With rates and stays finally taking a breather, many short-term rental property managers are experiencing increased competition and are poised to step up their digital game. Leveraging technology solutions can set short-term rentals apart from the competition. The application of technology solutions can provide property managers with convenience and leverage, allowing them to quickly pivot in response to market conditions and remain competitive. It also gives the host/owner more data his insight. Key technologies top priorities for administrators include dynamic pricing, marketing, and compliance tools.
Read also: Real Estate Pulse: What You Need to Know About Short-Term Rental Laws
Technology Gives You a Competitive Edge
Short-term rental demand continues, but the increase in supply has caught up with reservation demand, and occupancy rates are declining across the board. Property managers who utilize the latest technology are well positioned to manage rental properties and compete in a crowded and competitive marketplace.
A recent survey conducted in partnership with Phocuswright found that 59% of property managers are concerned about the viability of future business operations due to constantly changing rules and regulations. Many property managers recognize that technology tools are integral to their property operations and insist that owners integrate a complete technology stack into their operations. The same survey found that 61% of his property managers employ a pricing system, 50% use rate monitoring, 59% use a calendar manager, and 61% use his website with booking functionality. is created.
Advantages of dynamic pricing
It is true that hosts/owners are primarily focused on improving their bottom line (see Figure 3 in Phocuswright’s May 2022 White Paper). So it’s no surprise that property managers have embraced and facilitated automated, dynamic pricing and booking tools. These technologies enable property managers to respond to rapidly changing market or booking conditions such as length of stay, last minute cancellations, area occupancy and demand, and other booking needs. Dynamic pricing tools increase property manager efficiency in a highly competitive environment. When there are many short-term rental properties available in an area, the price should be adjusted to attract tenants and keep the property occupied. However, if there are few options and demand is high, you can raise your prices to get the most revenue from each booking and ensure revenue is not left on the table. Owners use booking tools to get properties back on the market as soon as possible at the right rate, reoccupying short-term rentals and earning returns for owners.
Benefits of marketing tools
Other groundbreaking technology additions are marketing tools that allow managers to promote properties, especially in the face of changing consumer demand or last-minute cancellations. According to Phocuswright’s research, due to their size, property managers are much more likely to use technology compared to smaller, independent hosts (see Phocuswright’s May 2022 white paper (see Figure 6). Enhanced marketing technology tools let you more strategically reach out to previous and look-alike guests across multiple platforms and geographies. This ensures that lodging is your guest’s first priority when they start searching for short-term rental properties and are ready to book.
Benefits of Compliance Technology
Compliance technology is an essential technology stack for property managers looking to proactively address everything from licenses, permits and occupancy taxes to noise control. Property managers may also choose to include compliance automation tools to stay ahead of changes in rules and regulations that affect short-term rentals. As owners add short-term rental units, property managers face an even greater challenge of tracking the various mandatory compliance obligations for each individual unit at each location. jurisdiction. Compliance technology not only streamlines processes, it also reduces the risk of human error and creates a competitive advantage. Legacy software systems are outdated and inefficient, but new cloud-based compliance technologies can help:
• Tax compliance
• Licensed and registered for short-term rental status
• Reports on both tax and occupancy statistics
• Data extraction and transfer
• Reservation and rate data entry
• Income calculation
• Property monitoring such as noise control, energy usage, check-in/check-out
Gain a competitive edge with technology upgradesThe short-term rental environment has become very competitive. Proven technology helps property managers gain an edge and stay compliant. Digital transformation such as dynamic pricing, marketing and compliance technology tools will play a key role in taking short-term rentals to the next level. These tools help landlords maintain high occupancy rates at the best-to-market rates and help property managers with government-mandated compliance burdens, from short-term rental taxes to being a good neighbor and overseeing their properties. We guarantee that. Tech tools are available to support short-term rentals in a tight market and increasingly regulated conditions.
author: Pam Knudsen is an executive at Avalara, leading multiple tax teams including lodging, beverages, alcohol, telecommunications, sales and use tax. Not only does she serve as a key voice in vacation rental tax compliance and regulation, but she brings deep experience across software/SaaS technologies and her ERP systems. Pam joined Avalara in 2012.