The growth of the short-term rental industry and technology’s role in it
1 minute read
As someone who has been immersed in various tech startups for the last decade, I’ve come across countless bitcoin investors who have made a nice sum of money thanks to blockchain appreciation. With an appetite for higher-risk investments, some of these early adopters have even become crypto-millionaires.
But what about other hyper-growth, hyper-publicized industries that have taken off thanks to tech advancements? For one, there’s the short-term rental arm of the sharing economy, which accommodates travelers who veer away from the traditional hotel stay. It might not be digital currency, but being a part of it could result in a lot of, well, currency.
The Rise Of Short-Term Rentals
Travelers have widely adopted short-term rentals, such as the vacation homes you see on Airbnb and other booking channels, resulting in one of the hottest arms of the sharing economy. In fact, short-term rentals yield 30% more profits for homeowners/investors than long-term leases, with an estimated global market valuation of $169 billion in 2018 alone. The payout is big, especially when annual holidays come around. According to short-term rental data provider Transparent (via ShortTermRentalz), cities like Las Vegas, for example, saw their average daily rates increase by more than 100% on New Year’s Eve.
Although this alternative type of accommodation was taking off 10 years ago thanks to Airbnb, the industry is growing at a faster pace than hotels, as it’s become more tech-enabled, with a keen focus on professionalization. Case in point: Bloomberg recently noted that “Airbnb spawned an ecosystem of startups” that support this industry, ranging from noise monitoring systems to temperature control solutions to keyless entry tools.
Millennials Took Notice
Many millennials identified the opportunity, listing their spare rooms or properties across Airbnb, Booking.com and more as side gigs and eventually becoming full-time, new-age property managers who achieved financial independence and business owner status by building sustainable businesses off this growing trend.
They weren’t the only ones who saw an opportunity. In 2013, the founders of my company, a short-term property management platform, identified the opportunity to create a tech solution that decreased the headache of constant guest communication and managing listings across booking channels, ultimately building a platform that automates and streamlines the operations associated with short-term rentals.
This — and other solutions that have launched since — resulted in a new software category: property management platform (PMP), also known as a property management system (PMS). A PMP aims to enable property managers to do it all, all in one place — from managing listings across various channels, to issuing reports to homeowner/investors, to working with vetted tech partners that can help save them time, such as dynamic pricing tools that price properties in real time. This is all in an effort to alleviate stress factors that have emerged from short-term rental property management, which has grown exponentially in the last few years and is not slowing down.
Modern property managers likely share the same pain points when it comes to managing their property management businesses:
• They take pride in facilitating a great guest experience but prefer to be less hands-on and perhaps even do so remotely.
• They want to create sound and consistent processes, but doing so in a regulatory environment that often changes can be difficult and intimidating.
• They heavily depend on distribution across booking channels to boost visibility and are keen to scale their business and increase direct bookings, but they are unsure where to start.
• They understand that there are many tech solutions that can help better their business but are overwhelmed by the number of options to choose from.
Newer tech tools on the market can offer a clear formula as a solution to the aforementioned because if you’re completing the same monotonous tasks daily, they can likely be automated. In fact, a PMP acts as an aggregator, integrating all property management solutions into one place so time isn’t wasted hopping from tool to tool.
Tools You Need To Get Started
If short-term rentals sound appealing, you should look for solutions that enable you to automate monotonous, repetitive daily tasks before you get started. A PMP can act as an aggregator that integrates all property management solutions into one place so you don’t have to hop from tool to tool, but it’s best to hold on investing in one until you have a handful of properties in your portfolio in order for it to be a positive return on investment to your business.
Other stand-alone features you should lean on immediately include the industry-standard unified inbox tool, which centralizes guest communication across channels into one inbox, or a multicalendar tool with which you can see all listings across booking channels in one place to avoid double bookings. These are a must if you decide to enter this space.
With many adding short-term rental properties to their investment portfolios, new property types have emerged throughout the U.S. that have resulted in increasingly promising growth, such as aparthotels and summer co-living spaces on college campuses. This, coupled with the rise in tech solutions that propel this space forward and enable you to manage an Airbnb business from the comfort of your living room couch, means short-term rentals are potentially the next big thing for your bank account.
At Mendbnb our multi-skilled technicians can help resolve all of your corrective and preventive maintenance plus 24/7 emergency repairs on your short-term rental property. For a Free short-term rental property assessment contact us today.