Software Market Map for Short-Term Rentals & Vacation Rentals
A visualization & overview of the technology powering our category in 2023
The Flourishing STR & VR Technology Landscape:
Today, we’re sharing a market map (live visual linked here) and a write-up of the software powering the short-term rental & vacation rental space.
By our count, there are at least 19 categories of specialized software and more that 170 teams building software for the short-term rental & vacation rental (STR & VR) space.
These numbers are almost certainly underestimates.
For example, for some level of simplification, our market map bundled “Accounting, Tax & Payments” into one category, and our “IOT” category contains both software and all IOT hardware. Additionally, we excluded software categories that many industries use (e.g. Email, Spreadsheets, CRMs, etc.)
By our measure, there are at least 3 big drivers for this expansive and rapidly evolving landscape.
Increasing scale of the STR/VR category
Particularly in the last 5 years, capital has flowed into our industry to scale operators and to fund software & hardware teams.
The rise of larger operators has driven the need for more robust softwares.
Continued professionalization has furthered the need for many categories of software (insurance, ops, ancillary, guest experience, etc.)
Low “barriers to entry” for entrepreneurs
The STR/VR has ~100,000+ fast moving, single-decision maker businesses.
Since most portfolios are comprised of individual listings (e.g. single family homes, unique apartments, etc) operators can test technology on a single listing with ease.
Therefore, entrepreneurs can find 10+ paying customers relatively easily
All these factors are additive to a highly innovative technology landscape.
The need for specialized solutions
Running a hospitality business requires being great at many activities (e.g. pricing, cleaning, marketing, etc.)
Solving one challenge (e.g. listing management) rarely makes one better at addressing another problem (e.g. guest screenings)
It unproven that a single software provider can deliver best-in-class software across multiple verticals.
These factors have incentivized great entrepreneurs to pour into our space. And, our slightly bold projection is that we believe that the STR & VR space could well be creating the most advanced technology in the hospitality & real estate space. (If that statement is not already true today, we believe the drivers above - as well as other trends - are sufficient to make that a near permanent reality soon)
The 19 Software Categories:
#1. Property Management Softwares (PMS)
Property management softwares (PMSs) are usually the first software that professional managers & operators leverage, in order to scale their business.
Primarily, PMSs help you create and manage listings, and serve as the central information hub of your business.
And, while PMSs differ in their approach, most PMSs have a foundation focused on:
Inventory Management (photos, content, etc)
Calendar Management (bookings)
Unified Guest Comms
Around this core function, differing PMSs offer a range of expansive features & integrations, including (but not limited to):
Direct Bookings
Channel management
Guide Books
Accounting
Upsells
Revenue Management
Generally, your PMS is the nerve center of your business, and its incredibly important to find the right PMS for your business needs.
Quick Hits:
The data center for your listings
By far the largest category of STR/VR softwares, so finding the perfect solution is a challenge
For a more detailed market map, we’d again recommend that our friends at AJL have done a great job with this analysis.
Featured PMSs:
Etc.
#2. Channel Managers (CMs)
Channel Manager (CMs) help you sell your listing on multiple channels & Online Travel Agencies (OTAs) such as Airbnb, VRBO, Expedia, Booking, and many more.
CMs also often connect you to “Meta” sites such as Google, Kayak, etc.
Additionally, they distribute your listings on more specialized OTAs such as WhimStay, FabStayz, or other marketplaces that might specialize in your local market or inventory type.
In aggregate, leading CMs will help you sell across 50+ channels, a number that could increase in the future as STR & VR inventory sells across ever more digital marketplaces & networks.
In general, selling on more sites will increase bookings & revenue. As teams professionalize they are likely to increase their distribution channels from 1 → 4 → 40+, even distributing on Corporate Sales channels & the GDS (Global Distribution System) leveraged by hotels & airlines.
In addition to distributing your inventory, many Channel Managers can help you adjust prices or create discounts across channels, to help you account for different booking fees, customer types, or revenue strategies, based on the channel.
Quick Hits:
The distribution center for your listings
Helps you sell your listings everywhere
Helps you set “per channel” pricing strategies
Featured Teams:
#3. Connectivity-as-a-Service
Connectivity softwares are a recent category to emerge in the STR/VR space.
While they might look like a PMS, we believe the key difference is that many PMSs focus on building a multi-functional software in-house, whereas connectivity softwares prioritize integrating best-in-class softwares, and ensuring these systems all work together seamlessly.
Therefore, a connectivity software like Jurny will stitch together softwares like Wheelhouse, Breezeway, and other softwares, while also enabling you to bundle your software purchases.
As the number of specialty softwares in the STR/VR space has increased, these teams believe that connectivity is no longer a “feature”, it’s the foundation of a new domain of technology. (A similar evolution has already occurred in marketing/SaaS tech, FinTech, and other domains)
There are a lot of benefits and opportunities in this category that are not initially obvious, but could re-invent how operators think about developing their technology stack. Therefore, we look forward to writing more on this category in the near future.
Quick hits:
With so many speciality softwares emerging, connectivity is increasingly important
These softwares help you easily integrate the best softwares in each category
This category helps teams build very future-proofed operations stacks
Featured Teams:
#4. Revenue Management Software (RMSs)
Revenue Management Softwares are designed to help teams maximize revenue.
In the short-term rental world, “RMSs” often refer to dynamic pricing software (such as Wheelhouse) that help teams price their listings perfectly, based on market demand & the booking patterns on each listing.
In addition to dynamic pricing, RMSs often offer market reports, CompSets, and other analytics tools to help individuals & teams both research & analyze their ever-evolving markets.
Revenue Management Softwares are often among the first software systems that teams add to their technology stack, and most RMS will attach to either your PMS, your CM, our your Connectivity team, in order to help you price your listings across all channels.
RMSs can be both rule-based, data-driven, or can sometime offer both approaches (Hybrid Pricing). Additionally, these systems can be both automated or “on demand”, pushing prices to all of your channels based on pre-set schedules, on-demand, or only when you give them permission to post prices.
Quick Hits:
RMSs are the pricing & revenue center for your listings
They help you increase revenue through increased occupancy & nightly revenue
Advanced RMSs include dynamic pricing along with other revenue tooling.
Top Teams:
#5. Market Data & Insight Softwares
Market Data & Insights softwares provide you with information about how markets & listings are performing.
While sometimes equated with RMSs (see above), we believe these are a separate and symbiotic category of software.
Market data tooling prioritizes surfacing unique data. RMSs specialize is translating that data, and your listing’s booking patterns, into automatically updated pricing recommendations.
Both categories can (and likely should) be part of a revenue management team’s toolbox.
There are multiple data providers that are extremely effective at showing you Y.O.Y. trends, upcoming demand patterns, and Competitive Sets.
Market Data & Insight tools can be leveraged by teams to create their own pricing strategies, used in conjunction with tools such as Wheelhouse, or even used to inform investments and home purchases.
Quick Hits:
Market Data Platforms help you see and adjust to market trends
These tools are a great & symbiotic addition to your RMS.
In our opinion, when evaluating market data, having 2 platforms you can leverage to double-check market signals is worth the investment.
Top Teams:
#6. I.O.T. Software & Hardware
Increasingly, owners & operators are leveraging connected devices (IOT/Internet of Things) to enable “remote hospitality”.
These devices are designed to (among other things) improve the guest experience, improve your ability to remote monitor/increase the safety of your homes, and to make your operational tasks easier.
Common I.O.T. devices include:
Digital Locks
Noise monitoring devices
Digital Smoke alarms
Security Systems
In-home displays or assistants (e.g. Alexa)
And, due to the proliferation of connected hardware devices, there are now software platforms that help stitch all these devices together (i.e. Operto).
In reality, this category is broad enough to warrant its own landscape map. For now, we focused on showcasing the IOT hardware & software products that are most specifically designed around the needs of STR & VR operators.
Quick hits:
IOT is a massive sector of devices
Many devices are now being designed for the needs of remote hospitality
IOT devices can be a compelling way to decrease your operational costs, improve your guest experience, and even retain & attract owners.
Top Teams:
#7. Field Operations Software (Ops Software)
In the short-term rental space, we like to say that “operators are in the business of selling clean & safe spaces”.
Making this statement a reality is a significant challenge, which is why operators look to Ops Softwares to help them with ticketing, task management, scheduling & communication, and more. These challenges increase if/when to manage listings in multiple markets.
Therefore, many teams invest in software to schedule & track cleanings, ensure maintenance teams can quickly resolve issues, and help their Customer Services teammates easily & effectively communicate with guests.
However, Ops Software is not just about improving guest experience & reducing operational headaches. In the STR/VR space, cleanings and additional services can often be a revenue driver, increasing the value of investing in and leveraging these softwares.
Lastly, there are certain operational activities - such as trash removal or laundry - that are costly when done individually, and are therefore more effectively outsource to a specialist like CanMonkey or WashBnb, who can help you streamline your business.
Quick hits:
Can serve as your operating teams nerve center
Helps your operations teams stay ahead of guest & owner issues
Can reduce costs & churn, while also helping you drive revenue
Top Teams:
#8. Remote Operations Software & Teams
The rise of “remote operations teams” is another innovative aspect of our space that likely deserves its own market map soon.
Remote Operations teams combine both software & people to manage everything from:
Remote Concierge
Remote Cleaner Scheduling
Remote Revenue Management
Remote Trash Collection
Remote Ops & Maintenance
Now, you can hire teams that leverage both in-house & 3rd party software to make your listing or property work perfectly. Some of these teams (such as Evolve) have raised $100mm+, and are transforming the accommodations & hospitality landscape.
This is a domain where the tech/teams in the STR/VR space are pushing the envelope of what people thought was possible in terms of remote management of assets.
Quick Hits:
These teams leverage software & staff to maintain your listing
Enable you to have your asset remotely managed by a professional team
May prove cheaper (in terms of take rate) vs. an in-market property manager
Top Teams:
#9. Furniture, Fixtures & Equipment Software & Services
For hotels, the terms FF&E (Furniture, Fixtures & Equipment) and OS&E (Operational supplies & equipment) refer to all the hard & soft goods in a room/home/property.
FF&E refers to ‘permanent’ items, such as couches, mattresses, chairs, light fixtures, and more.
OS&E refers to disposable items, such as toilet paper, coffee, light bulbs, etc.
Managing these items in your listings is both challenging & important. For example, if a guest shows up and your pullout couch is broken, it’s easy to see how a guest’s experience could be impacted.
Further, if you need to replace a bespoke or valuable item, you might even need to re-photograph your home and/or update your online listing descriptions.
Initially, most individuals & teams manage their FF&E/OS&E from a spreadsheet or a task management platform. However, as teams scale, they will likely need software to help both procure, track & replace FF&E, OS&E and more.
In the FF&E category, we include teams like Cort, who are experts in furniture rentals that can be used to either furnish your listings or replace an item in a pinch. And, teams like Minoan, HostGPO, Fulhaus and others can help operators buy items in bulk at a discount, and some even specialize in helping you manage the delivery or even install of these items.
Again, as our space has grown in scale and complexity, multiple teams have emerged to help you manage this valuable aspect of your operations. And, at some point soon, we imagine this category will need its own market map.
Quick Hits:
FF&E and OS&E refer to most of the ‘items’ in your rental property
The softwares and services in this category can help you manage your spaces, buy items more quickly, and even install FF&E items in your home.
If/when something breaks or runs out, it’s important that you know & can address that issue
Top Teams:
#10. Guest Experience Software
Making sure your guests have a great experience is the foundation of building an enduring hospitality business.
Given the criticality of this, softwares have begun to emerge that are entirely focused on helping you ensure your guests have a great stay, by helping you with:
Guest Communications
Digital Access
Guide Books
Providing your guest with extra amenities
As an example of this, Enso Connect has created the concept of a digital “Boarding Pass” for guests. This boarding pass can helps guests do everything from communicate with your staff, to easily access the front door, or purchase ancillary items (e.g. Scooter rentals, tours, etc) throughout their stay.
In our opinion, these softwares should be considered as they not only improve your guest’s stay, but to both create new opportunities for you to monetize each guest’s visit, and to drive repeat bookings to your listing or business.
This is a rapidly expanding software vertical that has top teams competing to both re-invent & monetize the guest stay.
Quick hits:
One of the newest & fastest growing sectors of technology
A means to ensure your guests have better stays
A way to drive revenue & decrease operating costs
Top Teams:
#11. Direct & Marketing Software
A key aspect of any business is marketing & distribution. In the short term rental space, the best operators are so successful at marketing that 60%+ (or even as high as 90%) of their revenue is captured via direct bookings.
How do teams achieve this? For the best teams, they invest in a variety of e-commerce activities:
A great direct booking site
Re-targeting website visitors with ads
Running digital ads
Emailing past guests
Creating engaging social content
SEO via articles
And, while many US operators derive much of their sales through marketplaces/OTAs like Airbnb, VRBO, and Booking, those sites take a large percentage of revenue from each booking, increasing the importance of investing to attract direct bookings.
Therefore, as teams scale, they often invest in software & teammates to begin to create a robust direct booking business, often via advance digital e-commerce tactics.
Quick hits:
Almost every industry invests in e-commerce/marketing tools - the STR/VR space is no different
The best teams drive significant revenue & decrease channel fees through investments in this category
Much like any marketing strategy, experimentation and effort are likely the key ingredients of success here
Top Teams:
#12. Digital Guidebooks
How do you know the the STR & VR software category is starting to reach maturity?
We’d argue that when 8+ teams are building compelling digital guidebook products, that is a sign we’ve arrived.
Why do operators invest in digital guidebooks? For many reasons, including offering a better guest experience, monetizing your guest’s visit, and driving customer retention & loyalty.
With a great guidebook in your home - either on a specific tablet or on a mobile app - your team can interact with your guests, ensuring every aspect of their stay is easier.
As you scale, digital guidebooks may also cut down on the need for certain concierge or customer support services, as your guests might find information about their stay readily at hand, thereby helping them solving their own need and likely have a better stay.
Quick hits:
Help guests both navigate your home & nearby area
Can reduce customer service needs & guest complaints
Can increase revenue from your guest stays & drive repeat bookings
Top Teams:
Hostfully & Touchstay are feature in our “PMS” and “Guest Experience” sections.
#13. Upsells & Loyalty Software
Upsell & Ancillary Revenue software is one of the most exciting categories of development in the STR & VR space.
At Wheelhouse we often say, “most operators earn 99% of their revenue via bookings”, hence why we build software to improve this revenue stream.
However, in the hotel space, great operators routinely earn 15%+ of their revenue through a variety of upsells & ‘ancillary’ items.
In hotels & resorts, these items include:
Charging for early checkin/late checkout
Resort fees
Internet & Cable
Etc.
In the STR & VR space, operators & entrepreneurs are finding inventive ancillary offerings such as:
Electric Car Charging
Scooter & Equipment rentals
Firewood or Food deliveries
Tours & Activities
In short, with more space and often longer stays, there is ample opportunity for focused operators to leverage a new range of software, hardware & services to earn more from your guests, while delivering a better overall guest experience.
Lastly, loyalty is a major driver of customer retention & bookings in the hotel space. Now, teams like Laasie are bringing novel approaches to loyalty programs, designed for operators in the STR/VR space.
Again, given the pace of development in this category, we expect to build a market map for just this category soon.
Quick hits:
One of the fastest growing sector of the VR & STR space
The best operators think about monetizing their spaces and their guest stays
Investments here usually drive revenue & improve guest experience
Top Teams:
#14. Acquisition & Investment Software
For property managers, owner retention & acquisition is critical.
Similarly, for anyone growing their own portfolio, investing in the right location & asset is arguably Step #1. Therefore, a number of softwares have emerged to help you expand your portfolio.
Despite being a newer category of innovation, there are already a variety of softwares that:
Provide data & underwriting software for potential acquisitions
Help connect you to property owners looking for a property management company
Provide capital for acquisitions
Over the next few years, as more and more professional capital flows into the STR & VR space, the number of softwares helping with acquisition, underwriting & investment will almost certainly increase.
Quick Hits:
Expanding your portfolio properly is always a challenge
Great operators focus on both owner retention and owner acquisition.
This technology category is early, but promising & important
Top Teams:
#15. Taxes & Accounting Software
Managing taxes & payments, as well as running proper trust accounting, are incredibly challenging endeavors in the hospitality space.
Luckily, there are softwares that help teams address a broad range of financial challenges.
For example, Avalara is software that helps ensures you pay the right taxes to each jurisdiction, making sure your business remains in good standing.
And, Ximplifi won 2022’s DARM Innovation of the Year award for their advanced STR/VR-focused accounting software.
Again, we take the growth of softwares in this category as a strong sign of our industry’s maturity, and some of these softwares are likely essential to have in place before you scale or sell your business.
Quick hits:
Trust accounting is one of the biggest challenges in our space.
Accounting and local laws can change quickly.
These softwares can help ensure your business is solvent & in good standing.
Top Teams:
#16. Ranking & Reviews
It’s self-evident that low ranking properties and properties with low reviews are unlikely to be discovered, clicked on, or booked.
Therefore, figuring out how to maximize your rankings & reviews is an incredibly important aspect of your online presence. No surprise, various softwares have emerged that offer to help you both track & improve your rankings & reviews.
However, this is a relatively nascent area of software, and we expect activity to increase here in the coming years.
Quick hits:
A newer sector of our industry, potentially still waiting for it’s moment
Undoubtedly, your business’s online listing’s presence is a critical aspect of your revenue success
Look for more activity here as the notion of advanced merchandising becomes more important in our space
Top Teams:
#17. Certification & Regulation Softwares & Teams
Like all spaces, the STR & VR space experiences fraud & bad actors.
For example, we’re likely all read headlines about travelers who booked homes on an OTA (Online Travel Agency, such as Airbnb, VRBO, Expedia, Booking, etc.), but when the showed up, that property didn’t exist.
Additionally, in many markets the threat of local regulation looms as a serious business risk.
Hence, a number of teams are focused on creating 3rd party certifications & regulation efforts, in order to help protect both the consumers & the communities that might be impacted by our space. And, Rent Responsibly has emerged to help communities combat or develop effective local regulations.
It’s our opinion that these teams are doing important work to keep our entire category in good standing, and are certainly worth learning about and supporting.
Quick hits:
These teams are working to keep our entire category in good standing
It’s worth knowing & supporting these groups
From a business perspective, certain guests rely on these 3rd party certifications to gain trust in an operator and book their home
Top Teams:
#18. Insurance Softwares & Products
For years, innovative teams have been looking at how to create insurance products that fit the needs of the STR & VR space.
In our space, many of the assets (homes & apartments) might normally be candidates for traditional home / renters insurance.
However, as soon as you have guests renting your listing, all sorts of potential risks can emerge.
Additionally, in many vacation markets, the threat of hurricanes, floods, fires, and more poses a significant threat to both revenue streams & assets.
Therefore, novel insurance products designed to protect travelers, owners & property managers have emerged, in order to ensure that all parties have something to fallback on - if, when, and where disaster strikes.
Quick hits:
There are many unique challenges related to creating insurance products for the STR/VR space.
The guest, owners & property manager all have potentially significant risks that can take place before & during each stay
Natural disasters increasingly threaten a number of STR/VR markets, increasing the need for general insurance products for revenue producing assets
Top Teams:
#19. Guest Screening Software
In hotels, teams often rely on their front desk and onsite security to make sure that guests are safe and that a property is secure.
However, with STR & VR listings, your space may not have anyone nearby to help monitor your space. And, the range of IOT devices you might employee to protect your home - from noise monitors to digital locks - will alert you to problems, but often after its too late.
Therefore, a range of smart softwares have emerged to help you accept bookings from only the best guests. These teams leverage a variety of AI/ML techniques to identify whether a traveler is going to be a thoughtful user of your space.
Quick hits:
Knowing the identity of a person who stays in your home is essential to ensure your property, neighbors, and teammates are safe
With fraud commonplace in the STR/VR space, these softwares can decrease chargebacks and other financial hassles
Top Teams:
Caveats of this Software Market Map:
This market map is focused on driving a conversation around the breadth & specialization of softwares being built to empower operators.
Therefore, allow us to name a few caveats & limitations of our efforts to create a software market map.
Not all technology teams are listed: Again, this market map is primarily meant to illustrate the breadth of software in our space. Therefore, in some categories, we chose to limit what we surface (e.g. there are likely 1,000+ PMSs worldwide, alone!). Instead, we wanted to spend time writing content around how each category was empowering operators.
For depth within the PMS & other domains, the AJL team has produced an amazing work, such as their PMS market map.
Not all teams are categorized perfectly: Many teams offerings stretch across 2+ categories. However, for this visual, we decided to add each team’s logo only once, in what we either know or presume is their main focus area. Again, this decision was predicated on illustrating and driving dialogue around the breadth of specialty domains that are emerging in our space.
Our space moves fast! We would estimate we’ve met 25% of the teams on this map in the last 12 months alone. And, given the quality of developers entering our space, plenty of newer teams have produced stunningly good technology in a short amount of time. Therefore, we consider this market map write-up to be “out of date” as of… ~now.
Lastly, while we pulled together the information for this first mapping, any future category mapping would ideally be crowdsourced.
In fact, are you on another team we should add here? Please add your team here.
We hope this visual helps you & your team learn something new and valuable about the technologies being developed to power your business.
To review or comment on our market map (built in Figma), please click here.
The Wrap:
As stated before, our team was both surprised by the quantity, quality & breadth of softwares in our category.
As you might now agree, despite there being a multitude of categories & teams here, a deeper dive into each of these categories would certainly help illustrate the naunce of various offerings.
In general, while you might think of software as a cost center, we’d argue that all of these technology teams realize that their success is dependent on being a business driver for you - helping you reduce operational challenges, improve your guest’s stay, increase safety, scale more seamlessly, retain & attract owners, and increase the revenue & profitability of your portfolio.
If you’d ever like to learn more about these softwares, please use the links provided to reach out to these teams, who can share more about how their service can help you improve & scale your business.
And, if you want help with revenue, we’re always happy to say hello at Wheelhouse!
Cheers,
Team Wheelhouse
Know another company we need to add to this list?