Shifts in Booking Sources and AI Adoption Reshape Short-Term Rental Trends, Study Reveals

• The vacation rental industry is experiencing a shift in booking sources, with Airbnb bookings dipping and an increased reliance on direct bookings and alternative platforms. 
• Property managers increasingly integrate artificial intelligence to streamline processes, improve guest communication, and potentially boost revenue.

A report from the property management platform Hostfully revealed significant shifts in the vacation rental industry in recent years. Entitled “2024 Hospitality trends in the vacation rental industry,” the study provided insights into changing booking sources, the impact of technology, and the role of artificial intelligence in the sector.

The report is based on a survey of 347 vacation rental operators, ranging from single property managers to large vacation rental management companies, predominantly based in North America. According to Hostfully, the findings indicate a market adjusting to economic challenges, with technology and artificial intelligence expected to play pivotal roles in maintaining competitiveness.

The study showed a steady decline in Airbnb bookings, which have dropped 8% since 2022. Instead, operators are shifting towards direct bookings to evade third-party online travel agency (OTA) fees and diversifying through multi-channel distribution facilitated by property management software. Emerging players, like Google, are also playing a more significant role, accounting for 5% of bookings.

The report also highlighted the industry’s growth through the addition of new listings, which is the most common strategy among property managers. High occupancy rates remain a top goal for most operators, with 85% aiming to boost occupancy.

Short-term rental (STR) operators increasingly adopt Artificial Intelligence (AI). The report revealed that 73% have used external AI tools like ChatGPT, and 43% have used AI capabilities within their vacation rental software. AI is not only helping streamline processes but also reportedly driving revenue. However, the study cautioned that correlation does not necessarily mean causation.

Looking into the future, 48% of respondents anticipate that AI will significantly impact guest communications, and 28% expect changes to marketing tactics. This finding is noteworthy as 20% of respondents identified guest communication as a pain point. As the industry continues to evolve, the strategic adoption of technology will likely remain a key trend.