Guest Post: The tech convergence in the hotel and short-term rental sectors

A senior hospitality industry roundtable organised by revenue management specialist IDeaS discussed how the two sectors are finding common cause due to customer demands and innovation. The Plum Guide's Doron Meyassed and iDeas' Klaus Kohlmayr reflect on the discussion.

When it comes to innovation, the hotel and short-term rental industries find themselves in very different situations.

On the one hand, hotel owners and managers have become dramatically more open to new areas of technology coming out of the pandemic. 

Driven by the rising costs of operations coupled with a severe labour shortage, the push to adopt new kinds of tech solutions has never been stronger – so much so that North America’s leading  hotel advocacy group and its top technology solutions association have combined forces.

At the same time, the industry remains mired in a complex tangle of core legacy technology tools, which have been around for decades and continue to hold back innovation and fully enhanced guest experiences. 

Beginning with the traditional property management system (PMS) and extending across other layers of the tech stack, hotels are still too often slow to change, adapt and embrace solutions to do business better and more efficiently.

The short-term rental industry finds itself in the opposite predicament. Because the industry is relatively new, there are no commonly accepted platforms or legacy systems constraining management of properties and guest service. Innovation is happening fast. 

But new, untested platforms and technology fragmentation is the reality on the ground - a fact complicating even more the growth and operational complexities in an industry which has already seen a rocky road the past couple of years.  

With all these differences, the lines between different kinds of accommodation are blurring: As hotels integrate elements of the vacation rental and short term stay models into their products, short term rental providers are standardizing offerings and adopting service practices common to traditional hotels.

Sensing an opportunity for productive dialogue, thought leaders from the hotel and short-term rental industries converged in London last month for a roundtable discussion on innovation, sponsored by hotel revenue management leader IDeaS.

Here is a summary of some the key take aways from the roundtable:

• Starting from different places, there are nevertheless similarities in the development of offerings and technologies powering the hotel and short-term rental space. Both are driven ultimately by the guest experience. 

Guest needs and preferences have changed dramatically in recent years, especially post-pandemic. Features such as in-room kitchens, expanded practical living space and socially dynamic common areas have become “must haves,” for hotel and short-term rental owners alike. Both are taking their cues from the new, “nomadic” kind of traveller, building and outfitting lodging assets accordingly. 

One long-time hotelier told the roundtable that he marvelled at the speed at which his thirty-year old company has adopted the short-term model in certain markets, even purchasing buildings specifically for use as Airbnb properties.

• Both hotel and short-term rental professionals see the evolution of API-first, data-driven models as essential to the success of their businesses. 

As never before, taking superior care of guests and running efficient, profitable properties demand a cloud-based approach that relies on automated, intelligence-driven decisioning that is impossible to achieve without the right kind of cloud-based technology infrastructure.

For example, short term rental leader Plum Guide uses complex algorithms to vet luxury properties for the discerning traveller, and to match travellers with properties of their choice. The ability to do so thoroughly and without flaw, is especially important to the luxury traveller who expects seamless experiences delivered without hassle.

On the hotel side, revenue management provider IDeaS processes billions of hotel pricing scenarios each year through its automated platform, helping more than 20,000 hotels worldwide maximize revenue 365 days a year. It is a long way from using Excel spreadsheets to manage hotel pricing and revenue strategy!

As consulting firm Deloitte noted, “the future of the cloud is here” – and no accommodations brand can hope to remain competitive without it.

• Technologically speaking, we are still closer to the beginning than the end.

As noted, the short-term rental industry is just now coming together to adopt standards and practices to enable innovation in their businesses for the long-term. 

That’s not surprising, given that the industry only began maturing around a decade ago.

For their part, hotels have developed greater tech sophistication in the past two decades than in the entire history of the industry before it. Spurred first by the challenges of the OTAs and other online booking engines, hotels have had to adapt quickly – sometimes bypassing patchwork solutions by adopting fully mobile and lightweight decisioning models that were unimaginable just a few years ago.

• As the technology evolves, there is benefit and incentive for both the hotel and short-term industries to build it in a way that is “multi-segment” and “multi-purpose.” 

As short term rental companies add to their pfferings and hotels adapt quickly product for a newly minted short-term stay consumer,  the lines continue to blur between the segments.

This is the strongest argument for converging technology platforms, a fact noted by the roundtable group.

As it becomes less and less clear to consumers what differentiates hotels from other kinds of rental accommodations, guest-facing and operational technologies will need to adapt to promote the efficiencies and profitability we all want.

Can we reach a place where the guest experience at a hotel or short-term rental home is completely automated, beginning with booking research, extending through on property check in, and including all elements of guest service through check out?

That is unclear.

But the group that convened in London clearly believes that changing guest preferences and the rapid development of new technologies are pushing us in that direction.

An expanded dialogue that includes not only hoteliers, short term rental owners but also investors, technology partners and even guests themselves will provide an indispensable knowledge base for completing the journey.

Who was on the Panel?

Co-moderator: Lee Hayhurst, executive editor, Travolution.com

Co-moderator: Michael Frenkel, president of MFC PR

Mike Chuma, vice president of global marketing, IDeaS

Merilee Karr, founder and chief executive, Under the Doormat Group and chairp UK Short Term Rental Association

Shumi Khan, senior vice president revenue management, Accor

Klaus Kohlmayr, chief evangelist and development officer, IDeaS

Omer Lang, senior vice president of operations, The Gold Tree Group

Doron Messayed, chief executive, the Plum Group

Paul Mulcahy, managing director for EMA, Asia Pacific and India, RCI Wyndham Destinations

Ronen Nissenbaum, chief executive, Fattal Hotels

Joe Pettigrew, chief commercial officer, Hotel Asset Management at Starwood Capital Group

William Phillipson, board advisor, Will Phillipson Consulting

Sean Worker, chief executive, author (The Adapters), board member