Is AI Ready to Help Your Vacation Rental Guests?

Introduction

The pace of AI’s improvements in the past year has been astonishing. Many short-term rental hosts have begun to use it to help with their businesses. A recent survey from Hostaway showed that larger property management companies are leading this charge while smaller hosts are following. Specifically, 53% of managers with more than 50 properties state that they are using AI tools regularly, compared to 34% of managers with under 10 homes saying they are using AI in some form in their business.  

Of those surveyed, hosts said that the number one way in which AI can have the biggest impact is in guest communications. This begs the question - are the big hosts right by leaning into AI faster, or are the smaller hosts right to be cautious? Has AI reached the point where it can be helpful with guest interactions?

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Hosts waiting to adopt AI have good points

Sometimes answers are wrong or unhelpful. It isn’t intellectually honest to overlook the limitations of AI in understanding complex, nuanced human emotions and contexts that can be present in guest interactions. AI is bound by limitations like:

Data Access: AI relies heavily on the data it has been trained on. If this data is outdated, incomplete, or biased, the AI's responses can be inaccurate or misleading. 

Contextual Understanding: AI sometimes struggles with understanding the nuances and context of certain inquiries. AI may not fully grasp subtleties like sarcasm, cultural references, or personal experiences, leading to responses that can seem irrelevant or inappropriate.

Complex Problem-Solving: While AI is proficient in handling straightforward queries, it can falter with complex problem-solving that requires deep, multi-layered understanding or creative thinking. 

Emotional Intelligence: AI lacks emotional intelligence and empathy, making it less effective in situations where understanding human emotions or providing emotional support is crucial. This can be particularly noticeable in sectors like hospitality where a personal touch is often valued.

Misinterpretation of Queries: AI might misinterpret questions due to ambiguous phrasing or unfamiliar terminology, leading to irrelevant or incorrect answers.

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So why are other hosts jumping in?

The flip side asks a reasonable question: Should the value of a service be judged solely on the missteps? Consider how a vacation rental manager might onboard and train a new employee. Mistakes may be made, but if the new employee is learning from them (and other considerations like work ethic are also getting high scores), chances are that it was a good hire.

Thinking about that in the context of an AI agent is useful. Consider implications beyond the impact of a real-time AI response. Is the system learning? If so, investing in such a system can yield significant returns down the road. Said another way, what is really most important is how errors are addressed and corrected. An AI system that learns from its mistakes is a system worth investing in for the long-term. 

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Alternatives to AI

No discussion about a specific approach is complete without considering the alternatives. In the case of providing guests information about the property and the local area, that often boils down to these major categories of optional solutions:

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What about guidebooks?

In this age of information overload, more is not better. When you give a guest a guidebook app, you are basically telling them “Here is everything you need to know - search until you find it.” Having a platform where guests can ask a specific question and get a direct answer can be incredibly beneficial for them. Navigating a guidebook for answers isn't as efficient as receiving a straightforward response. AI will bring benefits that go beyond the menu-driven interface of today’s mobile guest-facing apps.

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What about humans?

At some point in our journey as consumers, all of us have had negative experiences with customer service representatives. Despite this, humans remain the gold standard when we need help. But the cost of employees is one of the highest that hospitality businesses face. Further, often people don’t like answering the same questions again and again. Retaining quality staff involves assigning less mundane tasks, and employing technology to fill the gap.

AI can get a lot of things right. Many guest questions are by definition ‘Frequently Asked Questions’. AI excels at enabling guests to self-help and to get those quick answers. That said, while AI offers efficiency for both the guest and the host, it cannot fully replace the human touch in guest communications. A balanced approach, where AI handles routine inquiries and escalates complex issues to human staff, might be the best way forward. This hybrid model ensures efficiency without compromising the personalized care that is essential in the vacation rental industry. 

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Conclusion

The debate over the role of AI in guest engagement for vacation rentals presents a nuanced picture. While acknowledging the limitations of AI, such as its challenges with data access, contextual understanding, complex problem-solving, emotional intelligence, and query misinterpretation, it's essential to recognize its evolving capabilities. AI's ability to efficiently handle routine inquiries and learn from its mistakes suggests potential for significant long-term benefits. However, AI should not be seen as a standalone solution but rather as part of a hybrid model that combines its efficiency with the irreplaceable human touch. 

By balancing AI's use with human oversight and intervention, vacation rental hosts can balance guest satisfaction and operational efficiency. As the technology matures and learns from its experiences, AI's role in enhancing guest engagement in the vacation rental industry will likely grow, making it a valuable asset for those willing to embrace its strengths and compensate for its weaknesses.