Airbnb used to be one of the most affordable options for travelers but now it has become one of the most expensive.
They had some really good deals going on! But now? Why are they so expensive AF??
I mean, we’re talking about an increase in prices by almost 300%! That’s outrageous. So why is this?
In this post, I am going to give you my best guesses as to why Airbnb has been so expensive lately.
Airbnb is aiming for profitability
While Airbnb’s revenue plummeted by 30% in 2020 due to the coronavirus pandemic, a recent report by The New York Times uncovered that “the average daily rate of an Airbnb rental increased 35 percent in the first quarter of 2021.”
The company is aiming for profitability as it focuses on its service of providing an easy-to-use platform that can be more profitable than hotels.
Airbnb has grown tremendously since the last few years, with a significant number of properties added to their inventory and different prices available because “the average room rate increased by 80 percent.”
The increase in rates may have been due to Airbnb’s new pricing model which allows people who own residential or commercial property to charge higher rates when they are not using them.
As well, according to another report from Bloomberg News, this could also include those who live at home full time, but rent out space like extra bedrooms or living rooms while away from home. Finally, there might be an Airbnb bubble in the making, with many properties now being bought just to be rented out.
Summer Demand Has Increased
We are in the height of summer and this is when vacationers want to escape their busy lives. But there has been a shortage of available listings for rentals, causing rates on Airbnb to surge with some properties costing up to $6,000 per week!
The demand for rentals during peak seasons can have devastating effects on prices as they reach an all-time high.
Everyone wants to be someplace else this summer and that’s totally understandable. So, with so much demand this summer, rates are going to be higher. But, will this be indefinite?
Some Airbnb renters have found that they can no longer afford to stay in their destinations of choice, which has caused them to turn to other platforms. Airbnb rentals are now about 40% pricier than when the platform first started. What used to be a place for budget-conscious travelers is now more expensive than before due to higher demand during peak times like Summer 2021.
Airbnb Expensive? It’s Those Fees!
Have you seen what Airbnb hosts are charging nowadays for service and cleaning fees?
What about everyone requesting a security deposit and a pet fee to book their place?
Don’t get me wrong…I get why hosts are trying to protect their property and belongings. But, at the same time, these hosts are pricing themselves out of the competition. Where Airbnb was the most likely option for budget travelers and travelers looking for unique accommodations, are now opting to return to hostels and hotels.
We used to book one-week stays for less than $500 and now… they are running over $1000 for the same duration.
Airbnb used to be the go-to platform for most travelers because it was inexpensive. But now! Airbnb has skyrocketed in price, and we are not sure why. Airbnbs that were once $100 a night now routinely cost over $200 per night even when no holiday or event is happening nearby. What happened?
CEO Brian Chesky (MarketWatch) “stressed that Airbnb sets one fee but hosts set their own cleaning fees. He said the company has more than 5.7 million listings, and that ‘in many cases, the value is amazing.’ We are working with hosts so prices don’t get out of whack.”
Well, we just hope that we find more affordable options in the next several months. We shouldn’t have to let go of value for the cost.