Why hotels are going extinct
Photo courtesy of REUTERS/Dado Ruvic
Hospitality, while a vital industry, is an ever-changing one. Post-pandemic, the industry has changed permanently. According to Arun Upneja, the dean of Boston University’s School of Hospitality, “... New models have to come up, and we have to reset our expectations.” “New models” refers to self-sufficient rental platforms like Airbnb and Vrbo which have flourished throughout the pandemic and have continued to rise in popularity over staffed hotels. Many attribute the main reason for the swap in service to pricing differences, but that’s only a chunk of it.
Price point-wise, there isn’t a monumental difference. I recently stayed at the CitizenM hotel located near South Station in Boston, Massachusetts, and spent $223 for a two-night stay, which comes out to $111.50 per night. While the hotel has an admittedly great atmosphere, the rooms aren’t large by any means. In comparison, Airbnb has hundreds of options for the same area, ranging from $50 to over $200 a night. One can find a dwelling that suits them perfectly with far more space than hotels offer. So, while pricing at these rentals can be better, the larger reason why travelers prefer them is the freedom that comes with them.
Airbnbs don’t have housekeeping services like hotels do, though there’s typically a cleaning fee involved in one’s billing that is set by the hosts. In most cases, the only people that are residing with you are the guests you bring along. An Airbnb report states, “Over 60% of U.S. hosts say they rent out their primary home while they’re on vacation.” So, many hosts rent out their entire living space while they aren’t there. With the exception of long-term stay hotels, guests at rental spaces generally have access to a much larger space that can include a full kitchen, living room and other amenities.
According to the American Hotel and Lodging Association, American hotels vary by size depending on the type of hotel. Their survey found that “luxury hotels in the United States have an average room size of 375 square feet, while midscale hotels have an average room size of 308 square feet and economy hotels have an average room size of 245 square feet.”
The majority of surveyed hosts are renting out their primary residences, meaning houses. Airbnb gathered data from Q4 of 2022 showing that for the price of one bedroom at a Marriott, Hyatt or Hilton hotel, families could get a two-bed, two-bath Airbnb. If I’m paying nearly a hundred dollars a night to stay in a one-bed and one-bath hotel room surrounded by other guests and the alternative is a private house to myself with multiple bedrooms and bathrooms, I’m taking the latter every time. The bang for your buck is in rentals, not the hotel rooms of days past.
Airbnb and Vrbo also provide unique rentals that corporate hotel chains simply cannot compete with. Vrbo’s booking site offers stays at bed and breakfasts, villas, cabins and lodges, as well as various houseboats and yachts. Good Housekeeping published an article on the most unique Airbnb properties in every state, which included yurts and domes as well as historical homes. In each of these examples, the stay is an experience for the whole family, one that differs greatly from traditional hotels which feel more like a rest station than a living space – popping back in to change before leaving again, hopping in for a quick shower and getting ready frantically.
The era of rentals is now; hotels simply cannot keep up with all they have to offer, including better price points, more space and a vaster array of options. In today’s world, more is better, which is why Airbnb, Vrbo and various other rental platforms will continue to rise in popularity over the hotel chains of the past.
