Paris Olympics shed light on property rental industry shortcomings

The 2024 Paris Olympics, which officially got underway last Friday, are expected to bring 1.5 million foreigners to the nation’s capital, and three times as many French tourists from outside Paris. 

The influx of tourists has been both a boon, and a headache, for Parisian short term rental owners who are looking to make some cash during these summer games. 

According to Airbnb co-founder and CEO Brian Chesky, this year’s Olympics are “the biggest event in Airbnb history,” as he told CNBC last week, however the company declined to share the number of unbooked listings. 

Despite initial concern from short-term renters who reported struggling to rent their properties as late as April of this year, some reports indicate that hosts have since been able to earn on their properties during the games, and property rental prices are up as much as 70%. 

The Parisian rental property owners’ woes have reignited debate in the industry over the efficacy of large rental platforms like Airbnb, Booking.com, and others. 

Just weeks before the games, Bloomberg released a report about a growing movement of property owners who are looking to decouple from platforms and attract guests directly to their own websites. 

Disillusioned by extra fees platforms charge, the algorithms they use to suggest properties to guests, and tougher refund policies, owners are venturing out on their own to do the marketing, booking and everything else associated with running a rental business. 

The realities of making the transition away from platforms can be daunting, however. Some renters are moving into more medium-term rental markets, striking deals with businesses who need to house employees who are on assignment for extended periods.

And other companies have sprouted up, aiming to take some of the burden off property owners who may not be as well versed in website building, digital marketing, and booking systems. 

One such company is hostAI, an artificial intelligence (AI) platform that services vacation rental managers and helps them grow their direct booking business. The company just announced a new partnership with leading vacation rental software company Hostaway, and already has property management software Guesty as an existing partner. 

According to the founder, Amirali Mohajer, the biggest hurdle facing rental owners is the time and expertise required to build a digital storefront. “We’ve heard clients pay thousands of dollars for websites that are slow and buggy from the start. Or run advertising campaigns that led to zero revenue for them, because they’d worked with someone that wasn’t familiar with the industry,” Mohajer said. “That’s why we’ve decided to tackle the entirety of this big problem end to end with AI. If you miss one piece of it, the whole solution falls apart.” 

The founder of the company, which operates in a growing sector of AI website builders for all sorts of industries, said it stands out because of its holistic approach to its customers. “We automate everything from distribution to SEO-optimized content creation and intelligent storefront design,” said Mohajer. Their website also states that their AI is custom-built for the travel space. 

And while Mohajer is adamant about his mission to upend the short-term rental industry, he has his feet planted firmly on the ground in terms of expectations. “Well, our mission is to make direct bookings the default in travel and we have about a decade’s worth of work ahead of us,” he said. In the meantime, the company plans to roll out new features for its white-label tool and develop further partnerships with industry leaders like Hostaway. 

Short-term renters in the United States will certainly be keeping an eye on how Parisians did in the market after the event, especially with high profile sporting events like the 2026 FIFA World Cup, 2028 Summer Olympics in Los Angeles, and the recently announced 2034 Winter Games in Salt Lake City coming to the U.S. in the upcoming years. 

“In some instances, it makes sense to shift sales from third parties to direct, especially during high seasons when demand outstrips supply, making it less economical to pay third-party distributors,” Mohajer said. 

This article includes a client of an Espacio portfolio company