The short-term housing rental market can be a divisive topic. On the one hand are the people who say companies like Airbnb and VRBO negatively impact neighborhoods due to loud or messy guests. On the other hand, there are advocates who say the short-term rental companies offer customers a much-needed, more reasonably priced alternative to hotels.
While it can be hard to get people to change their minds about a topic like this, there is one thing that is clear about short-term housing rental companies: they compile a large amount of data that is necessary for them to conduct business. Here’s a look at how data plays a role in the industry, and how that can translate to other industries as well.
Complex regulations
Companies like Airbnb and VRBO operate more like a vacation home than a hotel. They allow guests to stay in residences, usually for periods of less than 30 days. The residences could be anything from houses in residential areas to seaside summer homes to apartments in cities.
The details about what kind of short-term rentals are available from place to place can vary because the rules and regulations are so different. Some cities and states make it very difficult to operate a short-term rental, while others are accommodating. The laws include factors such as limiting how many units a person or company can own to rent out, or limiting the total number of properties in an area that can be rented. Some require permits, and some levy extra taxes. The way to track all of this is through data.
Data sharing
When the city of San Francisco attempted to pass a ballot initiative in 2015 that would limit short-term housing rentals, Airbnb worked to reach a compromise with the city. It had begun to pay taxes voluntarily, offsetting a concern the city had about the tax dollars they were missing out on by people not staying in hotels. Airbnb also offered to share internal data, like the number of guests visiting the city each month, to help the city government monitor the service’s impact on the community, as well as help them register hosts and track rental patterns.
While the regulations in each city and state are different, the reliance on data is similar. Whether it’s information about zoning, occupancy, or operation, the companies keep track of all kinds of different information that they use to work with local officials. Most importantly, they use the data to figure out what they owe in taxes.
Analytics for your industry
You don’t have to be a player in the short-term rental business to understand how important data can be for your business. Many other industries face similar federal and state regulations and need to turn their data into reports that can be the difference between operating everyday business and facing financial penalties or worse.
In the same way companies like Airbnb can use their data to inform their own business decisions, data can help your company improve its bottom line. The right analytics solution can help you make data-driven insights that can keep your organization ahead of the competition.
Most organizations have an endless amount of data. The challenge is figuring out how to use that data to help your company meet its goals. For companies in the short-term rental industry, some of those goals were externally motivated – they needed to use their data to appease government officials looking to regulate a newer industry. Your business has the opportunity to figure out what goals it wants to meet, and then zero in on the data that can help you achieve those goals. It is important to get buy-in from the people involved to make sure everyone knows what information is important in order to make the necessary decisions. But it is also important to have the right technology in place to turn the numbers into actionable information.
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