In recent years, technology has had an undeniable impact on vacation rental companies. Property managers around the world have started using specialised software to streamline their operations, marketing, distribution, guest communication and other processes. As a result, they’ve experienced unprecedented growth and seen returns that could never have been possible in the days of pencil-and-paper property management.
But how is property management today different from what it was twenty-thirty years ago? Let’s take a look at how technology has transformed vacation rental property management and what opportunities it presents for property managers who are ready to invest in it. At the end of the post, we sum it all up in a handy infographic!
In popular tourist destinations like France and Spain, vacation rentals have been around since long before the boom of the industry in the early 2010s. Property managers in these markets have been running vacation rentals without using any technology for decades. So why should they start adopting them now? Are all these software solutions really necessary? Why fix what’s not broken?
The answer is simple: technology enables growth. Today’s fastest-growing vacation rental property management startups all have a technology element to them. Hugely successful companies like Stay Alfred and GuestReady could not have grown to more than 2,500 properties each in just a few short years if they hadn’t been using state-of-the-art specialised vacation rental software. Technology allows property management companies to use their resources efficiently, save time and money, streamline their processes and start thinking at scale.
Technology can be applied to many different aspects of vacation rentals. There are tools on the market for a variety of purposes, from yield management to home automation. However, the most commonly used software solutions by far are Property Management Systems (PMS) and Channel Managers. (Not sure what the difference is between a PMS and a Channel Manager? Read our blog post on the topic!)
The European Vacation Rental Survey, a report conducted by the data analytics company Transparent, found that 59% of property managers use a PMS and 67% use a Channel Manager. The study that surveyed 500 European property managers also concluded that larger PMs tend to use more technology than smaller ones. The largest property management companies are the ones that can leverage data and technology the best. And these are the PMs that showed the highest growth rates, according to Transparent’s findings.
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Now let’s take a look at the 6 aspects of property management that technology has had the biggest impact on.
In the early days of what we now know as the vacation rental industry, property managers were not nearly as distribution-savvy as they are now. They used to rely on one or two listing sites (typically Airbnb and Booking.com) for all their bookings. This strategy posed many risks. If your property slid down in the listing site’s search results, you could miss out on bookings and hurt your occupancy. If the site decided to change its terms, you could end up paying incredulous amounts in commissions.
However, since Channel Managers appeared on the market, PMs have managed to diversify their property’s visibility by distributing their listings to various channels, including OTAs, vacation rental websites, metasearches and wholesalers. Channel Managers automatically distribute ads to multiple global and niche sites, increasing the chances of attracting high-value international guests. Rentals United, for example, connects to more than 60 different channels.
Before, property managers used to keep track of bookings and guest information by manually inputting everything to Excel. After a while, spreadsheets would get extremely messy and nearly impossible to figure out.
Now, all data is managed and stored in technology tools such as PMSs and Channel Managers. This makes workflows efficient and streamlined.
Before Channel Managers, when property managers received a booking, they had to manually update their availability on each listing site or use an unreliable iCal connection. This often resulted in out-of-sync calendars and double bookings. Nobody ever reminisces about all the times they had to explain to a guest why they need to cancel their booking!
Today, Channel Managers centralise all bookings and allow PMs to manage all their bookings from one place. Channel Managers also connect to all booking sites with robust API connections and sync calendars automatically, eradicating even the memory of double bookings.
Managing bookings and keeping listings updated manually used to be an awfully time-consuming process, which took up the bulk of a property manager’s time.
With the automation of channel management, property managers now have time to focus on other aspects of their business. For example, they can work on increasing their revenue by partnering with local providers and offering extra services to their guests.
Back in the day, growing a property management portfolio without specialised vacation rental technology was a long and slow process. There were no data analytics tools to help PMs map potentially interesting properties or other property management businesses to acquire. Managing operations and distribution at scale was an almost insurmountable challenge.
Like we said before: tech enables growth. Today, the world’s largest property managers are growing exponentially, expanding their portfolio with thousands of properties each year and scaling their services with the help of specialised vacation rental tech.
Before digitalisation in the vacation rental world, property managers were able to comply with laws and regulations without using any technology.
As the industry matures, regulations become stricter and PMs need to make more effort to comply with them. Today, the laws of several countries require statistics and guest information to be submitted digitally. This can be done with the help of smart check-in apps – like Check-in Scan – that scan guest IDs and automatically send them to the police for security checks.
Adhering to regulations should be a top priority for every property manager. Another reason why PMs can no longer afford not to use vacation rental software!
In conclusion, property managers who wish to grow their business, increase their revenue and expand their portfolio should consider investing in specialised software. Technology is the only way to keep up with the competition and be truly successful in the dynamic vacation rental market.
If you need more help scouting the best software currently on the market, check out our list of the top 50 vacation rental software.
The Who’s Who of Vacation Rentals 2020 is out! In this free ebook, you’ll find all the companies building tech solutions for vacation rentals, including Channel Managers, PMSs, cleaning and maintenance software, dynamic pricing solutions, data solutions, website builders, guest communication apps, online payment solutions, chatbots, marketing automation software voice solutions, check-in and welcome apps and much more!
And finally, here’s an infographic to recap everything we said above about vacation rental technology and its impact on property management.
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