When we started our company, we often encountered resistance from property owners regarding renting out on Airbnb, on the French Riviera especially among older generations. There seemed to be a stigma associated with Airbnb, equating it with cheap properties and parties. It felt like everyone we met had a story about their neighbor attempting to rent out on Airbnb, only to have a group of 18-year-olds throw a party. To some extent, this perception still exists. Renting directly through an agency was viewed as more serious and proper.
Today, we will explain why we believe the opposite is true and why Airbnb is our preferred platform for bookings.
Firstly, there is the matter of demand. According to Airbnb's latest earnings call, hosts on Airbnb made $57 billion in 2023. Airdna, one of the leading statistics firms in the rental industry worldwide, indicates that approximately 70% of bookings in our area are made through Airbnb. With this statistic in mind, disregarding 70% of the market would seem counterproductive. Consider the scenario of an American family planning a vacation in the south of France. The likelihood of them stumbling upon a local rental agency's website amidst the vast marketing efforts of global players seems slim.
Secondly, trust plays a crucial role. Airbnb has been successful in creating a layer of trust between hosts and guests. When guests book directly with us, we lack familiarity with them and must ask questions to gauge whether we trust them with the property. However, one crucial aspect remains missing: their history. Airbnb addresses this by allowing hosts and guests to rate each other after the stay. This means that when we receive a booking request through Airbnb, we can view the guest's track record based on reviews from other hosts.For us a track record of positive reviews from other hosts holds more weight than a new guest claiming to be exceptional.
This trust also extends to guests. In our example, with the American family booking their first vacation in the south of France. They have to pay upfront and hope the property meets expectations. On Airbnb, they can rely on the reviews of previous guests to reassure them.
Lastly, insurance is a significant factor. Airbnb offers insurance called Aircover, which provides protection for both guests and hosts. Guests are covered in case hosts fail to fulfill their obligations, and Airbnb steps in to assist them. For hosts, this insurance includes $3 million in damage protection and $1 million in liability coverage. This insurance has proven effective in our experience and is challenging to replicate for smaller entities.
We believe that these factors have contributed to Airbnb's growth as a platform for all types of bookings. Today, you can find properties in Cannes renting for €45,000 per night on the platform, indicating that Airbnb is not just for cheaper properties anymore. If incidents like 18-year-olds throwing parties still happen, l am afraid it is not due to the platform but rather the operators.
