Navigating the Waves of Change: Industry Insights and AI Innovations in Short-Term Rentals

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Happy Friday!

It’s been a while since we posted a piece of industry news, but we are thrilled to announce that we will be providing you with an industry news blog every Friday. We mean it, EVERY Friday. So, let’s dive into it.

Friday vibes are in full swing here at OwnerRez, and so is our excitement for the new unified inbox we released last week. Have you had a chance to check it out? Discover the remarkable features that make it stand out—find out more here

Hawaii is heated this week, and we aren’t talking about weather conditions. Hawaii short-term rental operators are facing an uncertain future, causing travelers to worry about their upcoming accommodations. Hawaii’s vacation rentals have been experiencing a decline in occupancy at 52%. To make matters worse, Maui County is considering shutting down 7,000 vacation rentals, specifically ones in apartment-zoned areas. Visitors are already adjusting plans and booking hotel stays due to the uncertainty of vacation rentals. Hotels are stoked and enjoying the wave of increased bookings (no surprise there), while many short-term rental operators intend to ride out this wave. In an effort to entice visitors, some operators are decreasing their rates, while others are standing firm in hopes that they will stay in business. The County Council is currently reviewing a 2024 economic impact study, which has yet to be released to the public. While the results of the study are being considered, the proposed bill is on hold.

Speaking of waves, let’s discuss the tsunami of AI-powered travel trends and the future of vacation rentals. While some hosts are experiencing a drop in bookings, others are flourishing by adopting AI-powered tools. An Arizona-based boutique mini-resort achieved a 90% occupancy rate in its early months by implementing AI-powered pricing strategies like “Name Your Price” and “Price Alert”. The owner of this boutique resort claims that operators using direct booking strategies and AI-driven tools are outperforming the industry average by 20%. So, what AI tools are fueling this smart-bot tsunami? Tools such as 24/7 virtual concierge, dynamic pricing, AI gap scheduling software, and AI scheduling software for housekeeping. Seem like a bit much here? After all, we are in the hospitality business, and AI will never replace genuine hospitality. However, we can agree that artificial intelligence is simply enhancing the business. This article claims that hosts integrating AI are boosting revenue by 15%. That’s a plus! Are you riding the AI wave? It looks like most OwnerRez users are already halfway there because the vast majority utilize one of our dynamic pricing integrations. Let us know in the comments how you’re implementing AI in your business. 

Check back next Friday for another industry news update! 

2 Comments (add yours)

Foster Shae Geta
Feb 8, 2025 6:30 AM
Joined Apr, 2024 1 post

Hello everyone, Happy OR user here! We use Dynamic Pricing, but not AI buddy (or equivalent) for items mentioned in this week’s article regarding industry news. I do have “standard replies” go out regarding check-in info etc, and have been asked a few times: “We thought this was only AI, and wanted to reach out to see if there’s actually anyone there”. Does anyone that uses AI to directly communicate with renters have any good feedback on this? I like the concept, but wouldn’t mind here from an actual PM that is using it. 

Thanks as always!

Harald

fostershaegetaways.com

Nathan
Feb 20, 2025 10:24 AM
Joined Jun, 2023 19 posts

Hi Alisa, after much research, I'm using an AI messaging tool and have found it helpful, although there are some frustrations. They aren't nearly as good as OwnerRez when it comes to taking feedback/improving their product.

I realize the idea of having AI respond to guests can be a polarizing topic, but AI messaging tools have a lot of functions, even if PMs don't have it automatically responding to guests. Here are some of the benefits I've found:

  1. It sends me (and/or the property owner if I choose) action items that come up in the OTA chat to WhatsApp, even if you don't have AI auto-responding. Real example: New action item: The guest would like to add a second night to their reservation (February 7th to 8th). 
    Property/guest: XXXXXXX/XXXXX XXXXXXX.
    Status: Incomplete.  If you had AI messaging auto-replying, you'd receive these WhatsApp messages when human action is needed.
  2. It tracks guest sentiment for all bookings and gives an AI summary. Real Example: Sentiment: Positive: The guest explicitly mentioned that they had a very good stay and expressed gratitude and friendliness throughout the conversation, despite noting a minor issue with the door handle.
  3. It can automatically draft replies to guest messages which is a great time saver. The draft is also what AI would have automatically sent so it's a good test in the beginning. I use these drafts for properties with high nightly rates where I don't want to have AI auto-replying. I just click a button and it drafts a conversationally aware message using my tone/conversation style and full property knowledge that I can then edit and/or just send. When I'm with my kids, even just one instance of being able to click a button to draft a message and immediately send makes it worth the monthly cost. 
  4. I do use the auto-reply function for properties that have low nightly rates. I've manually added a lot of information about the property and how to respond to the "knowledge base" and feel it's trained pretty well. The property I'm testing the 24/7 auto-messaging on is also 6 time zones ahead so it's great for overnight. I can also decide for each property how I want the AI to respond if it doesn't know the answer, e.g., Defer to host Ex. "...the host will assist once they're back online..." Defer to team Ex. "...I'll have to check with the team..." Embody host Ex. "...I will check and get back to you..." Share direct contact Ex. "...please contact the host at..." Do not respond. We've gotten a lot of compliments/positive feedback in reviews for being responsive and helpful. I'd have to imagine it also keeps the Airbnb algorithm happy to always respond within a few minutes.
  5. There is a feature to upsell gap nights although I still do this manually with templates. The AI tool doesn't have a way to send both upsells (before and after) at the same time in a single message, so it has to be two separate messages at different times which seems clunky.
  6. Everything can be customized at the property or portfolio level. So you can tell it to be polite and concise for all properties but only tell it to use Celsius/meters for a specific property if you have a mix of US/EU properties.

This doesn't intend to be a comprehensive list, but I wanted to share some of my thoughts on AI messaging and the potential value it brings, even if you don't remove the human component to messaging.

 

p.s. We use dynamic pricing as well. If anyone is reading this and doesn't use dynamic pricing - you need to!