Vacation rental revenue management firm, Beyond Pricing has acquired Smart Host – another travel technology startup, focused on introducing flexible pricing strategies to vacation rentals – for an undisclosed amount.
Beyond Pricing grants its users with free and open access to data of nearby properties through its new Nearby Listings feature and Health Score, allowing owners to see how their prices measure up to surrounding competitors in the vacation rental space.
The acquisition will see Beyond Pricing incorporate Smart Host’s technology and features into their own platform, to enable vacation rentals with better dynamic pricing capabilities.
“With that feature, we think we have the perfect toolset for revenue managers of all types – from single owners to managers of thousands of properties,” said Ian McHenry, CEO and co-founder, Beyond Pricing.
The acquisition will also allow Beyond Pricing to tap into Smart Host’s data to increase the accuracy of their recommendations by drawing from a much larger set of information.
It overcomes restraints of using internal pricing algorithms that are provided by but limited to single sites, like Airbnb. Beyond Pricing can instead collate data from across multiple vacation rental sites, to generate more accurate price recommendations.
On top of all that, the acquisition also gives Beyond Pricing the ability to offer Smart Host’s features as their own, not only letting them absorb its customer base but adding value to its existing users too.
What can be regarded as a simple case of one small fish swallowing a slightly smaller one, is in fact symbolic of a growing segment in accommodation.
“I started Beyond Pricing because, from my experience helping the largest airlines and hotels in the world with pricing, I saw that vacation rentals were where hotels were a decade ago,” said McHenry.
By equipping private property owners and managers with the technological tools to create a viable holiday rental business, startups like Beyond Pricing, GuestReady etc., could present a challenge to traditional hotels, which are already grappling with losing customers to the private accommodation space.
It gives hosts and private property managers the opportunity to leverage tools like big data, machine learning and predictive analytics, to optimise their revenue easily. Using these tools will let them manage and rent their properties in a far more sophisticated and professional way – running it more like a business than simply as an occasional host.
While hotels have benefited from pricing solutions and revenue management software for at least a couple of decades, McHenry argues that now, vacation rentals are rapidly catching up, as more startups are geared towards serving the space.
Vacation rentals are therefore on track to even leapfrog hotels when it comes to adopting new technologies to operate more seamlessly and automatically.
Unlike hoteliers, vacation rental owners are not inhibited by the typical constraints of bureaucracy, conservative upper management or legacy systems that might prevent them from adopting innovative tech solutions.
Vacation rental businesses and individual owners are then arguably in a better position to continually upgrade their features and offerings, as more technology becomes available to them.
“More vacation rentals have smart locks and keyless entry than hotels. Digital guestbooks and concierges are starting to be more prevalent in vacation homes, led by companies like Your Welcome and Hostfully… photos and marketing for vacation rental listings are often superior to what you see on hotel websites. I think you’ll see vacation rental technology and service offerings lead the way over the next several years.”
The acquisition also shows a shift towards creating an ecosystem of business tools specifically geared at catering to vacation rentals. This space is filling fast, according to McHenry, and he foresees consolidation in startups surrounding pricing, communication and management.
However, he believes “there is plenty of space for small operators to continue [in the operations space],” with regards to property management and concierge services.
And there is no shortage of demand – Beyond Pricing currently serves over 120,000 property listings in more than 1000 markets. But why stop there?
“Our next focus is simply expanding to bigger and bigger clients. We are also focusing a lot on China. Two years ago, we had a lot of success in Japan, which was a huge growth market. We’ve seen China start to explode as well, with Airbnb getting more aggressive and with Tujia expanding their distribution.”
Beyond Pricing has raised $1.5 million in VC funding since its founding in 2013. Last year, it also won the Phocuswright Award for Travel Innovation – the Startup Category and People’s Choice. Meanwhile, Smart Host is a Techstars alumni.
