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Why tourists choose Airbnb over hotels

Daniel Guttentag

Professor Daniel Guttentag, of the Ted Rogers School of Hospitality and Tourism Management, examined why tourists book Airbnb over other accommodations. Photo: Ralston Kwan

Travellers who use Airbnb tend to be motivated by the service’s practical benefits (low cost, convenient location and household amenities), and usually rent entire homes rather than sharing the accommodation with a host, finds a new report released by Ted Rogers School of Management at Ryerson University.

“This is one of the first studies of its kind to examine the motivations of Airbnb tourists,” says Daniel Guttentag, a professor in the Ted Rogers School of Hospitality and Tourism Management. “Airbnb has grown rapidly since its launch in 2008 and has attracted a great deal of attention from the hotel industry, as well as from policymakers who are looking to find ways to regulate the sharing economy.”

To examine the motivations of Airbnb users, Guttentag conducted an online survey between July and October 2015, which was completed by 844 respondents who stayed in an Airbnb accommodation at least once within the previous year. The survey asked participants, mostly from Canada and the U.S., about their motivations for choosing Airbnb, and whether they used the service as a substitute for existing accommodations. The participants were also asked about the purpose of their trip, party size and length of their vacation stay. Finally, the survey also asked how often the tourists booked accommodations on Airbnb and the likelihood they would recommend the service to friends and family members.

Report highlights

  • Tourists are mostly motivated to book Airbnb accommodations because of their low cost, convenient location, and household amenities. They are generally less motivated by the opportunity to interact with the host or other locals, or by the promise of an authentic, local experience. This finding contrasts with Airbnb’s marketing efforts, which focus more on the service’s experiential side.
  • 61 percent chose Airbnb as a substitute for a budget or mid-range hotel.
  • 26 percent indicated that staying with Airbnb led them to increase the length of their trip.
  • 70 percent stayed in an “entire home” rather than in “shared accommodation” together with a host.
  • 89 percent were “satisfied” or “very satisfied” with their most recent Airbnb stay, and 91 per cent were “likely” or “very likely” to recommend Airbnb to others.
  • 62 percent indicated they were “very likely” to use Airbnb again within the following year, compared to just 26 percent who indicated it was “very likely” they book a hotel room within the following year.

Guttentag also identified five types of Airbnb guests based on their comparative motivations for using the service:

Money savers
These travellers choose Airbnb mostly because it is affordable. They are typically young (30 and under) and generally are not travelling with children.

Home seekers
These travellers are primarily interested in the household amenities and large space provided by Airbnb rentals. They almost exclusively stay in entire home rentals. Compared to other Airbnb guests, they tend to be somewhat older, have more education, travel with larger groups, and take longer trips. They also are more frequent Airbnb users.

Collaborative consumers
These travellers are motivated by Airbnb’s sharing economy philosophy, the opportunity to have an authentic experience, and the chance to interact with their host and other locals. They are more likely than other Airbnb guests to be backpacking, and frequently stay in shared accommodations.

Pragmatic novelty seekers
These travellers are drawn to the novelty of Airbnb and the household benefits the accommodations offer. They almost always choose to rent entire homes. They are also not regular Airbnb users.

Interactive novelty seekers
These travellers are attracted by the novelty of Airbnb and by the chance to interact with their host or other locals. They often stay in shared accommodations, and generally have limited experience using Airbnb.

Guttentag says Airbnb presents a unique challenge for hotels. “Airbnb guests expect their accommodations to compare favourably with hotels in many key areas such as cleanliness, comfort, and quality assurance,” says the professor. “However, Airbnb accommodations also often offer the added benefits of being more affordable, providing household amenities and giving guests a local, authentic travel experience.”

So what does the hotel industry have to do to retain its customer base? “Hotels need to rethink what tourists are looking for in their accommodation experience and come up with innovative solutions,” suggests Guttentag. “This may involve developing smaller, cozier properties that are less expensive and located in residential neighbourhoods, or injecting more local character into their lodging offerings.”