Vacation Rentals Aren’t just a Growing Market, But Keep Getting Smarter Too
With platforms like Airbnb and VRBO taking an even greater slice of the hospitality industry each year, the market segment is also maturing and enhancing its technological edge too. The sharing economy is well on its way to becoming truly massive, predicted to hit $335 billion in size by 2025, so it’s no surprise that there is plenty of tech involved in that climb.
Vacation rentals certainly aren’t all gig scale either, there are several large companies already circling the market for short term rentals, running ‘aparthotels’ or Airbnbing dozens of units in one location, and sometimes even entire buildings. Sonder, arguably the largest short term rental company on the market today, has recently surpassed a staggering $1 billion valuation.
Vacation Rentals are Innovating with new Technologies
Operating Airbnbs on the scale of a hotel chain is no small task, and a lot of technology comes into play here, from start to finish. Background checks are an important first step, all the way up to guests checking in with a digital lock.
For some, though, a digital lock just doesn’t cut it, and they’re taking the technology a step further. ENVITAE is a good example of a technology-driven short term rental company — they focus exclusively on luxury units and 5-star service for their guests. Recently, the company developed and launched a voice-activated digital concierge service to complement its existing dedicated concierge desk they operate. Need the Wi-Fi password, or want to know when the pool is open? You don’t even need to put in the effort of calling or messaging anymore — just ask the smart in your unit speaker directly.
Risk mitigation and monitoring is becoming automated
Let’s face it, you’re not always going to have the best guests staying with you all the time, this is especially true for larger vacation rental companies who are managing hundreds or thousands of units. The problem is amplified by the fact that there usually isn’t an employee on-site to manage guests and attend to problems the way a hotel could.
With short term rentals coinciding with residents in a building, problematic guests can put a huge strain on building and resident relations, or result in the eviction of the rental company operating there. For these reasons, rental companies, and even some individual Airbnb hosts are using noise monitoring devices in their homes. This way, owners or property managers receive a notification if there is loud music during quiet hours, and can intervene before things escalate.
New start-up Alertify is taking monitoring up a notch, by including an array of sensors to monitor not only noise but also cigarette and vape smoke, as well as temperature to detect any heating or AC misuse. Technology like this can save short term rental businesses thousands of dollars in potential damages, or even save them their lease.
Is all this tech going to make your stays any cheaper?
New technology and improvements to efficiency are generally great for everybody, but will they trickle down to the consumer in cost savings? The answer is most likely, yes. Things are already swayed in favor of vacation rentals. A study by Priceonomics found that renting an entire apartment on Airbnb was on average 21% cheaper than a hotel in the same area.
Short term rentals are a rapidly expanding market, and the added competition that has sprung up over the years has already resulted in lower prices and more supply. On top of that, pricing tools are becoming more advanced, allowing owners and property managers to optimize the pricing of their units based on seasonality, events and other factors.
PriceMatrix , a California based start-up is looking to rock the short term rental pricing world with the inclusion of AI and Machine Learning technologies. The company boasts to be a near plug and play solution for property managers and owners, with proprietary algorithms that take a plethora of data points into account to perfectly price homes for the best possible occupancy.
All in all, a booking on Airbnb is not what it used to be. Brands are now more common, and additional services are becoming more expected by travelers. New niches are developing, such as ultra-luxury brands and booking for a special experience. Overall, it looks like the hotel industry has its work cut out for them if they want to stay afloat and retain a sizeable market share. All of this competition is, of course, great for us consumers, as we’re likely to continue to see prices come down as the competition intensifies.