The vacation rental industry is now worth a staggering $100+ billion dollars.
Guests have more options than ever when choosing a property, and property managers are using technology to take advantage of surging demand and grow their businesses.
With the wide range of vacation rental tools available, property managers can automate their work and deliver better experiences for guests.
There are endless ways property managers can harness technology to revolutionise their businesses.
In this article, we’ll discuss how the rental industry is changing, and how property managers are overcoming new challenges with the help of specialised vacation rental technology and tools.
How has technology changed the vacation rental industry?
Technology has revolutionised the vacation rental industry, changing the experience for guests and giving property managers new ways to increase their income.
Let’s look at some of the major shifts that have happened over the past decade:
More booking channels than ever
Guests have more choice than ever and there is no shortage of online platforms to choose from when booking a property. While big players like Airbnb, Booking.com, and Vrbo still boast a large market share, smaller channels continue to grow.
Niche channels are especially attractive to guests who are looking for unconventional stays, whether that be luxury properties or homes that offer a unique experience that they might not get from mainstream sites. Some smaller sites individually vet each listed property, offering guests a guarantee of quality.
Advanced tools for managing listings
With more channels on the market, property managers can simultaneously list on major sites and several smaller channels that suit their offering, getting their properties in front of a diverse audience.
However, property managers require an advanced channel manager to be able to sync all these listings and avoid double bookings without hours of manual work. And many channel managers now offer a comprehensive range of tools.
Rentals United, for example, offers world-class channel management, a guest communication platform, a website builder, an AI-powered data tool, and more, making it possible to manage your entire business in one place.
Listing optimisation
Large OTAs list millions of properties, meaning property managers face steep competition.
Tools like Rentals United’s Elevate data platform allow you to accurately see what’s missing from each of your listings and how you could improve the content to rank better according to each channel’s criteria.
Smart home technology
Many property managers are now embracing smart home technology that allows them to have more control without needing to greet guests in person.
Smart home technology includes tools like smart locks, electronic security devices, smart thermostats and digital guidebooks that contain all relevant information easily accessible for guests.
Tools like smart locks allow for seamless experiences like self-check-in, where property managers don’t need to attend each booking in person. This means they can grow their portfolio and spread across new locations.
As another example, smart thermostats allow property managers to reduce waste and excessive utility costs without harming guest experience.
Rise of mobile bookings
42% of travellers use their smartphones to plan and book trips. This means booking sites must offer a seamless, mobile-friendly experience. If you hope to attract direct bookings, you should also ensure your website is optimised for mobile.
As a result of the boom in mobile bookings, channels like Booking.com allow property managers to set special Mobile Rates that offer discounts for travellers booking through the app.
Guest screening and safety solutions
In recent years, property managers have become more concerned about safety and preventing property damage.
Technologies have come about to help property managers lower the risk of hosting. For example:
- Noise alarms can detect constant loud noise indicating a party, without breaching privacy laws.
- Guest screening tools allow property managers to automatically run background checks on guests before they arrive.
- Damage protection plans and deposits help property managers cover the costs of damage.
Intelligent pricing tools
With such high competition on listing sites, property managers use dynamic pricing to ensure they’re always charging the optimum nightly rate to boost occupancy and earn as much as possible per booking.
Intelligent pricing tools use historical and current market data to estimate the best possible rate for every property, and make adjustments based on fluctuations in demand. Property managers can benefit from 5-15% increase in revenue by using pricing tools.
AI chatbots
Chatbots can be used to answer common guest questions and help guests find information for themselves without requiring property managers to be on call 24/7 or invest in customer support staff.
Property managers can install a chatbot on their website or digital guidebook that’s easily available for guests.
Why incorporating technology is a must for growth
In 2024, property managers must be open to new technology and incorporate tech solutions into their business in order to stay competitive and continue to grow.
There are many benefits to embracing new technology, for example:
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- Elevate guest experience — Guests appreciate technology and are even coming to expect vacation rental stays to be enhanced through technology.
- Provide 5-star customer service — Guests want hosts to be easily contactable before, during, and after their stay. It’s hard to handle all communication manually, but guest communication tools such as Rentals United’s Smart Guest Communication allow you to automate many aspects of messaging and make it easier to keep up with all messages across channels.
- Technology-driven growth — Technology can reduce your workload, increase your revenue, and make it easier to deliver top notch experiences. By investing in tools, you can free up more time, which allows you to acquire more properties and grow your portfolio.
- Comply with regulations — Tougher regulations have been enforced in many locations, such as New York, in recent years. Technology can make it easier to submit documents and comply with local laws, so you can avoid fines.
Our predictions for the future of vacation rentals
Looking ahead to 2024 and beyond, here are some of our predictions for the vacation rental industry:
Automation tools
It’s likely that more and more property managers will embrace automation tools as a way to free up time and grow their inventory.
Automation tools will be able to handle a lot of the work of listing properties, setting prices, messaging guests, and more.
Use of AI
The popularity of AI is exploding and affecting every industry. AI will be used to answer guest questions, predict trends, create listings and property descriptions, and analyse performance.
Rentals United’s Elevate is blazing the trail for AI adoption in vacation rentals, as property managers can use the tool to analyse listing performance and get personalised recommendations to boost performance and bookings.
Regulations and laws
More regulations may come into force in different locations to protect both local communities and guest and host safety.
While regulations can be bothersome, overall, they are beneficial and will allow the vacation rental industry to endure and protect the authenticity of destinations.
Diverse property types
We expect to see more unique property types on the vacation rental market, everything from castles and chalets to treehouses, glamping, wellness retreats, and more.
More channels will continue to appear to serve all these different niches.