While the world order resuming back to normalcy, I was researching more about Airbnb , I stumbled upon how sophisticated the behind the scenes operations for rentals management has grown

What goes into optimising the holiday rentals for hosting providers like Airbnb and Booking.com?

Enter the world of Property management systems(PMS)

Property management system handles everything that goes into maintaining and taking care of all of your vacation rental properties, including day to day operations. They include on-the-ground tasks, end-to-end management for all of your rental homes’ needs, including online bookings, automated payments, and guest communication, reviews and feedback automation. Those 5 star reviews and super hosts has lot of smart work happening behind the scenes. These PMS’s provide the muscle for small nimble hosts to compete with Marriott’s and Fairmont’s of the world who rely on Oracle OPERA and other old-school battle tested solutions meant to manage large inventories and hundreds of workforce.

iGMS and Guesty are one of the leading names in the property management systems for vacation rentals homes

Channel management

A channel manager synchronizes all of your listings across distribution channels. Popular property management systems provide built-in channel managers or easy integration options. Channels are popular booking engines, Airbnb, Booking.com, Expedia, Agoda, Hostelworld, HotelSpecials, TripAdvisor. While channel management makes sure the inventory booking is maximised but looses the exclusivity for certain types premium properties.

iGMS and Guesty provides inbuilt channel management while there are dedicated channel managers for wider reach who do not provide PMS

AI Optimisation

Dynamic pricing is a new kid on the block which integrates with your PMS and leverages data points listed below to dynamically price the rentals. Airline industry has mastered the art of dynamic pricing and so have the big boys in the hotel business.

  • Reviews
  • Local booking trends
  • Competitor pricing
  • Competitor occupancy rates
  • Seasonal fluctuations 
  • Historical booking rates
  • Local events
  • Days of the week
  • Length of stay
  • Availability
  • Amenities
  • Location
  • Property type
  • Neighbourhood
  • Proximity to vital services

Key players here are Pricelabs, Wheelhouse and DPGO

Thats all for now! Hopefully this analysis gives you enough insight into the where the vacation rentals business is heading and build positions in upcoming names at the right entry point

Airbnb valuation as of 30/07/2022