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06/18/2024 | News release | Distributed by Public on 06/18/2024 19:06

Choosing between an Airbnb and a Hotel This Summer? Here Are Some Things to Consider

Choosing between an Airbnb and a Hotel This Summer? Here Are Some Things to Consider

School of Hospitality Administration's Makarand Mody weighs in on how to what's best for you

Not sure whether to book a hotel room or an Airbnb this summer? With costs for the two more or less the same, the choice should come down to what you need out of a booking, says SHA associate professor Makarand Mody. Photo via iStock/miniseries

Travel

Choosing between an Airbnb and a Hotel This Summer? Here Are Some Things to Consider

School of Hospitality Administration's Makarand Mody weighs in on how to decide what's best for you

June 18, 2024
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It's official: now that summer is here, travel season has arrived.

According to Statista, the average American takes two to three vacations a year. That adds up to some serious domestic spending: this year, the US travel industry is expected to generate a staggering $2 billion in revenue.

Unless you have friends or family to crash with, there's a good chance you're going to need to book a place to stay while you're away. But what to book?

When Airbnb came onto the scene, the homeshare company was seen as an industry disruptor and a low-cost alternative to hotels. But with tales of horrible customer support and sky-high fees-as well as cities cracking down on short-term rentals-it doesn't have the reputation it used to. Hotels, meanwhile, offer the amenities and services you need while traveling, but lack the charm and ambience of staying in a home. If Airbnb is on the losing end of public opinion, does that mean hotels are having their moment in the sun?

To get some answers on what's going on in the travel world, BU Today spoke to Makarand Mody, associate professor of hospitality marketing at Boston University's School of Hospitality Administration, whose research has included the economic impact of Airbnb and why people choose hotels versus homeshares.

Regardless, one thing is for sure: Post-COVID-19, "travel has made a crazy fierce comeback," Mody says. "The demand in general is so strong for travel, and in hospitality more broadly."

We spoke with Mody and asked him to share some insights into travel trends and advice on what to consider when deciding where to stay.

This interview has been condensed and edited for clarity.

Q&A

with Makarand Mody

BU Today:If you search online, you find no shortage of Airbnb horror stories from both customers and hosts, from double-bookings to the company refusing to issue refunds. What's the deal?

Mody:With Airbnb, COVID-19 was that [definitive] moment for them. They were sailing along for 10 years, during a period of positive economic growth-the economy was good, disposable incomes were high, and people were traveling like crazy. Then COVID-19 hit, and they didn't know what to do. There was a big outcry over [not issuing] refunds, and then issues about [lax] safety at rentals and high cleaning fees. There was definitely an attitude of "this is not a great platform and we're never using it again" online.

And with prices in general going up as they have, for people who were on the fence about staying at an Airbnb versus a hotel, it came down to a diminishing value proposition. The thought was, if I'm going to get services like staff to check me in and housekeeping at hand, then I might as well pay all that money for a hotel versus having to do it myself at an Airbnb. The other piece is cities cracking down on regulations for short-term rentals. I remember searching for Airbnbs in Manhattan in the past, and so many would pop up. Now it's just a handful for the most part. The density has definitely diminished over the last couple of years.

The interesting thing is, though, that Airbnb's numbers don't necessarily tell these stories. The company has been reporting really good quarters all along. Part of that is just the sheer volume of people partaking in hospitality post-lockdowns, which obviously benefits Airbnb.

BU Today:Does that mean the anti-Airbnb hype is at least partially overblown?

Mody:If you think about the psychology of online interactions, the people who tend to complain the most are also the people who tend to post the most online. In general, reviews tend to come from people who either had really good experiences, or really crappy ones. Most people's experiences tend to fall in the middle. I, personally, have never had a crappy Airbnb experience that made me go and shout from the rooftops that the company is the devil-and I think that's the case for most people. If you look at the number of people who are satisfied or highly satisfied with their Airbnb experience, that proportion is significantly higher than those who are dissatisfied. And, again, while we may see more people complaining, that's also because more people are traveling than ever before.

BU Today:All that said, are hotels coming back into the spotlight as a go-to option?

Mody:They definitely have. The financial reports speak for themselves. The big players-the Marriotts and the Hiltons of the world-have been doing really well. I think part of that has been the fact that hotels took a hit in occupancies and revenues before COVID-19, because people were moving away from them towards Airbnb. After the pandemic, things have changed a little bit. People appreciate the sense of safety and the services that hotels offer. Hotels have also been pretty good about reinventing the experience in some ways-I can book a room on an app now. And, with fees being tacked on to Airbnb [partially] as a result of jurisdictions taxing short-term rentals now, the price differential between a hotel and an Airbnb isn't that much. At that point, why not go for the comfort of a hotel, where if something's wrong, someone will fix it for you instantly?

On the hotel side, brands have also gotten smarter at recognizing how people actually travel. Before COVID-19, the hotel room hadn't changed for 50 years, right? Now, let's say you're staying in New York City, for example: How much time do you actually spend in the room? You're there to explore the city. These new hotel brands in particular have realized that they don't need to have such large rooms; they can make those smaller and cut costs, but also make the public space experience much cooler. They can put in cool rooftop bars and create activities and programming in the lobbies to make those thriving spaces. You can't get a rooftop bar at an Airbnb-that becomes the draw to stay at a hotel.

BU Today:So, what should people take into consideration when they're thinking about what to book?

Mody:Some of the research I've done was to find out what the factors are when people choose hotels or Airbnbs. Whatever their choice, we found that what people consistently look for is quality and service. People look for good reviews, how many stars a host or hotel has-if something is below four stars, that won't even be considered by most people-how many people have stayed at a place before, and for indicators that a booking is at a welcoming space.

I think, at this point, the dynamics of "Am I largely an Airbnb customer or a hotel customer? Or am I still that person who determines every time I travel which one I want to stay at?" have pretty much settled out for most people. So, it's hard to say what people should be looking out for, but I think the biggest takeaway should be what your biggest need is at that point in time, and whether a homeshare or a hotel would best fulfill that need. For example, I have a three-year-old and another one on the way. When I travel, it's my once-a-year trip. There's never a thought in my mind about home-sharing-I don't want to cook my own food. I want turndown service and someone to run out to get milk for my child. As far as service is concerned, it's hotels all the way for me.

But a few years ago, I would totally look into Airbnb and cool [off-the-beaten-path] experiences. And if I was traveling with another family or two, and taking all our kids on vacation, I might actually consider renting a large home with a private pool so we can spread out but still be together. In general, it's super circumstantial.

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  • Alene Bouranova

    Writer/Editor Twitter Profile

    Alene Bouranova is a Pacific Northwest native and a BU alum (COM'16). After earning a BS in journalism, she spent four years at Boston magazine writing, copyediting, and managing production for all publications. These days, she covers campus happenings, current events, and more for BU Today. Fun fact: she's still using her Terrier card from 2013. When she's not writing about campus, she's trying to lose her Terrier card so BU will give her a new one. She lives in Cambridge with her plants. Profile

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