Many amongst you have questioned BedyCasa and how it works. This is why the team has decided to compile this short report in order to shed light on the functionality of this sharing economy start up business for 2015.
BedyCasa came into the world in April 2007, following the founder Magali’s travels around the world. One year later, on the Californian coast, Airbnb also arrived. These two businesses strategies are different: Airbnb is the market leader in rentals between private parties, strengthened by the almost 2 billon dollar it has built up, whilst BedyCasa developed at a ‘more human’ rate.
To be clear, the presence and impulsion that a multi national company like Airbnb generates is beneficial for the market. Effectively in its wake (alongside media hype), a real collective awareness has been created in the face of new consummation trends demonstrated through sharing economy. Not everybody however sees this development as a good thing, notably the hotel industry, which denounces it as unfair competition due to the inexistence of an appropriate law. Without forgetting of course of Mayor of Paris who fought tooth and nail against Airbnb’s illegal tourist accommodation. Recent affairs bring me also make a link to the war against Uber by taxis, a new business which breaks the code and norms of certain professions that struggle to reinvent or innovate themselves.
The economic model that differentiates
BedyCasa and Airbnb finds itself under discussion in the same market spotlight, but the way in which they move on from this very different. It is important to underline that despite all speculation, the majority of all accommodation sharing sites are not currently profitable; many are still trying to raise funds. The idea of making the concept of sharing financial is not always easy. It is thus that sites keep themselves a float by taking a commission.
For example, Airbnb has chosen to charge its hosts a 3% commission rate. This figure is often relative because the site based in San Francisco takes a margin of between 10 and up to 16% on the price shown when the traveller pays.
On the contrary BedyCasa has opted for a different route. Commission is taken from the host upon reservation, at a rate of 15% (as well as a static charge of 3.90 euros for the traveller whatever their total reservation cost). The host is also free to integrate this commission rate when setting their price.
Airbnb’s prices of thus higher (at around 10 to 15%) than those set by BedyCasa in terms of the margin on the price shown, but is also increased by the number of travellers on the site, and thus not necessarily showing the reality. Besides, some hosts don’t realise that their prices have gone up without them doing anything.
The tip of the iceberg
It is important to bring to light certain information that consumers are very rarely aware of. Travel alerts, contact between parties, search engines, customer service as well as photo uploads are all services that are completely free on our platform.
BedyCasa also takes on the bank charges for each transaction (both outgoing and incoming payments) that go as high as 4%. Add onto this the 20% VAT (we’re based in France) on the commission and you’ll start to understand more why sharing economy start ups struggle to break even, the margins remain low and the need to do a large volume of business is crucial.
At BedyCasa we have voluntarily ‘halted’ expansion between 2014 and 2015 in order to concentrate on the optimisation of the site’s functionality, to bring ourselves closer to our customers and to create a network of institutional partnerships. Our objective is also to become profitable. An objective that we reached this in May 2015 and which we are happy and glad to be able to announce this to you. New services and offers are also coming soon.
Favouring quality over volume
We have thus evolved in different conditions to those on American soil. The means of Airbnb and BedyCasa are not comparable. The American placed clearly as the market leader with an estimated 22 billon dollars and axes its development on volume: a maximum amount of accommodation for a maximum amount of travellers in order to take first place not only in the seasonal rental market but also in that of hotels and lettings.
From our side, we think it is vital that this same activity comes from the concept of sharing, we believe in our values and our country, and it is for that reason that quality and sustainability are our axes for development. Sharing economy represents the future, it is by working together that we can get there and this tendency is not just a trend, but rather constitutes a real move that is necessary at a time when the crisis and purchasing power are an obstacle for most budgets.