Rising cleaning costs have caused former Airbnb guests to return to hotels.

Airbnb users are dealing with changes in the financial aspect of renting for short periods of time.

November 30th 2024.

Rising cleaning costs have caused former Airbnb guests to return to hotels.
Over the years, Airbnb has been a popular choice for travelers looking for affordable and homely accommodations. Whether it's a cozy Victorian home or a chic downtown loft, the options offered by this short-term rental app have been well-received by its loyal users. In fact, Denver, with its diverse range of over 1,000 active listings, was even listed as one of Airbnb's top 10 cities with the most adventurous travelers in 2023. Along with Houston and Atlanta, Denver's Airbnb guests were found to have visited nearly 80% of the counties in the U.S.

However, in recent times, many users have started to notice a shift in the economics of short-term rentals. The cost of an Airbnb has risen to the point where it's often no longer a cheaper option than a traditional hotel. Jack Hahne, a resident of New York, experienced this firsthand during his solo road trip across the country. He found that in most cases, the prices were comparable, if not higher, than a hotel. Plus, the flexibility of check-in times was often lacking.

Hahne, who had visited Denver back in 2016 and paid a mere $41 a night to stay in someone's basement apartment on an air mattress, couldn't imagine getting the same deal in 2024. He noticed a change in the type of listings on Airbnb, with more absentee landlords and fewer opportunities for social interactions with the hosts. The total price for an Airbnb reservation is determined by the nightly price set by the host, along with additional fees and costs decided by either the host or Airbnb.

Apart from the service fees and local taxes, hosts may also charge for cleaning, extra guests, and even pets. A recent search revealed a guest suite in Denver for just $55 per night, but the total cost for a two-night weekend stay ended up being $254.25 due to hidden fees. Another listing for an entire home in Englewood, a suburb of Denver, came with a cleaning fee that was nearly the same as the one-night stay itself, resulting in a total cost of over $470 for a two-night stay.

Nicole Hernandez, a resident of Washington state, has been using Airbnb for both international and domestic travel for years. She initially appreciated the opportunity to find affordable accommodations that were more connected to the local community. However, she has noticed a significant increase in prices and a more commercialized approach from Airbnb. While she doesn't mind paying reasonable cleaning fees, she has come across some that are higher than the total nightly fee, which she finds ridiculous.

According to Airbnb's internal survey, guests spent an estimated $210 per day during their trip in 2023, with 40% of the spending going towards the neighborhood of their rental. In comparison, the average daily rate for a hotel in 2023 was $159.99 nationwide and $149.48 in Denver. On an earnings call in May, Airbnb's CEO Brian Chesky acknowledged the concerns about rising prices and revealed that the company had introduced tools to help hosts compare their prices with others in their area. This has led to a decrease in cleaning fees for 300,000 hosts and a decrease in the average daily rate for Airbnb stays in Denver.

Despite the changes in pricing, Airbnb continues to be a popular choice for travelers from all over the world. In 2023, guests traveled to over 100,000 cities and towns in more than 200 countries and regions. The company also contributed significantly to the economy, generating over $85 billion in economic impact across the U.S. and contributing $3 billion to Colorado's GDP. With its unique and diverse accommodations, Airbnb remains a top choice for travelers looking for a home away from home.
In the bustling city of Denver, Airbnb has been a go-to for travelers seeking affordable and homey accommodations for quite some time. It's been a popular alternative to the traditional, corporate-owned chain hotels, offering a diverse range of options such as charming downtown lofts and cozy Victorian homes. With over 1,000 active listings in Denver alone, it's no surprise that the city was listed as one of the top 10 U.S. cities with the most adventurous Airbnb guests in 2023, tied with Houston and Atlanta. In fact, these adventurous Denver guests have visited nearly 80% of the counties in the U.S. – talk about exploration!

However, as of late, many Airbnb users have found themselves struggling with the shifting economics of short-term rentals. The cost of an Airbnb stay has increased significantly, to the point where it's often no longer a cheaper option than a traditional hotel. This has been the case for New York resident Jack Hahne, who recently completed a solo road trip across the country. He shared his experience, saying, "For a lot of the cases, either the price was about the same, maybe a little cheaper, but just wasn't as convenient as a hotel would be in terms of flexibility of check-in times."

Hahne's first visit to Denver in 2016 cost him a mere $41 per night to stay on an air mattress in someone's basement apartment – an experience that he couldn't imagine happening in 2024. He noticed a shift in the type of listings on Airbnb, saying, "When I think about Airbnb now, a lot of it is more kind of absentee landlords... Back in 2015, 2016 – there was a lot more to like the social aspect of it. Where it's just some guy who was renting out a bedroom."

The total cost of an Airbnb reservation is determined by the host's nightly price, plus additional fees such as cleaning, extra guests, and pets. These fees can add up quickly, sometimes even surpassing the original nightly price. A recent search revealed a guest suite in Denver for only $55 per night, but the total cost for a two-night weekend stay ended up being $254.25 due to hidden fees. Another listing, an entire home in Englewood just seven miles away from Denver, had a cleaning fee nearly equal to the one-night stay – a total cost of over $470 after fees.

Nicole Hernandez, a Washington state resident and frequent Airbnb user, has also noticed a change in pricing. She shared, "When I first started using Airbnb, it felt like I could find a good deal on accommodations while staying in a less commercial place that was more connected to the community." However, as time has passed, she's noticed a significant increase in prices and a shift towards more commercialized listings. She doesn't mind paying reasonable fees, such as cleaning fees, but has encountered some that were more than the total nightly fee – something she finds "ridiculous."

According to data from an internal Airbnb survey, guests spent an estimated $210 per day during their trip in 2023, with 40% of their spending in the neighborhood of their listing. In comparison, the average daily rate for a hotel in 2023 was $159.99 nationwide and $149.48 in Denver. On a recent earnings call, Airbnb's Co-founder and CEO, Brian Chesky, addressed concerns about increasing prices and low booking rates for some hosts. He shared, "So we created a tool called the compare listing tool, where people can see how much other people are charging in the neighborhood... The people getting booked generally have lower prices." This tool has been used by 2 million hosts and has led to 300,000 of them removing or lowering their cleaning fees.

To combat the issue of hidden fees and increasing prices, Airbnb has also introduced weekly and monthly discounts, as well as a total price display that allows users to see the total cost before and after fees. Chesky stressed the importance of maintaining their original value proposition, saying, "When we started Airbnb, our original tagline was a cheap affordable alternative to a hotel. And the majority – the primary reason people came to us is because it was a better value than a hotel."

Despite the challenges that Airbnb users have faced with increasing prices and hidden fees, the company has still made a significant impact on the travel industry. In 2023, guests traveled to over 100,000 cities and towns across 200 countries and regions, generating over $85 billion in economic impact in the U.S. alone. In Colorado, Airbnb contributed over $3 billion to the state's GDP, generated $932 million in tax revenue, and supported 34,300 jobs. As Chesky put it, "We host people from all across the world."

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