There are two critical challenges facing the vacation rental industry - (1) lack of data standardization and (2) closed systems - that have collectively shaped the industry's landscape. If these challenges can be addressed holistically, it will help usher in a new era of innovation and enhance the experiences of both operators and travelers while reducing costs across the industry.

Lack of Data Standardization

Technology providers serve many different roles within the vacation rental industry, such as Property Management Systems (PMSs), Online Travel Agencies (OTAs) like Airbnb and, Channel Managers (CMs), Pricing Tools, and much more. Each provider has different ways of referencing and describing vacation rental properties and their attributes.

This lack of standardized language and data has led to non-standardized APIs and disagreements on fundamental data definitions all industry participants rely upon. Fragmentation hinders seamless communication and integration between platforms, leading to inefficiencies and misunderstandings between systems.

“Because APIs are not standardized, the complexity, learning curve, and expense of implementing and maintaining API-driven connections with software systems create a significant barrier to entry for emerging third-party technology companies.” - VRMIntel

Closed Systems

Each participant within the industry has their own siloed software that stores duplicative listings, reservations, pricing, and data relevant to their customers. This causes three significant issues - (1) connectivity overhead, complexity, and cost; (2) lack of interoperability across the industry; and (3) lack of innovation.

Connectivity Challenges

Each of these systems forms its own data silos, and to get access, they must build expensive, time-consuming integrations with each other. Initially, connectivity to specific providers, especially the large OTAs like Airbnb,, and Vrbo, used to be a competitive advantage.

However, as these platforms have risen in dominance, connectivity to each is now a minimum requirement and no longer a competitive advantage. Yet software providers must still spend a lot of their resources building and maintaining each connection as well as continuously adding new connections to new providers. This investment doesn't further their core business and is instead an ever-increasing business cost that everyone in the industry must bear, and that is ultimately passed down to end consumers.

Lack of Interoperability

Because access to these systems is closed and permissioned, there's a lack of data transference and interoperability across the industry. Data is spread across multiple companies with little portability or control, resulting in numerous costly inefficiencies for both operators and travelers. Worse, it inhibits trust across the industry because every time an end user moves to a different platform, they must start anew. A host must create new duplicative listings on every platform and rebuild their online reputation. A new guest has no verified travel history or reputation to share with a host, all of which diminishes trust and wastes time as all parties invest time managing and rebuilding reputation over and again.

Lack of Innovation

This degraded trust also impacts travel technology providers. Data silos and OTAs' walled gardens reinforce a competitive rather than collaborative mindset. The dominance of OTAs in distribution exerts significant control over the industry, resulting in high commissions, limited accessibility to their APIs, and reduced choices for both operators and travelers. This dominance stifles the influence of startups and innovators striving to enhance the vacation rental experience that could benefit the entire industry.

Last updated