How the Vacation Rental Industry Will Rebound in 2021 Thanks to New Tech

Vacation-rental software has quickly expanded, lowering the barriers of price and effort by automating tasks like cleaning and check-ins.

Written by Jeremy Gall
Published on Feb. 17, 2021
How the Vacation Rental Industry Will Rebound in 2021 Thanks to New Tech
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The vacation rental industry has boomed over the last few years, and I’ve been lucky enough to be part of it.

I dove headfirst into vacation rentals in 2006, when I started a company called FlipKey. Managers were struggling with listing reputation and brand awareness, and we solved this problem through our verified guest-review platform. TripAdvisor acquired the business in 2013. I then founded Breezeway in 2016, an operational technology platform that helps short-term rental managers coordinate, communicate and verify detailed work so that they can deliver the best service experience to clients.

Once thought of as a second-home side-gig, our segment of travel has grown up and become professionalized — and it now competes with all accommodation types on the major booking platforms. Skift Research estimates that global gross bookings of short-term rental properties grew 7 percent in 2019 to a total of $115 billion.

Airbnb’s staggering recent IPO was another major milestone for vacation rentals, and it symbolizes the industry’s resilience during a challenging year. Short-term rental properties have emerged from 2020 as the accommodation of choice for domestic travelers who want more space and privacy in remote destinations. In fact, short-term rental RevPAR decreased just 4.5 percent YoY compared to 64.8 percent for hotels.

So, where does technology come into the story? Here are two tech trends quickly emerging in the vacation rental industry.


1. Tech Adoption Is Accelerating

The pandemic has fueled increased adoption of technology that enables vacation rentals, hotels and other hospitality providers to meet the enhanced demands of guests. This tech revolution was always going to sweep over hospitality — the seeds of change had been planted with the push toward quality and service — but the pandemic has certainly sped up the wave of tech adoption across the board.

When I founded Breezeway, operational technology was nascent. I had seen from my time at FlipKey that property managers were starting to allocate too much time and resources toward scheduling teams, tracking details, monitoring compliance and coordinating work over multiple locations and properties. The issue was that hospitality operators didn’t have purpose-built tools to automate these back-end functions. Instead, they used manual workarounds like Excel spreadsheets, paper checklists and GroupMe chats. I sensed that technology could automate the sheer number and complexity of operational tasks but underestimated the extent to which it could empower exceptional hospitality experiences.

The software ecosystem in vacation rentals quickly expanded, lowering the barriers of price and effort by automating certain business functions with technology. Last year’s events saw the margin of error grow smaller with respect to maintaining property quality, safety and cleanliness, and more professionals are seeking smart tools to ensure quality and deliver deeper service.


2. This Tech Is Becoming More and More Fragmented

As hospitality providers professionalize their operations and even create more polished brand offerings (such as Jurny and Casai), the need for purpose-built technology has grown. This brings me neatly to my second trend: the fragmentation of technology in the hospitality vertical.

Technology fragmentation is predicated upon the rising expectations for guest experiences. In fact, Breezeway’s own 2020 property operations survey supports this theory and illustrates hospitality’s focus on providing high-quality accommodations to alleviate traveler sensitivity to cleanliness and safety. (The majority of operators think cleanliness and safety will be the most important factors at the point of booking.) Guests are prioritizing these factors over everything else, minimizing the margin of error with respect to property preparation.

It’s no longer acceptable for providers to use a blanket approach to technology; it’s just too easy for details to fall through the cracks. Customer experience is core to hospitality, and travelers will be disappointed if service isn’t up to their high standards. Imagine turning up at your vacation rental after a long drive to find it wasn’t clean enough? Our report found that 66 percent of managers are independently inspecting every property prior to each arrival, in recognition of this increased focus on quality and standards.

Industry-leading managers invest in technology products that are more targeted in focus and deliver a deeper performance. By this, I mean customized tools empowering housekeeping staff to complete quality cleans, inspections and maintenance jobs. (Since the pandemic, property cleans are taking an average of 20 minutes longer than before, making these operations even more important.) They’re also developing innovative messaging tools, for example, that enable property managers to communicate directly with guests and owners.

Using different tools for different business functions — fragmentation — is certainly optimal. If tech products are tailored, easy to integrate with and more user-friendly, then software can add tremendous value to business operations.

I’m seeing more and more intelligent solutions coming to the market as vacation rentals continue to mature. This should continue, as there remains much more value to deliver to managers striving to make their operations and processes as lean and efficient as possible.

Continued tech innovation and adoption on an ever-growing scale should ensure that the vacation rental ecosystem remains an exciting marketplace to operate in. I, for one, am looking forward to watching these trends play out.

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