Airbnb vs. hotels — which is better for your budget?

Airbnb vs hotel
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Although prices are high due to inflation, many still plan on traveling for the Christmas holiday. Therefore, finding ways to save on travel costs (opens in new tab) are important this year, and can be done in a variety of ways. One way to save money when traveling is to choose the right accommodation. Decide which is more cost effective for your specific plans, hotel or Airbnb? 

Deciding whether a hotel or Airbnb is more cost effective depends on different factors influencing your trip, such as how long you’re staying and how many people you’re traveling with. Keep reading to determine which is the best choice for your upcoming travels. 

Length of stay

Woman packing clothes in suitcase

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To start, take into account how long your trip is going to be. Are you going somewhere for two days or a whole week? The answer to this question can help you narrow down which option is a better financial decision. 

Staying in an Airbnb will end up being more expensive if you’re only renting it for a short stay. In fact, the nightly rate for a seven night stay in an Airbnb is 32% (opens in new tab) cheaper than the rate for a single night. Booked monthly, that nightly discount is 46% (opens in new tab) cheaper compared to a one night stay.

Longer stays are cheaper for a few reasons. Typically, Airbnbs carry a pretty steep cleaning fee, regardless of how long your stay ends up being. Additionally, longer stays can sometimes incur less occupancy taxes. 

Group size 

group of people at an outdoor bar

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If you’re traveling with a large group, you’ll likely find an Airbnb to be more cost effective. Many Airbnbs can hold a large capacity of people, which will typically be cheaper than having to book multiple hotel rooms. Additionally, large groups would likely prefer accommodations in an Airbnb as they offer communal spaces like living rooms, dining rooms and kitchens, which can be more comfortable than hotel lobbies or crowding into one hotel room. 

If you’re traveling alone, or with your partner, you should compare prices between Airbnbs and hotels. Especially if you want the privacy of booking an entire place on Airbnb, and not sharing a space with others, opting for a hotel could be a cheaper option. Here’s a median cost breakdown from NerdWallet (opens in new tab):

  • Small Airbnb (fits two adults): $125
  • Large Airbnb (fits six adults): $60
  • Hotel room (fits two adults): $89

Amenities  

Built-in hot tub

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For some travelers, amenities associated with a hotel can make it a more cost effective option. Many hotels offer amenities like pools, saunas or full gyms, not to mention free breakfasts, free coffee and 24/7 concierge services. While some Airbnbs are equipped with similar amenities, they’re typically very expensive. You’ll be better off staying in a hotel if these are deal breakers for your stay.  

Dining options

White kitchen

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Another reason Airbnbs can be more cost efficient, especially on longer stays, is that many are equipped with a full kitchen. This means you’ll be able to cook your own food, instead of eating out for every meal. Especially in big cities where even a coffee is expensive, this could save you a lot of cash over the course of your stay.  

Bottom Line

Deciding if a hotel or Airbnb is more cost effective depends on a number of factors. You’ll need to take into account how long your stay is, how many people you’re traveling with and which amenities you can’t live without. Typically, Airbnbs are more cost efficient for larger groups and longer stays. But hotels usually tend to be cheaper for solo travelers or those only needing a room for a single night.  

Erin Bendig
Staff writer, personal finance

Erin pairs personal experience with research and is passionate about sharing personal finance advice with others. Previously, she was a freelancer focusing on the credit card side of finance, but has branched out since then to cover other aspects of personal finance. Erin is well-versed in traditional media with reporting, interviewing and research, as well as using graphic design and video and audio storytelling to share with her readers.