Short Stay Summit preview: Industry vendors on tech innovation

UK: Ahead of the upcoming Short Stay Summit at Old Billingsgate in central London on 27 April, STRz speaks to leading vendors – Hospiria COO Richard Bridger, Operto CEO Steve Davis and Breezeway CEO Jeremy Gall – to get their take on tech trends and innovation in the short-term rental industry.

What opportunities do property managers and hosts have right now when it comes to short-term rental technology?

Jeremy Gall: In today’s challenging economic climate, streamlining operational workflows to drive profitability is paramount. In 2023, we are seeing a heightened emphasis on driving efficiencies in order to keep costs in check, keep homeowners happy, and deliver higher-quality properties and guest experiences.

Steve Davis: The advancements in short-term rental technology provide property managers and hosts with numerous opportunities to improve their efficiency, increase their revenue, and enhance the guest experience. Being able to connect booking, payment, pre-, during- and post-stay through one connected ecosystem is the key to streamlining operations and growth. Channel management is key to allowing property managers and hosts to simultaneously distribute their listings across multiple booking platforms. The use of AI tools such as ChatGPT to automate and scale guest experience and operations has no limit.

Richard Bridger: As the pace of technology development continues, it’s possible that we’re on the cusp of some technologies breaking out from the “carbon copy” world where almost every PMS has a marketplace with single-service technologies plugged in. You can see how companies are looking to diversify their offer and augment and become the dominant middleware – Operto is trying to do that from guest tech, Breezeway is from operational and cleaning tech, and Hospiria is doing it from the traditional PMS space. No doubt, lots of others are thinking about how to expand their capabilities rather than just connect to others.

The benefit here is that property managers and hosts might not need to contract so many individual services, and the integrations get more robust. The challenge is you will start to get into an ecosystem structure where you find yourself in a certain ecosystem, and extracting yourself is ever harder [think trying to move from Google to Apple phones]. So the key choice is to ensure you’re in the right ecosystem and be very, very clear about where you want your data to reside because you might find it hard to get it out down the line.

Are there any changing consumer demands impacting how property managers use technology?

RB: It’s important to remember there’s no single trend. Some high-value guests still value high-touch services and will pay for them, others care more about digital-first services. Where it’s digital-first, the ability to seamlessly integrate different parts of the experience will be crucial – everything from messaging to extra services and door codes. The balkanised state of the current tech landscape will hinder this, but if you can integrate that experience, you can go far. This need to have integrated technology is what’s driving the push to break out beyond core competencies from many of the tech companies in the sector. But you have to know which customers want which service! The way you use technology as a property manager will vary by your customer profile.

SD: Consumers are increasingly using their mobile devices as the primary means of connectivity while travelling. Property managers are responding to this trend by developing mobile-friendly websites and apps that allow consumers to access information and services on the go. Self-serve options continue to skyrocket and property managers must address this trend by implementing self-service portals and check in.

JG: While authenticity is part of the appeal of short-term rentals, guests also want predictable experiences. Consumers don’t want to feel like they are rolling the dice when they decide to book a rental – they’re not quite sure what they will get with respect to quality. The exciting part is that we’re seeing managers and hosts of all sizes investing in technology to drive quality and ensure they meet a certain standard.

What are the challenges you foresee for property managers, or the industry as a whole, to navigate this year?

SD: The top three we hear daily from our customers and potential clients are, firstly, supply chain disruptions. The ongoing Covid-19 pandemic has caused supply chain disruptions and shortages of building materials, appliances and other essential items. Secondly, rising inflation and interest rates. Inflation and rising interest rates may impact property managers’ ability to secure financing for new projects or maintain profitability on existing properties. And lastly, labour shortages. The labour market has been tight in many industries, including property management. This makes it difficult for property managers to find and retain qualified staff, leading to increased workload and decreased efficiency and while automated solutions are essential to property management.

RB: In the short term, demand is going to be a big challenge, particularly with the current cost of living. In the long term: regulation will be the biggest challenge. Countries are starting to systematically introduce regulation – Portugal is cracking down, the UK Government is looking at registration, Scotland has introduced very imposing restrictions. The industry needs to be able to better explain that it adds huge value to local areas – but also probably recognise that in some instances it has impacted local residents, and clearly some operators are irresponsible amateurs and they need to hit certain standards. This was always going to come – now it’s here.

JG: We heard a lot of chatter about managing owner expectations during Breezeway’s virtual summit ELEVATE. Many owners rode the highs of the surge in demand in the last few years. Property managers must navigate owner expectations and rising costs and how to best communicate these to their owners.

What’s your take on the rise of ChatGPT and how will this impact your business and customers?

SD: I am tempted to plug this question into ChatGPT to generate my response! Streamline, streamline, streamline. As our Operto team navigates ChatGPT – we look to find ways to work with the programs. We approach with curiosity and build our products in alignment with the opportunity and even our job descriptions. Many guidebooks and guest information can be easily accessed using the tool. My take? If you haven’t spent some time testing it out – you should give it a go. I look forward to seeing each of our customer’s growth when leveraging AI tools.

RB: It will change everything and nothing – in much the same way the internet has for the industry. On the one hand, the internet has massively transformed how people book travel. On the other, the GDS is still a dominant force in corporate travel due to incumbency, and one of the greatest drivers of a good guest stay and good business is physical location, quality of product, and service, just like it was in days past.

I suspect a similar thing will happen with AI. The mechanics of the industry will change hugely. Your guest may get to the point where they ask your version of ChatGPT for explanations on how to use the oven, rather than reading your instructions. Your AI will ingest photos and write the description. But underneath it all, guests will still want the AI to be serving their own personal experience and that will be the thing that stands out.

What the internet really did to the industry was change the mechanics of how you do business, particularly providing new models of distribution and aggregation – i.e. new ways of reaching customers. It provided new opportunities for property managers but has also brought the constant risk of being commoditised as you sit alongside every other operator on the OTAs.

AI will probably do the same – provide new mechanics of distribution [people ask their personal AI travel agent to book a place with XYZ features]. It will probably also open up new mechanics of customer service, but also, as a result, a new risk of being commoditised as AI could provide some service elements more efficiently than a person. BUT – the physical nature of travel, and the desire for it to bring an experience that matches a person’s desires, means that those who can ride the back of AI to deliver a better personal experience will still be the ones to prosper.

JG: ChatGPT and AI will impact every industry. Having said that, humans have always been at the centre of an exceptional hospitality experience. The best technology empowers people to do their jobs more efficiently and effectively. At Breezeway, we’ve always taken this approach as we build our products and services. ChatGPT is very impressive and has many applications in the short-term rental space. One real-world application of AI that we are already testing is “suggested replies” within our messaging tool. AI can significantly impact decreasing repetitive back-and-forth communication, reducing human error, and delivering faster response times.

There’s been a lot of funding secured for short-term rental tech solutions in the past year. Are you expecting this trend to continue into 2023?

RB: Only to the most successful ones. The market has really turned recently, particularly after Silicon Valley Bank went under, so those that are profitable could continue to prosper. Those that grew but without a path to profitability could really struggle to raise. This will reinforce the growing trend towards consolidation that was already present. Again, the industry is maturing, and greater regulation, consolidation, and breadth in technologies are all pointing in that direction.

JG: Short-term rentals are part of a dynamic and growing sector of travel that relies on technology to execute across a very complex business. Technology will continue to be a valuable part of the short term rental ecosystem. Expect the pace and total funding to drop in 2023, but there will continue to be attractive investment opportunities in this space.

To hear more insights, readers attending the Short Stay Summit can attend the Main Stage session ‘Integration or Marketplace?’ at 3:35pm on 27 April. Read the full agenda here.