Harnessing AI in 2025 without losing hospitality’s personal touch

Artificial intelligence (AI) had been transforming the way we live and work long before the release of ChatGPT in late 2022—most of us just weren’t aware of it. That seminal event thrust AI into the foreground, and the ensuing fervor generated a wave of interest that continues to drive adoption of AI-powered solutions in almost every industry, including vacation rentals.

Today, vacation rental property managers (PMs) and hosts are using AI mainly to streamline tasks related to guest communications and revenue management. However, the potential for this technology to improve the way hosts conduct business goes far beyond these simple applications. The trick will be prioritizing the problems AI can solve for them, and striking a balance between automation and the all-important human touch.

Here’s a look at how PMs and hosts are harnessing the power of AI now, a glimpse into future capabilities the technology will offer, and considerations for STR operators as they wade deeper into the AI pool.

A quick primer on AI

Traditional AI, the secret ingredient in everything from digital assistants to route planning apps, involves training a computer to understand how all the pieces in a body of information relate to one another. Armed with data and context, these tools can analyze information and provide clear, accurate and relevant answers to questions based on what they’ve learned. Generative AI (GenAI) applications like ChatGPT take this capability a step further, with the ability to create new content using the information they’ve been trained on. While traditional AI can tell you how to get from Point A to Point B, GenAI can make up a whole new map.

Although GenAI is more advanced than traditional AI, they’re actually complementary technologies, with each one suited to a different set of use cases.

AI’s current role in vacation rentals

While GenAI has grabbed all the headlines over the past couple of years, traditional AI still powers the majority of the AI-driven solutions vacation rental PMs and hosts use today. Dynamic pricing tools, for instance, are trained on information like historical demand, weather conditions and competitor rates to suggest the optimal pricing for a given date. Traditional AI is also central to systems that provide guests with personalized recommendations based on their preferences. However, in areas like guest communications, where natural language is key, more PMs and hosts are beginning to tap into the power of generative AI.

Not so long ago, short-term rental (STR) operators faced the challenge of providing continuous, round-the-clock responses to guest calls and messages. Now, the vast majority of those queries can be handled online, within seconds, by AI tools trained on property features and policies, area amenities, and local events and attractions. The next step—and the one where GenAI will play a lead role—is enhancing vacation rental chatbots and messaging systems to handle more complicated requests, using natural language.

This is also, however, where STR operators need to ask themselves where they want to set the limit in how much technology they put between themselves and their guests.

Balancing technology and the personal touch

As technology continues to infiltrate the business/customer relationship in almost every industry, the “human touch” is quickly becoming a point of competitive differentiation. That’s especially true in sectors like hospitality, where human interaction has traditionally been central to the guest experience. So, how do STR operators maximize the potential benefits of AI without allowing it to drive a wedge between them and their customers?

Some regulators are also questioning how much automation is too much. In Italy, for instance, a recent ban on self-check-ins for STRs reflects concerns about the loss of personal interaction between hosts and guests. While supporters claim the regulation preserves the hospitality experience, critics argue this move could hinder innovation in the sector and add financial strain on small operators who rely on automation tools, like self-check-in, to make their businesses feasible in a highly competitive market. This debate highlights an important consideration for hosts: balancing the advantages of automation with the need for personal connections, especially as they navigate regulations that shape how technology can be integrated into guest interactions.

When it comes to online communication, AI can already outperform humans in many ways. It can respond immediately, 24/7, and never has a bad day that might cause it to be a bit snippy. However, both operators and the tools they employ need to acknowledge the limitations of automated guest communications. A good chatbot will always know when it’s no longer capable of helping a customer, and graciously hand them off to a real person.

Fear of losing that personal connection is a good reason to be hesitant about adopting AI. But hosts who shun AI completely—for that or any other reason—risk missing out on many other benefits, including increased efficiency, decreased risk, and reduced costs and waste. PMs and STR operators just need to be deliberate and strategic about how they deploy AI. A good place to start is by identifying the number one problem AI can solve and deploying a solution to address that problem. Then, just rinse and repeat.

The future of AI in vacation rentals

Properly maintaining vacation rental properties is just as important as taking good care of the guests who stay in them, and many STR AI tools of the future will focus on doing just that. For example, Internet of Things (IoT) devices like sensors and smart meters will increasingly be used to alert operators to plumbing, electrical, and mechanical issues before they can become big problems.

These devices will be one element in an array of solutions supporting predictive analytics and proactive forecasting to let PMs and hosts know when something might go wrong. Someday soon, they’ll even be capable of dealing with a problem without the need for human intervention. Leak detection systems, for instance, will be empowered to automatically switch off the water supply and may even send a request to a plumber to investigate the problem.

Long a key player happy to do its part in the background, AI is now in the spotlight and propelling innovation in every aspect of business, including in the vacation rental industry. AI-powered solutions are already helping PMs and vacation rental hosts save money, enhance the guest experience and operate more efficiently. In the near future, this technology may eliminate the need for human involvement in some tasks altogether.

Yet, technology will hardly be able to fully replace humans in hospitality—stakeholders must pinpoint and heed the line where tech can do more harm than good. When deployed strategically and thoughtfully, AI-powered solutions can transform not just individual vacation rental businesses, but the entire industry.

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