Airbnb rentals can be a great alternative to hotels, not least because they’re often cheaper.
As the company expands it’s reach into the global tourist market an ever increasing number of cities have hosts making their properties available to rent through the company.
For travellers on a budget the choice of destination is often heavily weighted on cost of accommodation, one of the largest expenditure of any holiday.
So where can you find the cheapest Airbnb rentals?
Methodology
To draw up a list of cities for comparison I turned to GoEuro’s “Accommodation Price Index” published in 2016 (using data from 2014). This list of 150 cities consists of the top tourist destinations chosen based on several factors including hotel availability and size of hospitality industry.
I then turned to Airdna for data on Airbnb rentals. I examined the average nightly cost of “Entire place” studio, one, and two bedroomed rentals on Airbnb (house and apartment) during the month of Feb 2016 (May 2016 for cleaning rates) for the cities collected from GoEuro. Airdna had data for 87 of the 150 cities listed on the Accommodation Price Index.
Many listings on Airbnb are not actively rented. Airdna has defined its own definition of what constitutes an “active” property. I am only considering “active” properties in this post, although admittedly I’m not 100% sure of the definition.
| Rank (most active rentals) | City | Active rentals total Feb16 |
|---|---|---|
| 1 | London, UK | 29718 |
| 2 | Paris, France | 29344 |
| 3 | New York (Manhattan), USA | 16648 (26795 NYC) |
| 4 | Rio de Janeiro, Brazil | 16057 |
| 5 | Berlin, Germany | 13931 |
| 6 | Barcelona, Spain | 13550 |
| 7 | Rome, Italy | 12383 |
| 8 | Sydney, Australia | 11800 |
It is surprising more US cities are not on this list of most active rentals, especially given this was the Airbnb’s first market. It is also surprising to see European cities, London and Paris, in first and second place respectively.
Analysis
Studio price index
Studios can be rented as cheaply as $26 USD before fees (St. Petersburg, Russia) although most rentals (58/87) have a nightly cost of between $35 – $75 USD.
| Rank (most expensive) | City | Entire Studio (House & Apartment) Nightly Rental Ave USD Feb16 |
|---|---|---|
| 1 | Manchester, UK | 169.50 |
| 2 | Singapore, Singapore | 154.50 |
| 3 | San Francisco, USA | 153.50 |
| … | … | … |
| 85 | Mumbai, India | 31.50 |
| 86 | Sarajevo, Bosnia and Herzegovina | 29.00 |
| 87 | St. Petersburg, Russia | 26.00 |
San Francisco (2nd) and Singapore (3rd) are expensive places to live and as such would be expected to be cities with high rental values.
Manchester in 1st place ($169.50 USD p/night) almost $15 USD more than second placed Singapore ($154.50 USD) is unexpected — not least because rents are on average 63% cheaper in Manchester than London (ranked 9th @ $109.50 USD p/night). My assumption for this would be that there is a greater supply of studios geared to transient populations in London, San Francisco, and Singapore. Whereas in Manchester studios are likely to be of higher specification, more centrally located, and mainly designed for traditional renters. What do you think?
1 bedroom price index
There is a wider spread of prices for one bedroomed apartments compared to studios, perhaps because of more supply (greater choice), although this is just an assumption as Airdna only provides a single aggregated “active” rentals number for all property types.
| Rank (most expensive) | City | Entire 1BR (House & Apartment) Nightly Rental Ave USD Feb16 |
|---|---|---|
| 1 | San Francisco, USA | 172.50 |
| 2 | Boston, USA | 167.50 |
| 3 | New York (Manhattan), USA | 164.50 |
| … | … | … |
| 85 | Sochi, Russia | 35.00 |
| 86 | Budapest, Hungary | 34.50 |
| 87 | St. Petersburg, Russia | 26.50 |
In most cases, one bedroomed properties are around 14%Â more expensive than studios. What constitutes a studio and a 1 bedroomed is somewhat of a grey area though. I’ve stayed in Airbnb rentals listed as 1 bedroomed that official measures would deem a studio. Frustrating, ever-so-slightly. However, could be one reasons that accounts for this ever-so-slight increase in cost.
2 bedroom price index
Whilst most 2 bedroomed places are below $200 USD p/night before fees, 5 cities have an average above this figure. 2 cities cost more than $300 USD a night, Dubai, UAE ($326.50 USD) and Frankfurt, ($311.50 USD).
| Rank (most expensive) | City | Entire 2BR (House & Apartment) Nightly Rental Ave USD Feb16 |
|---|---|---|
| 1 | Dubai, UAE | 326.50 |
| 2 | Frankfurt, Germany | 311.50 |
| 3 | Boston, USA | 281.50 |
| … | … | … |
| 85 | St. Petersburg, Russia | 44.00 |
| 86 | Sochi, Russia | 40.50 |
| 87 | Sarajevo, Bosnia and Herzegovina | 38.00 |
At the other end of the scale, a 2 bedroomed places in Eastern Europe can be picked up very cheaply. The 10 cheapest cities for 2 bedroomed cities are all in Eastern Europe (all below $60 USD).
Cleaning fee index
Once you’ve got your heart set on a place, don’t forget to budget for the additional fees charged. These include a cleaning fee set by the host, and it’s not always as cheap as you might expect.
Cleaning fees help hosts account for extra expenses they have getting their listing ready before guests arrive or after guests depart.
–Airbnb
You’re probably wondering what city has average cleaning fees that amass on average $100 USD per rental. That city would be Miami, USA.
| Rank (most expensive) | City | Ave Cleaning Fee USD May16 |
|---|---|---|
| 1 | Miami, USA | 100.00 |
| 2 | Boston, USA | 95.00 |
| 3 | Ibiza, Spain | 91.00 |
| … | … | … |
| 84 | Bucharest, Romania | 12.00 |
| 84 | Sarajevo, Bosnia and Herzegovina | 12.00 |
| 87 | Kiev, Ukraine | 10.00 |
You might notice that 2 of the top 3 cities with the highest cleaning fees could both be considered “party towns”, Miami and Ibiza. Parties = mess = more cleaning?
Improvements
Whilst this post identifies the most expensive cities in which to rent an Airbnb apartment, it does not look at potential profits hosts can achieve. Or put another way, the differences between cost of ownership or longterm rental against Airbnb income.
tl;dr
The cheapest “Entire place” Airbnb rentals can be found in Eastern Europe. For a studio or 1 bedroomed place go to St. Petersburg, Russia (ave. $26 USD p/night exc. fees), and Sarajevo, Bosnia and Herzegovina for 2 bedroomed places ($38 USD).