Five ways AI can help boost your vacation rental

My colleague Marco Cupidi recently wrote about how technology helps vacation rental hosts and property managers succeed in an increasingly competitive market. Considering that this trend isn’t going anywhere, I’d like to continue the conversation, looking specifically at the biggest technological disruptor of the last year: artificial intelligence.

 

While it’s true that AI adoption in the vacation rental industry has increased substantially, many hosts and property managers may not be taking full advantage of its potential. We see many people implement AI for a certain task, but then fail to use it in other areas of their business. This is especially true, since there are so many new AI tools popping up every day that it’s difficult to know which ones can really make a difference.

 

So I think it’s worthwhile to look at some essential AI tools that can support new hosts who are just getting started, taking them from the initial steps of market research and branding to something as complex as revenue management. Here are five ways you use AI to enhance your vacation rental:

 

 

Market research is typically the first thing new hosts need to tackle when starting a vacation rental business. To set yourself up for success from the beginning, you need to do a deep dive into the industry in general, your competition and your target market.

 

Unsurprisingly, AI can analyse data much more quickly than we ever could. For example, you could ask ChatGPT, “Which UK cities provide the best return on investment for vacation rentals in 2024?,” prompting it to use data to back up its recommendations. Or you could get even more specific and ask, “Which cities in the UK have the best cap rates in 2024?”

 

The caveat here is accuracy, as we’ve seen that ChatGPT doesn’t always provide correct answers. With that in mind, it’s best practice to ask that the chatbot provide specific numbers and sources to back everything up – and of course to review everything yourself. Another option is to pull the data yourself from sources such as AirDNA, input it into ChatGPT and ask for insights.

 

The same goes for competitor and customer research. Copy and paste your competitors’ listings into ChatGPT and ask for amenity recommendations to make your own offerings as competitive as possible. You could even input competitors’ reviews and have ChatGPT analyse guest feedback, helping you understand guest preferences and tailor your listing to meet their expectations.

 

All of this considered, AI-driven market research can provide a major confidence boost to new hosts who are worried about positioning themselves competitively from the outset.

 

 

Branding often stumps new hosts, especially those who are drawn to the numbers side of the business but less so to the creative side. Unfortunately, this isn’t an “If you build it, they will come” situation. Just opening a vacation rental doesn’t mean you’ll attract guests, so branding is crucial.

 

This is another area where AI has had tremendous success, giving hosts creative branding ideas that target their ideal customer base. You can use ChatGPT and other AI chatbots to do this, and a number of companies have designed tools specifically for this purpose as well. For example, many Lodgify clients have relied on our Airbnb Description Generator to create listing titles and descriptions that help their rental stand out.

 

Going even further, property managers can use ChatGPT to create marketing content such as website copy, blogs, social media copy and more. ChatGPT’s paid plans even offer a logo creator that can generate professional-looking logo designs.

 

As Lodgify’s SEO & Content Manager Alberto Fernández explains, this can be a game-changer for hosts who simply don’t have the time or headspace to create these kinds of content themselves. “The best hosts know marketing is essential to the success of their business, but that doesn’t necessarily mean they have the time for it,” Alberto explains. “For hosts who are simply too busy to create content from scratch and don’t want to hire a freelancer, AI can be a huge help.”

 

 

So, you’ve published your listing and are getting booking requests. The next step is guest screening, and this is another area where AI can help.

 

Many hosts see guest screening as rather tedious, especially when they’re eager for reservations and it would be so much easier to simply accept the booking. Of course, guest screening is an important part of risk management, so if there’s a way to simplify the process of reviewing guest profiles, it’s certainly worthwhile.

 

Thankfully, solutions such as SUPERHOG, which Lodgify integrates with, automate guest screening to save hosts time and protect them against problem guests and fraudulent bookings. SUPERHOG works by validating each guest’s data and comparing it to sources such as LinkedIn profiles, data breach records and sex offender registries.

 

When you’re in the middle of other tasks, not having to constantly switch gears to screen guests, while still having the peace of mind that guest-screening brings, can make a huge difference.

 

 

AI has also been game-changing when it comes to how hosts communicate with guests.

 

Most hosts know personalised messages and quick responses are essential to creating a positive guest experience. But new hosts find out soon enough that dropping everything to draft lengthy messages isn’t only time-consuming, it can be counterproductive to everything else you’re managing.

 

That’s why there’s been such a positive response to AI applications that help craft guest messages. Of course, you can use ChatGPT to help write these messages by inputting the information you want to be covered. For example, you could ask ChatGPT to “Write a friendly message to a vacation rental guest explaining public transportation options from London Heathrow to Piccadilly Circus.”

 

However, nothing beats tools such as Lodgify’s AI Assistant to save time, especially when it comes to questions about your property itself. Imagine a guest asks what they need to do for checkout. You could have ChatGPT help you write a message, but you’d first need to input your check-out details so it has information to work with.

 

Lodgify’s AI Assistant, on the other hand, has access to all your property details, including checkout information, and can automatically draft a response. All you have to do is review the message and click send. And because our AI Assistant is integrated directly within our unified inbox and reservation messaging system, you don’t need to leave the Lodgify platform to take advantage of it.

 

 

When it comes to revenue management, dynamic pricing is the must-use tool. Also known as “smart” or “surge” pricing, dynamic pricing is a strategy that involves automatically calculating and optimising rates in real time. Dynamic pricing tools do this by using algorithms that consider factors such as seasonality, competition and local events.

 

While dynamic pricing certainly doesn’t have to be the last thing from this list that hosts implement, many hosts return to their pricing strategy once their business is gaining momentum. They may have implemented a simpler pricing strategy to get started and are now interested in seeing how they can maximise profit.

 

Dynamic pricing tools are great at this because they remove the need for constant monitoring, tedious manual adjustments and trial and error. You can activate the tool, and then rest assured that it’s on top of your pricing strategy.

 

What’s more, dynamic pricing really is effective at maximising bookings and revenue. For example, our Lodgify Dynamic Pricing tool increases revenue by an average of 20 per cent.

 

 

AI has brought incredible changes to the vacation rental industry in the past year alone, but we know these changes are just the start. While the technology’s rapid growth makes it difficult to predict exactly how we’ll be using AI a year from now, the one given is that it will continue to disrupt the market.

 

At Lodgify, we see AI as an opportunity for innovation and have ambitious plans for further implementation. And as new use-cases continue to unfold in the future, we’ll remain committed to closely monitoring and experimenting with them ­– not only to improve our offerings for our clients, but also to push the limits of where we can go as an industry.

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