While the use of artificial intelligence is already being established in the short-term rental industry, the impact and significance of AI has so far been fairly siloed.
Think dynamic pricing algorithms, virtual assistants, chatbots and smart property automation. AI is being infused into each of these examples, but they are quite isolated from each other.
As it stands, AI doesn’t quite look like a technology that is all about “big data” powering boundless insights and automation in the industry. The reality is it still has its limitations, and the reason for that is companies are still just scratching the surface of what’s possible.
The true potential revolves around properties and people, and how the successful pairing of data in these two domains could end up reshaping the industry in the process. We’re already seeing the first inroads that will eventually lead to this change.
A notoriously time-consuming aspect of short-term rental management is accounting for the unique nature of each home. Operators feel this pain when preparing for the next stay and communicating with guests. The quality of guest communication has previously been a pain point for the industry, but AI is paving the way for smarter and more efficient communication.
Guests are already expecting very immediate, very detailed and very personal communications. Prompt, accurate communication relies on much more granular information about a property, so the answers and information guests receive is specific to their rental and not generic. Providing this more granular information has already unlocked much more immediate, helpful and personalized guest messaging for property managers. Property managers and hosts with detailed insights into their day-to-day workflow will be the ones in the best position to really drive guest communication forward.
Subscribe to our newsletter below
But there’s a larger significance to having more detailed property and operations information. When online travel agencies start to use it too, the way guests search, shop and book for vacation rentals is also going to change.
The listings we’re used to seeing on OTAs like Airbnb and Vrbo are going to be far more detailed than anything we’ve seen before. In turn, this is going to improve the way people search for properties. Looking ahead, travelers will have the opportunity to be more specific in their criteria, whether that’s the capacity or depth of a hot tub for a disabled guest, the floor space of a third bedroom for a family bringing a crib, the fabric on the sofa for an allergy sufferer or the fuel powering a stovetop range for a foodie who will only cook on gas. AI that pairs rental search with all these details and operational data is going to make searching for a rental a far more bespoke experience, imitating a concierge-style level of detail.
At this point in the evolution of AI’s impact on the industry, the two sides of the vacation rental business will be much more connected — with the magazine imagery, detailed property information and aspirational travel search of OTAs at one end finding a new symbiotic relationship with the largely unknown world (as far as consumers are concerned) of property operations. The opportunity for vacation rental lies in how both these areas move forward at the same time, with operations and property management moving in lockstep and constantly improving each other.
But the unseen potential of AI in vacation rentals doesn’t end there. There are two phases to its implementation, and the first starts with the information we already have. We already know how big the floor space is and whether the stove is gas or electric — it’s just that no one wanted that level of detail in a rental listing, despite the hundreds of variables per property. If you think about it, the amount of information OTAs currently ask for is limited. AI will complement vacation rentals’ uniqueness.
The AI brain is capable of scouring millions of these listings in real time and this engine is going to be a far more important “reader” of this material than the guests, who will simply appreciate a far easier way of identifying properties they want to book. This reader will leverage much deeper levels of property data to pull forward the unique characteristics of a property that match the guests’ personalized search criteria.
What’s going to be more difficult is unleashing the second — and arguably more revolutionary — dividend of AI: true personalization. The vacation rental industry is no different from the rest of the hospitality industry in having many booking channels that, while they improve occupancy, limit the amount of information operators, hosts and technology solutions are able to collect on guests. But imagine how much customer service could improve if the AI powering guest communication could learn more about their customers.
Late checkout on gap days could automatically be offered to those with a late flight. Local excursions could be offered that match guest interests and hobbies. There are so many ways of personalizing the vacation rental experience, but AI is only as transformative as the information we provide it. AI requires layers of data, because without data you can’t do anything with it. Scale of data will determine who can leverage this tech and to what extent.
This is why capturing as much data as possible about your properties and learning more about guests is the next big challenge for property operators and prop tech providers, and one that will drive some platforms to expand into new areas.
As AI starts to drive new paradigms of property management, efficiency, guest interaction and personalization, it will be those who solve the hard problem of leveraging property data and guest details who will be in the driver’s seat.
About the author …