The short-term and vacation rental industry is the fastest growing businesses in real estate, but in order to be profitable & scalable, it needs to be fully tech-enabled.
The short-term rental industry is one of the fastest growing businesses in the real estate market. Over the past few years we have seen exponential growth in both the urban short-term and the traditional vacation rental markets. In fact, today it is estimated that 1 in 3 travelers currently choose to stay in a private rental when on vacation. In 2011, just three years after the birth of Airbnb, in the United States this figure was closer to 10%. This growth isn’t about to slow down anytime soon. With an industry influx and interest from Asian travelers in vacation rentals, market value is estimated to increase to $194 billion by 2021.
Since its launch 10 years ago this summer, Airbnb’s growth has been astounding. With over 150 million Airbnb users globally, including more than 3 million hosts, the online booking site continues to shape both the travel and property rental industries. Airbnb has even put a new career on the market, short-term property managers, or as they aspire to be known, “Super Hosts”. These property managers, or rental agents, have access to multiple properties and work to manage them to be suitable for short-term rentals in their chosen location. With multiple properties to manage, a constant turnover of guests, ground staff to deploy, and individual owners to keep happy; short-term property management companies are in need of a central software solution to help keep them organized, keep business operations running smoothly, and ease communication between all parties.
It can be argued that a significant reason for the growth of both Airbnb and the many urban property managers that have sprung up as a result of the Airbnb ecosystem, has been the technological advances and technical back bone that these companies possess. They have a real understanding that in order for a vacation or short-term rental business to be both profitable and scalable, it needs to be fully tech-enabled with automation and a centralized core. The fact that many traditional rental companies were slow to make the shift to digital, meant there was and continues to be, opportunity for plenty of ambitious start-ups to fill the void.
In fact, Guesty, the SaaS company that I co-founded in 2013, was originally created to help short-term property management companies publish and control their listings across many different booking channels. Originally, we created a direct integration with Airbnb to better accomplish this goal and because of our deep integration with both Airbnb, more recently Booking.com and many other booking channels, we’ve been able to help hosts manage multiple Airbnb accounts on a much higher level. We have since developed multiple features to assist property management companies with almost all aspects of their day-to-day management, including guest communication, automation, staff management apps, reporting tools, payment processing, and more.
This also brings me to the importance of getting ‘guest experience’ right, which may be unique to short-term rentals over other types of property rental agreements. Guest experience is very much based on both the product and service that a property manager is able to provide. This includes the ability to respond quickly, accurately and intuitively to any questions or inquiries guests’ might have before, during or after a booking. You can’t change the location of your property or its size, but you can improve how you communicate and manage the relationship with your guests.
You can’t change the location of your property or its size, but you can improve how you communicate and manage the relationship with your guests.
We recently surveyed our typical customer base; short-term property managers in different locations across the world, managing anywhere between 5 to more than 500 properties. These respondents were not Guesty clients but have many of the issues that our clients come to us to solve. 82% of these managers told us that they felt that their response time to inquiries has a vast impact on bookings. The majority of property managers also stated that their biggest challenges are in keeping communication organized, and responding with the right answers to the right questions.
Technology is helping to create property management tools specifically for these markets. Software, such as ours, includes tools and features that support guest communication through a unified inbox, with ‘intelligent’ messaging. From here, automation tools can develop a smooth and centralized communication between property managers and guests before, during and after their stay. As we all know, software, and especially SaaS, allows businesses to grow, cut back on unnecessary costs, while innovating and transforming the company. Short-term and vacation rental companies are using software to improve guest communication across the board.
For property managers, using multiple booking sites to attract leads along with a unified inbox goes way beyond emails. What this does in reality is gather your entire communication history with guests across multiple Airbnb accounts and other vacation rental booking platforms and various messaging platforms, and stores it in one inbox. This highly intuitive interface makes it easy to reply to any message and guest interaction all in one place.
The use of ‘Intelligent Messaging’ is a way that managers can anticipate questions and respond quickly and accurately to inquiries. In the world of ‘instant bookings’ the need to respond quickly to guests has become increasingly more vital. Automating many of the repetitive business operations, including communications with guests, decreases property managers’ time spent actually managing and therefore frees them to focus on company growth. With automation, property managers can create a sequence of customized messages (or as we call them, ‘Hooks’) and have them sent out to guests at any stage before, during or after their stay. The messages can be sent via SMS, E-mail or through the booking platform’s own messaging service, meaning that guests can receive information through their channel of choice directly to the unified inbox. Messages can also be fully personalized with dynamic variables, such as the guest name or check-in date of a specific reservation. Managers can also make use of an ‘instant reply’ sent out as soon as an inquiry comes in, meaning that they are in the process of converting to a guest, even if out of the office or sleeping.
Although automation provides a solution for a great deal of the communication ‘hassle’, there are of course times when responses still need some extra thought, and we have yet to do away completely with the human touch.
Although automation provides a solution for a great deal of the communication ‘hassle’, there are of course times when responses still need some extra thought, and we have yet to do away completely with the human touch. For this reason we also provide our customers with a 24/7 ‘Guesty Communication Service’ staffed with experts that can manually answer any question a guest may have. In fact, our Guest Service Expert team deals with an average of 4,000 ‘tickets’ per day on behalf of our property managers.
It is also important to focus on the vital communication between homeowners and property managers. Homeowners are often looking to be more involved in the management of their listings, and this requires another channel of communications. Property managers find it challenging to continuously keep their homeowners up to date on their properties’ rental revenue without the continuous hassle of manually building detailed monthly reports. Having a built-in ‘Owners Portal’ allows managers to visualize and share data for each property directly with homeowners, saving time and effort spent on back and forth communication.
Finally, communicating with staff on the ground is also an area where automation and technology will positively impact business. In the short-term and vacation rental markets – properties may be geographically spread and even if all the properties within a portfolio are all in one urban center, there is still usually traffic and distance to negotiate. With quick turnovers and a big investment in cleaning staff required, communicating core tasks with staff and ensuring that jobs are completed impacts business as a whole. We partner and have direct integration with the Properly App, a checklist tool that property managers can use to automate and maintain standards of housekeeping and cleaning in their properties. This innovation is improving the daily grind for managers all over the world.
It’s clear that, due to high numbers of relationships involved, the short-term and vacation rental markets have distinct needs in terms of communication that other real estate markets do not. As an industry, we’ve come a long way in providing a technological solution to these challenges, and as the industry continues to grow and evolve, we will continue to expand the technical capabilities in order to fit the needs of today’s short-term and vacation rental property managers.
If you’re interested in learning more about property management and discovering the many ways Guesty's platform can help your business, we invite you to a free one-on-one session with one of our experts.