AI & Rental Tech. Look before you leap!

Stop wrestling with disjointed AI tools! This exclusive newsletter edition delivers the strategic roadmap you need for AI in short-term rentals. We break down why the current approach is challenged.

I recently wrote an article about AI for the Scale Community, entitled “Wake up and smell the AIr”. In this edition of our newsletter, however, we dig a lot deeper and warn of the impending challenges professional managers face.

We also wrote a short blog on the subject in 2024. Now, with such momentum, crises and cracks are appearing everywhere in the rental tech ecosystem. It is time to add more fuel to the fire and explain why, what to do, and where to focus.

At the end of this narrative is a glossary and description that explains a) where we are in the evolution of AI and the terms used to describe each model. You will notice immediately that we are just at the beginning of what smart people think is possible. OK, there are no flying cars yet, but AI is the equivalent of them hovering off the ground 80 years ago when those predictions were made.

The short-term rental industry has also been around for over 80 years and was truly a cottage industry in those days. Since 2000, it has ramped up to be the global phenomenon it currently is. The advent of the Internet, industrial-scale computing, e-commerce and mobile social and business connectivity have led to a pressure wave of 24/7/365 guest expectations, shorter booking windows, increased competition and, more recently, a climate of weaker economies and fierce attempts at governance.

AI is the latest paradigm shift across every industry, witnessing massive investments and hundreds of startups hoping to make their fortune. History shows that only a few will make it, and adopting tech is a precarious business. Who remembers Yahoo, WebCrawler, Lycos, and AltaVista?

The rapid hype around AI has created unrealistic expectations, driven investor FOMO (fear of missing out), and driven inflated valuations—often disconnected from real product maturity or market demand. This is no different in our industry.

Remember Blockchain Startups? Many promised decentralized economies and personal data banks but failed due to poor product-market fit, shallow tech execution, and national interventions. AI and Blockchain, however, make sense as they can work through the complexities of wallets and transactions, but that's for another time.

THE PROBLEM

We have a bigger problem, and it’s due to the market's age, the many legacy tech systems in use, and the lack of foresight and investment in companies as AI sailed into view.

AI will be ubiquitous across all disciplines that handle any form of data. Ignore it at your peril, and be prepared to embrace a new business management and strategy approach.

71% of respondents say their organizations regularly use gen AI in at least one business function, up from 65% percent in early 2024. (McKinsey)

THE FUTURE?

This is an article from Boom*, “the world’s first AI PMS” that resonates:

Fast forward to 2030. The life of a vacation rental property manager doesn’t look anything like it did a decade ago. Gone are the days of late-night guest messages, endless to-do lists, and scrambling to solve maintenance emergencies.

Now? AI handles it all. And the biggest problem property managers face? Figuring out how to spend all their free time.

Read the full article here.

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THE ARTICLES CONTENT

• Short video of the impending problem for managers

• Fragmented AI Approach

• The Compound Systems Approach

• Why We Haven't Gotten There Yet + Path Forward

• Current AI Tool Uses

• Reported Real-World Use Cases

• Investment Trends in ACurrent I & Hospitality

• The Cost of Not Adapting

• AI and Workforce Transformation

• Ethical Use and Governance of AI

• Preparing Your Tech Stack

• A Vision of AI-Enhanced Guest Experience

• Focus on the immediate challenges