Rethinking STR hospitality – it's about service, not smiles

By Richard Vaughton, Host Planet Columnist

I believe the concept of 'hospitality' within the rapidly evolving short-term rental (STR) market warrants examination. While often invoked and vehemently argued, the term is traditionally associated with human-centric care and personal interaction. This may not accurately reflect the operational realities and guest expectations prevalent in the sector today – primarily due to pivotal moments in the industry’s growth, significant investments, the age of the internet, mobile communications, and now AI. 

Instead, a focus on measurable 'levels of service' – increasingly delivered through technology – surely offers a better framework for understanding the modern STR guest experience. 

Contrasting definitions: hospitality vs. service

Established definitions of hospitality, such as Marriott's focus on creating 'welcoming and friendly environments and experiences' through personalised stays, inherently rely on human interaction. This contrasts with platform-driven approaches, like Booking.com's mission 'to make it easier for everyone to experience the world', which emphasises accessibility and efficiency, often facilitated by technology.

In the context of STRs, where guest-staff interaction is often minimal (typically limited to booking, access, and issue resolution, rather than the continuous service points found in hotels), the traditional hotel definition feels less applicable. 

Barring significant issues requiring human intervention, the guest journey relies heavily on the quality of the accommodation and the efficiency of automated processes. Data supports a shift in guest preferences towards technology solutions. A 2020 Oracle study, 'A Data-Driven Look at Hospitality’s Recovery', found that 71% of consumers indicated a higher likelihood of staying in hotels that offer self-service technology. 

Furthermore, 73% of hoteliers surveyed anticipated that self-service technology would become increasingly integral to their operations. This trend is even more pronounced in the STR sector, where geographically dispersed inventory makes staffing for traditional hospitality functions economically and logistically challenging.

The ascendancy of automation and technology

Both guest preference and operational efficiency drive the move towards automation. Self-service check-in via digital locks or apps eliminates queues and streamlines the arrival process, offering a smoother experience than traditional reception desks. A recent experience definitely supported this at a well-known London boutique hotel. Premier Inn next time!

This shift mirrors broader industrial trends, such as the evolution of customer service centres. The initial wave of offshoring in the early 2000s, driven by cost savings, later saw partial repatriation due to quality concerns but is very active in the vacation rental space. Today, the STR industry leverages a global workforce of Virtual Assistants (VAs), highly specialised in OTA platforms, property management systems, and other sector-specific technologies, offering scalable, cost-effective support. Why have call centres and VAs become so popular? 

It's simply staff, admin, facility management, and cost control in a pressured, low-margin business. Companies such as Extent Team are thriving because of the increasingly complex and demanding systems and guests.

The impact of AI and changing labour dynamics

AI represents the next frontier in service automation. Its potential for cost savings and efficiency gains is making it a significant competitive factor.

As highlighted in the World Economic Forum's 'Future of Jobs Report 2025', the interplay between humans, machines, and algorithms is reshaping job roles, with automation expected to handle an increasing share of tasks previously performed by humans. 

This necessitates a shift in the workforce towards AI-complementary skills, focusing on managing, implementing, and overseeing technology rather than performing routine tasks. 

While AI can simulate empathetic communication effectively in many scenarios – handling inquiries, providing information, and managing routine communication – the debate continues regarding its ability to replicate genuine human connection, particularly in resolving complex or emotionally charged issues. 

The prevailing strategy often advocates for a hybrid model where AI handles routine tasks, freeing human staff for higher-value, complex interactions. However, the success of platforms like Amazon, which provides high levels of service efficiency with minimal human interaction (primarily limited to logistics), challenges the assumption that human touch is always paramount for customer satisfaction.

Service delivery mechanisms in STRs

Modern STR operations increasingly rely on an integrated technology stack:

• Access: For example, digital locks are supplanting traditional lockboxes and ID systems to verify guests with the automation of data sent to the authorities.

• Information: Digital guidebooks and apps replace physical binders.

• Communication: Automated messaging platforms, often augmented by AI, handle guest inquiries, provide pre-arrival information, address minor issues, and solicit and monitor reviews. Tailored communication flows can be designed for different property types and guest segments.

• Reporting and management: The ability to deliver accurate, yet flexible, reports on finances, staff, contractors, and owners' assets is a significant advance using AI, and it also supports maintenance, cleaning, service deployment, and monitoring at all levels.

  
  

The success of this model hinges on seamless integration across all technology touch points and alignment with guest communication preferences. When executed effectively, it delivers a high level of service – the product (accommodation, access, amenities, and information) is delivered efficiently. However, the quality of the accommodation itself remains a separate, critical factor.

Service challenges and tech opportunities

A significant challenge arises from 'channel confusion', particularly when guests book through OTAs like Airbnb and Booking.com. Guests may mistakenly perceive the OTA as the direct provider, leading to communication breakdowns across multiple platforms (OTA app, email, and direct messaging) if technology integration and messaging protocols are not adequately managed. In such instances, the service level deteriorates, often necessitating human intervention. Direct booking channels (round of applause, please) can mitigate this confusion by centralising communication and clarifying the host-guest relationship.

The future job landscape in the STR sector

The trend towards automation certainly impacts employment within the industry. The WEF report identifies several declining job sectors, including roles traditionally involved in STR administration and guest relations. 

Conversely, there is a growing demand for individuals skilled in technology implementation and management, including building and orchestrating tech stacks, ensuring data flow, and managing integrations. There is also a need for expertise related to the green economy and sustainability, areas that are highly relevant to hyperlocal STR operations. Owner acquisition, onboarding, and owner management are still human tasks, but they also require proven data and expertise. However, this is not guest hospitality, but service to the primary customer – the owner.

Financial acumen, including accounting, reporting, and payments, remains crucial. Technology serves as the foundation, but human oversight provides governance over repetitive tasks. Even this can be replaced by third-party AI checks and measures.

While administrative and routine communication roles may diminish, the need for skilled tradespeople, such as those in maintenance, cleaning, and repairs, remains critical. This is confirmed by reports like the EURES analysis of labour shortages in Europe, which consistently highlights the demand for hands-on professions that are not yet replaceable by automation. This also explains some of the increasing costs of running an STR business and individual properties. Electricians, plumbers and the like are in short supply!

It’s not hospitality, it's service strategy

In conclusion, while the term 'hospitality' carries connotations of personal care, the operational reality of the mainstream STR market aligns more closely with delivering defined 'levels of service', which may be interpreted as 'hospitality'. In STRs a lot of that secondary experience is out of your control, hence use technology to guide guests and add to that level of service.

Service is increasingly facilitated, automated, and scaled through technology and AI. High levels of communication, responsiveness, and efficiency – achievable primarily through automation – are paramount. This trend will continue, and yes, humans can get involved of course, but time is money!

While AI can emulate empathetic communication, the core guest experience hinges on the quality of the accommodation and the seamlessness of the technologically driven service processes. Major brands that leverage the STR model, like Marriott's Homes & Villas or Booking.com, ultimately rely on their property manager partners to maintain these high service standards, reinforcing brand value through consistent, efficient, and increasingly automated guest experiences. Their service levels can affect the Marriott’s 'hospitality' approach.

The focus shifts from inherent 'hospitality' to demonstrable service quality, efficiency, and reliability. STRs are a service industry and are supported by the fact that most managers represent an owner as an agency and provide a transaction and management service.

Admittedly, on-site owners may align more with the 'hospitality' message, but this might decline as technology replaces humans!

Richard Vaughton from Yes Consulting is a Host Planet Columnist.

Richard founded rental technology business Rentivo, which was recently acquired by Situ. He also recently exited two property management companies with close to 1,000 rentals. Richard currently works as an advisor for a host of businesses in the short-term rentals world, helping them focus on expansion, mergers and acquisitions, and technology efficiencies. 

Now based in the UK, Richard has worked in the Middle East, Italy, and Switzerland during his career, encompassing several industries. He was previously the CEO of a Finnish biotech, service, and diagnostic supply company. 

Contact Richard via email: richard@yes.consulting.