1. You typically get more space than a hotel, and a kitchen. Currently I'm living in an entire 2 story house in a city center that I rented off AirBnb. It was a third of the cost of a cheap hotel room for a short term stay. Remember, you can negotiate prices on AirBnb, I've never paid full price, and typically get 20 - 70% off depending on the length of stay.
2. Personal touch. A lot of the places I've rented were in a family owned home, with separate apartments. On a number of occasions the host has taken time to pick me up and drop me off at the train station, for free. They've also taken time to go out for drinks, or just to walk around their city for an hour or two. When you're traveling to a new city, having a local family that's lived in that location for the past 20 years show you around, is a unique experience, and one you don't get with hotels. I've also had hosts leave me gifts, souvenirs, free wine in the fridge, plates of food on the counter, etc.
3. You feel like a local. Hotel rooms are extremely generic, and you feel disconnected from the city. Staying in an apartment or home, you get a better experience for the culture.
4. Free internet, not nearly as common in hotels.
Anyway, most of his concerns can be avoided by reading the reviews for the host. Also, send the host a few messages back and forth to see how reliable they are, and how quickly they respond. I've spent half the year living in all sorts of AirBnb apartments, and don't plan to consider hotels again anytime soon.