Hotel vs Short-Term Rental: Why Guests Book the Hotel

Title: Hotel vs Short-Term Rental: Why Guests Book the Hotel Publication: [RSU by PriceLabs](/resources/people/rsu-by-pricelabs) URL: https://www.rentalscaleup.com/independent-hotel-vs-short-term-rental/

A PriceLabs report surveying 1,082 travelers across the US, UK, France, Spain, and Portugal reveals that when travelers directly compare a hotel and a short-term rental (STR) for the same trip, 60% choose the hotel, while only 35% book the rental.

While 62% of travelers still decide on their accommodation type before searching, cross-category comparison is rising as Online Travel Agencies (OTAs) increasingly display hotels and homes side by side. On Booking.com, 45% of guests compared multiple accommodation types, compared to 29% of direct-booking guests.

When asked what would make them choose a hotel over an STR, travelers highlighted four key factors:

1. Better location (44%)
2. Breakfast included (38%)
3. Free cancellation (31%)
4. No extra fees (29%)

As major booking platforms blur the lines between inventory types—with Airbnb integrating independent hotels, Booking.com displaying mixed results, and Expedia bundling Vrbo homes into travel packages—STR operators are increasingly competing directly with hotels.

While location and breakfast are difficult for STRs to modify, cancellation policies and fee structures are entirely within an operator's control. High, flat cleaning fees create significant "sticker shock" on short stays, making hotels look cheaper at checkout and driving travelers away from rentals.

• The Comparison Split: 60% of comparing travelers book the hotel; 35% book the rental.
• The OTA Effect: 45% of Booking.com users compare different accommodation types, a trend likely to expand to Airbnb and Expedia as they mix inventory.
• Price Perception Gap: 25% of STR guests assume hotels cost more, and 21% of hotel guests assume rentals cost more. However, hidden fees at checkout often erase the rental's perceived price advantage.
• The Short-Stay Fee Penalty: A flat $150 cleaning fee adds $75 per night to a two-night stay, but only $15 per night to a ten-night stay.

For STR operators and technology vendors, this data highlights a critical need to adapt pricing and policy strategies to match hotel flexibility. To remain competitive on multi-inventory OTAs, operators should:

• Audit Local Hotel Competition: Benchmark total stay costs (including fees) against local hotels, particularly for 1-to-3-night stays.
• Restructure Cleaning Fees: Consider lowering flat cleaning fees for short stays and absorbing the difference into the nightly rate to reduce checkout abandonment.
• Test Flexible Cancellations: Implement and test more flexible cancellation policies, especially for blended business-and-leisure ("bleisure") bookings where cross-comparison is highest.
• Highlight Unique Value: Use listing titles and primary photos to immediately showcase features hotels cannot easily replicate, such as full kitchens, private outdoor spaces, and multiple bedrooms.

https://www.rentalscaleup.com/independent-hotel-vs-short-term-rental/