Infrastructure and architecture are two words that frequently come up when discussing artificial intelligence (AI) in the vacation rental sector.
That’s because while most companies have been optimizing operations with AI, their number one preoccupation is futureproofing, keeping up with numerous product releases from the likes of OpenAI and Anthropic.
More on that later—for now, generative
AI has been steadily seeping in, quietly transforming a fragmented and labor-intensive sector many argue is the perfect use case for the nascent technology.
Beyond the stock theme of how AI can carry out mundane, repetitive work to free up time for employees to focus on the guest experience, newer applications relating to search, communication, selling and even maintenance are also producing results.
Flipping a switch
Vacation rental platform RedAwning uses AI to help guests find their perfect match.
“When you think about a vacation rental, every single one is unique,” said Tim Choate, RedAwning founder and CEO.
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The Petaluma, California-based company has 1,000 clients and a total of 21,000 properties, and Choate said AI has an
“amazing way of parsing” through them all, like when a traveler says, “I want a three bedroom place, and my kid likes to play ping pong, and I like to be less than two miles from a grocery store, and we want to be able to hike within these regions.”
RedAwning also leverages AI to automatically respond to five-star reviews. Rather than a simple “thank you,” its platform responds to any details mentioned, such as thanking the guest for praising the pillows.
“It's more thoughtful. People don't realize that it's not a person, but it is a much more personalized response,” Choate added, noting that AI drafts a response for anything under five stars; messages aren’t sent until they are verified by someone who
can make sure the nuances are captured.
“It takes a little while to hone AI. That's why a lot of people haven't really talked as much about the impact. Once you get it right, then you flip the switch and it's like an explosion,” Choate said. “We used to have 10 people dealing with review responses.
We now have one person spending 20 minutes a day.”
A ‘centralized AI brain’
The different bits of software that connect homes to guests seem to be equally as varied as the accommodation. Startup Besty AI, which works across 25,000 properties globally, began life as a communications
tool but realized its technology could do more.
Co-founder Sam Dundas said the company has raised $2.5 million so far, including $1.5 million in funding last summer, to “accelerate what the AI can really do.” One area it specializes in
is upselling for things like early check-ins and late checkouts.
A play on “best friend,” Besty AI has grown in tandem with key customer Host & Stay, a United Kingdom-based property management company that raised £10.5 million last year.
“We've mapped out every single policy at every property for when you can allow early check-ins and late checkouts,” Dundas said. “That alone represents about 35% of all questions that we've seen.”
When you're taking a reservation in vacation rentals, the price matters, the promotion matters, the policy matters.
Tim Choate, RedAwning
It also scans property managers’
standard operating procedures and has AI reference them to deal with any problems.
“The conventional wisdom right now is that people are building these personal assistants,” Dundas said. “That's the direction we've gone. We've launched a product called Operator, which is a system that abstracts the property manager away from the actual
conversation with the guests.”
For example, a guest could report an issue with a toilet. Besty’s Operator detects this, then contacts a plumber.
“It’s spontaneous, proactive troubleshooting. You're going to have this buffer layer between your operations ... a centralized AI brain. Eventually it’s going to come down to the property manager just being the shot-caller,” Dundas said.
Choate agrees that a key advantage with AI is its ability to go through legal documents and choose the right policy for the right request.
“When you're taking a reservation in vacation rentals, the price matters, the promotion matters, the policy matters,” he said. “In theory, you could get to a point where, almost like airline tickets, you could have a different price promotion and policy
for different dates.”
More than a veneer
Homescreen
AI is on a similar mission to Besty AI. “We want to use AI to actually be true autonomous assistance rather than just be an enhancer,” said Sharad Sundaresan, founder and CEO.
As the former head of growth and traffic at Airbnb, Sundaresan said he’s seen the problems that have “plagued this industry,” namely lost opportunities to upsell because systems weren’t talking to each other.
“It's not about just being a conversation enhancer but to connect with the property management system, to connect with the content management systems, to connect with the CRM, to connect with internal tools, be it Teams or Slack,” he said. “If somebody
says they want to request an early check-in, today staff have to do three or four things to make sure they do that.”
Back to infrastructure and architecture: Sundaresan said last year the company had to build a lot of scaffolding.
“Early on, we started with an architectural perspective allowing us to incorporate both these different changes as well as these different providers,” he said, referring to AI providers. “We can swap out OpenAI for Anthropic or Gemini, or even the free
ones like Llama, literally within a day. We are already using a mixed mode environment.”
It’s a similar story for proptech company UnderTheDoormat Group, which includes brands Veeve, Hospiria and TrustedStays.
AI works across its core technology stack and touches everything from guest information and finances to scheduling and pricing. It operates a central dataset upon which AI can work its magic.
“From our point of view, we're looking at how we can build an AI infrastructure so that you've got it embedded,” said chief operating officer Richard Bridger. “And each time there is a release, you can put it on top of that. The underlying models are
changing fast.”
Agentic potential
With the right infrastructure in place, the vacation rental sector is preparing for the next wave of innovation: agents.
“You have to make your user interface—which is currently built very much for humans—actually also respond to a robot. You can't exactly put a pure ROI on that because you don't know quite when it's going to drop. But your ability to convert could be phenomenal,”
said Bridger.
Meanwhile, RedAwning’s Choate is gearing up for AI-driven phone customer service. “We are not doing that ourselves yet,” he said. “But we know that that is coming, and [we are] exploring what all the different options are for that.”
You have to make your user interface—which is currently built very much for humans—actually also respond to a robot.
Richard Bridger, UnderTheDoormat Group
Homescreen
AI’s Sundaresan said he’s equally excited about the possibility of agent-to-agent communication but is also exploring ChatGPT’s images functionality. OpenAI said image generation became one of its most popular features when it launched in March. It’s
now just integrated
the feature into its API.
“We had started to build some products around how a guest, for example, texts or emails a bill asking for clarification. Right now, that's something a human has to open up, check to see and clarify,” he said.
While change is coming, the pace will be uneven. Data protection and copyright are in focus, as various industries question just how these tech firms are training their large language models. Publishers in particular like Ziff Davis and The New York Times
are already suing OpenAI, accusing it of stealing content.
And startup technology companies also find themselves competing with the various bigger systems already in place—and a degree of protectionism.
“Our approach will be to do everything we can to integrate with a PMS, but there are actually some PMSs who have rejected, who have flat out said, ‘Look, we want to do this in-house. We’re not going to support your integration,’” said Besty AI’s Dundas.
However, hinting at the future direction for the vacation rental sector, he said: “We often see people come to us on a PMS we don't support and then switch PMS just to use our product.”