Select Page

Since Airbnb disrupted the hotel industry, some have suggested that the company should be regulated like other hotel operators. It has also argued that its business model does not violate tax laws.

Some companies, such as Hilton, have claimed that there’s a difference between Airbnb and their hotels. They said that the latter focuses more on hospitality while the former is a lodging company. However, in the age of Internet disruption, it might be assumed that the rise of Airbnb has negatively affected the hotel industry.

Understanding the various factors that affect the price structure of Airbnb and the hotel industry will help you understand the differences between the two.

Airbnbs

Since its establishment in 2008, Airbnb has been able to grow rapidly. In 2020, it was estimated that it had revenues of around $3.4 billion. However, it has been struggling due to the COVID-19 pandemic. 

The business model of Airbnb is centered on a marketplace where hosts and guests can exchange their homes for money. Hosts and guests can build trust with each other and the users through the platform.

It is worth noting that Airbnb has faced a recent backlash. Many customers are expressing exhaustion at the sheer number of hidden fees. In response, Airbnb has promised higher transparency when searching for and booking reservations.

Hotels

Due to the high cost of living in major cities, hotels and hosts have to consider the rent and other factors that affect the price of a property. 

A hotel room may provide consumers with a variety of comfort levels. On the other hand, an apartment may offer the same luxuries but with a larger living space and kitchen. For families or groups, accommodations may be limited due to certain factors.

Differences

One of the main differences between Airbnb and the hotel industry is the type of regulations and taxes that apply to short-term rental accommodations. In New York, for instance, the term “hotel” refers to establishments such as motels, inns, B&Bs, apartments, and hotels. These types of rentals are required to collect taxes based on the room’s value. In addition, hotels in the city are required to charge a fee of $1.50 per day.