The short-term rental market has exploded in popularity amongst travelers, making it one of the sharing economy’s hottest sectors. When compared to traditional long-term leases, the estimated global market revenue of the vacation rental industry is expected to be $96.85 billion by the end of 2023. This is all thanks to rental booking platforms such as Airbnb and VRBO that host rental property investments such as vacation homes.
Needless to say, technology played a huge part in the expansion of the short-term rental industry. But how did technology and such simple booking platforms make it possible for short-term rentals? Let’s know more about the impact of technology on the industry.
Due in large part to the technology developed by these important players in the ecosystem, the short-term rental market has expanded rapidly and become much more available and engaging for renters and travelers around the globe.
How Technology Changed the Short-Term Rental Market
Many managers of short-term rental property investments are bracing for increased competition now that prices and lengths of stay have leveled out. A short-term rental that takes advantage of technological solutions will stand out from the crowd. But as an investor, how can you do that?
1. Digitized Booking Through Apps
Many people saw the potential in this trend and began renting out their extra rooms or properties on sites like Airbnb as a side hustle. These part-time gigs eventually turned into full-time careers, and these “new-age property managers” became financially independent business owners.
Using these booking applications is easier than many rental property investment owners might think. All they have to do is list their short-term rental property on the app to make it visible to renters. It would also help to take high-quality photos of the property to entice potential renters. After you list your short-term rental, you could start passively earning whenever someone books your place.
Automation of the booking process is highly encouraged by expert realtors from techvestor.com. Using these tools, property management may adapt to fluctuating booking conditions such as guest stay durations, cancellation notice times, occupancy rates, and demand in specific areas.
2. Flexible Property Management
Though interest in short-term rentals remains high, the increased availability is beginning to equal the booking demand. Unfortunately, this results in falling occupancy rates. Through the use of technological solutions, the property manager gains flexibility and leverage, allowing them to adapt swiftly to changing market conditions and maintain a competitive edge. Meanwhile, the host gains access to additional data and insights.
In today’s highly competitive rental market, property managers that embrace cutting-edge technologies will have the greatest chance of success. For instance, property managers use software tools that allow them to have virtual call center solutions. By doing so, it boosts the occupancy rate of a rental property investment because of the reduced customer query response time.
3. Dynamic Pricing
Efficiency in a highly competitive market is made possible by the dynamic pricing solutions available to property managers. When there are a lot of vacation rentals on the market, owners may need to lower their rates to keep their properties rented. However, when rental property investments are limited and demand is high, it can affect prices. These prices can be increased to maximize profits from each reservation during this season.
Property managers can still use booking software to quickly relist a vacant short-term rental at a fair price in the event of a late cancellation. This is in the hopes of filling the unit at the last minute and recouping some of the owner’s investment.
4. Efficient Short-Term Rental Operations through Smart Devices
Managers that want to proactively deal with issues like licensing, permits, lodging tax, and noise control should integrate compliance technology into their software stack. As regulations pertaining to vacation rental property investments are constantly evolving, property managers may decide to implement compliance automation technologies.
Property managers have been quick to identify the functional advantages of having the appropriate tech stack in place. This is in addition to the undeniable efficiency provided by smart house technology. One way in which smart property management may safeguard assets, boost output, and reduce inefficiencies is through the use of HVAC analytics (the monitoring and reporting of overuse and damage).
5. Better Marketing Tools
Marketing tools that help property managers promote the establishment are another game-changer. These are especially useful when dealing with fluctuating guest expectations and last-minute cancellations.
The improved marketing technology tools enable more targeted communication with past guests and/or potential new visitors across numerous channels and locations. This will increase the likelihood that potential visitors will consider the property as they begin their search for a short-term rental and again when they are ready to make a reservation.
The Future of Technology on the Short-Term Rental Industry
The last ten years have seen a meteoric rise in the popularity of short-term rentals. This rise in short-term rental property investments has changed not only where tourists stay but also the way they take vacations.
There were websites for short-term rentals before 2008, but Airbnb is widely credited with popularizing the idea of home-sharing. The platform also guided an entirely new market segment for lodging.
There followed an explosion of similar platforms, and in a short amount of time, the alternative lodging market became mainstream, giving rise to the modern-day short-term rental industry.
Although the industry has experienced downturns in recent years as a result of the COVID-19 pandemic, which has affected how the world operates, it has reached new heights when travel restrictions are lifted. Short-term rental booking platforms play a huge role in letting travelers access many properties worldwide.
Sure enough, we can only expect more pieces of helpful technological software and rental property investment tools in the future.
With demand expected to be higher than it was before the pandemic in 2021, the short-term rental market is likely to keep changing how people travel. There will also be a lot of opportunities for rental property investments because of the given demand. Nonetheless, the rise in short-term rental demand was made possible because of the accessibility technology has given us.