The cost of a stay: has Airbnb lost its competitive advantage in terms of price?
Higher rates, expensive service fees, and more threaten Airbnb’s reputation as a cheaper alternative to hotel stays.
Rates on the accommodation platform have increased by up to 45% for summer stays in the UK, with some basic NI coastal properties costing over £ 2,000 for a week’s stay for a basic twin in Coleraine.
Another property in Coleraine – a two bed apartment – costs £ 2,150 for a week stay in August, including a £ 300 ‘service charge’ and a three bed property, also in the vicinity of Coleraine , charges £ 500 per night with an additional service charge of £ 593.
Prices elsewhere in the NI showed similar cost increases with a 3 bed apartment near Belfast offering rates of £ 460 per day.
Airbnb received backlash in the United States for similar price hike patterns earlier in the year, with users saying what was once a cheaper alternative to staying in a hotel has become a more expensive arrangement.
Research of the online vacation rental market has shown that since Boris Johnson announced the exit from England’s roadmap, Airbnb searches have increased dramatically, with rural properties gaining the most interest. Searches peaked in April at around 13m compared to around 10m for the same period in 2019.
He said average daily rates had also increased in rural areas, by more than 60% in some places compared to 2019 rates.
Rising demand for non-urban housing, with vacations remaining the most viable vacation option, is driving the hikes, as well as the increased number of families using the platform.
Airbnb said: “Summer trips on Airbnb were mostly smaller groups visiting big cities. But this summer, the most popular type of trip is for families flocking to distant destinations from their big-city homes. In fact, family travel has gone from 27% of total nights booked in summer 2019 to 33% in summer 2021; and of these family trips, 42% of nights booked are in rural destinations, up from 32% in summer 2019. ”
According to which? The brand that promotes fair consumer choice, “after tracking prices from 15 independent properties in 10 popular UK resorts on Airbnb and Vrbo over the past year, Which? noticed price increases on each property. The average increase was 35% for holiday dates in July and August, but one Airbnb Brighton owner increased his price per night by 140% ”.
Fiona Taylor, a former Belfast-based Airbnb host, said the hikes allowed hosts to compete and recoup lost earnings. She explained, “When setting up the cost per night and service charge, Airbnb provides a guideline price based on other similar properties in the area, but the host can set the charge at whatever price they want.
“It can be fair because it allows you to be competitive. If, for example, there is a music concert in the area, the demand for accommodation will be higher and the host might increase the price. I think like in any market the prices will be as high as what people are willing to pay. “
Airbnb did not respond to a request for comment on fair price increases, but its Help Center says the price for a reservation on Airbnb is based on the nightly rate set by the host, plus the addition of other fees or costs determined by the host or Airbnb. These may include service charges, cleaning fees, additional guest fees, security deposits, VAT, and local taxes.
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