reviews of hotels, restaurants, and activities, but it also features an accommodation listing directory and specialized tours.
TripAdvisor also includes HouseTrip, HolidayLettings, and Flipkey – three sites that boast the largest selection of holiday home rentals in the world.
Because of this, the number of listings on TripAdvisor is much larger than Airbnb – over 7.3 million (including accommodation, airlines, restaurants, etc.)
Like Expedia, TripAdvisor charges a higher commission fee of 15% for a listing.
The leading online travel booking site in Asia, Agoda is a Singapore-based travel agency with 2 million property listings including both hotels and private homes.
At 16%, Agoda’s commission fee is higher than Airbnb’s. In addition to accommodations, Agoda also offers airport transfer services and a loyalty program known as “PointsMAX,“ where travelers can earn points for each booking they make.
These points can then be spent on things like discounted airline tickets.
Another Singapore-based online travel agency, Trip.com, has over 1.4 million hotels in 200 countries and regions.
In addition to accommodation, Trip.com also offers car rentals through some of the world’s largest car rental companies, including Hertz, Avis, and Europcar.
Compared to Airbnb’s maximum period of stay, which allows for stays longer than 30 days, properties listed on Trip.com have a maximum stay period of 30 days.
GlampingHub is a site set up specifically to promote glamping (i.e., luxury-style camping accommodations with upscale amenities and services) and eco-friendly travel.
The company has over 22,000 campsites, ranches, and unique accommodation options – guests can rent anything from luxury treehouses to traditional Mongolian Yurt tents and even train cabooses converted into living spaces.
GlampingHub differs from Airbnb in the sense that they focus on glamping and outdoor-style accommodations.
Regional Airbnb competitors
One of the largest online travel agents in Asia, Traveloka has about 100,000 listings on its website (mostly in Asia), including hotels, guest houses, and even homestays.
Unlike Airbnb, Traveloka has fewer listings and a smaller audience of about 50 million people. Despite this, however, they also offer car rentals and airport transfer services.
Known as Decolar in Brazil and Despegar throughout the rest of Latin America, this site is one of Latin America’s most experienced travel agencies with listings worldwide.
Aside from accommodation, Despegar also offers car rentals, flights, and accommodation travel packages.
While Airbnb emphasizes home rentals, Despegar is mostly a traditional travel agent. However, they have a growing inventory of houses and apartments for rent and offer a lot of visibility for travelers in Latin America.
Based in Barcelona, eDreams (part of the ODIGEO group) is one of the world’s leading online travel brands, operating in 40 countries and serving 18 million customers. They have a big presence in Europe. eDreams also offers a wide selection of flights, hotel packages, car rentals, and vacation homes.
In comparison to Airbnb, eDreams still has a heavier hotel-based inventory. However, much like many other OTAs today, their inventory of short-term rentals and vacation homes is growing.
PegiPegi is an Indonesia-based OTA with a listing directory of over 25,000 hotels and 7,500 travel guides. Most of the hotels and destinations listed in their directory are located in Indonesia. Their listings include guest houses, cottages, and serviced apartments.
PegiPegi primarily targets Indonesian travelers and doesn’t have the same global presence that Airbnb does.
Officially known as “Rakuten Travel Xchange,” this site has almost 700,000 accommodation listings, from traditional hotels to rental properties.
Rakuten has a particularly strong presence in Japan, and although it has listings in a total of 200 countries, its global brand awareness isn’t as strong as Airbnb.
Aside from that, out of the 700,000 properties listed on Rakuten’s website, 500,000 of those are of traditional hotels.
On their website, Riparide states their goal is to “inspire people to unplug from modern-day trappings and find fulfillment in nature.”
In addition to nature-inspired short-term rental accommodations, Riparide also features “Riparide Stories,” – a type of travel story where other guests share their experiences and what they did during their stay.
As Riparide only has listings in Australia, they don’t have the same global presence as Airbnb.
Niche Airbnb Competitors
Certain companies have created niche websites with inventory meant to attract guests seeking unique properties. Like Airbnb, they too offer accommodation, albeit for people with a specific interest.
Anyplace is very similar to Airbnb in many ways – it also offers fully furnished co-living spaces that people can rent for a more local experience.
Unlike Airbnb, however, Anyplace has begun narrowing down their inventory to apartments specifically made to attract the increasing amount of remote workers in the last few years.
Coliving.com offers accommodation based on the principle of “the value of community.” In addition to their living spaces, Coliving.com provides plenty of opportunities for business networking or to make new friends during your stay.
In addition to their opportunities for socializing, Coliving.com’s prices include cleaning and laundry services – something Airbnb charges extra for.
With 6 million homes available for rent, 9flats can be considered the European version of Airbnb, offering apartments, guest houses, rooms, and more.
However, compared with Airbnb, the audience of 9flats is much smaller – below 1 million.
18. Instant World Booking
With accommodations in over 5000 cities worldwide, Instant World Booking is an OTA that prides itself on the adventure that travel brings.
Their listings include unique and affordable hotels, hostels, and apartments around the world.
Founded in Barcelona in 2003, Only-Apartments specializes in short-term rental accommodations including apartments, holiday rentals, and aparthotels. Currently, their inventory includes more than 150,000 accommodations spread over 120 countries around the world.
Though their inventory is only a small fraction of Airbnb’s, Only-Apartments has a global presence in a niche market that includes many desirable destinations in Europe and the US.
20. Habicus Group
Habicus Group is a leading provider of serviced apartments with an extensive corporate and private client base. They specialize in providing comfortable and luxury serviced apartments for business travelers.
Compared to Airbnb which attracts mainly vacationers, Habicus Group offers short-term rental providers the unique opportunity to book business travelers.
Whether through Airbnb or one of the many Airbnb competitors and alternatives, renting out your living space is an excellent way to bring in some extra income each month.
Cloudbeds helps hoteliers and hosts start, grow, and run their lodging business successfully.