AI Insights: Generative AI to enhance vacation rental software Lodgify


We want to help you keep up with how brands across the travel industry are exploring – and using – generative artificial intelligence solutions from companies including OpenAI, Google and more. So we’re surveying technology professionals at leading travel brands, and we’ll be publishing their answers periodically here. 

Lodgify co-founder and CEO Dennis Klett shared with PhocusWire how the vacation rental software company is implementing generative AI.

We began working with generative AI in … the beginning of 2023, shortly after the release of ChatGPT. While we knew that large language models (LLMs) and the underlying infrastructure of AI already existed for some time, we didn’t think it was ready for mass adoption in the vacation rental industry prior to 2023.

Then came ChatGPT, which from one day to the other made LLMs accessible to everybody. The disruptive moment of ChatGPT was not the technology itself, but the application of it. ChatGPT made AI highly intuitive and accepted by consumers at scale. That triggered us to work on embedding LLMs throughout our software to help our customers save time in managing their vacation rental business.

The first and most significant opportunity we recognized was with guest-host communications, which is a crucial part of the booking process and overall guest experience but can often be time-consuming and repetitive for the host.

Our current work with generative AI is focused on … the launch and continued development of our first AI feature, Lodgify’s AI Assistant, a GPT-powered messaging tool integrated within the host’s unified inbox that allows you to generate a response to a guest with a click of a button. When tapped, it analyzes the latest message sent from a guest, then quickly drafts a contextually relevant response using information from the host’s Lodgify database and various online sources — including details about the property, reservation, policies, nearby attractions and recommendations and more — so hosts can address guest needs more efficiently while saving significant time. The host still maintains full control and can review or edit the AI-generated response before sending if needed.

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We’re currently working on extending our AI Assistant’s capabilities even further. An upcoming iteration includes offering immediate translation of the AI-generated responses, so hosts can respond in the traveler’s native language or other languages as needed.

The biggest challenge for us related to generative AI is … getting people to discover it and give it a shot. When ChatGPT launched, we assumed that everyone would use it, but it doesn’t yet seem to be a mainstream feature, at least in the vacation rental industry.

We just rolled out our AI Assistant earlier this month, so only a small portion of our customers have started utilizing it. However, the customers who do discover the tool become heavy users of it based on the interaction we’re seeing so far. What’s interesting is that minimal edits are being applied to the AI-generated responses, which means that they’re already pretty spot on. It’s our first version of the product, but it’s already proving to be extremely useful.

As we continue collecting more data and feedback, our goal is to make it even smarter and reduce the need for human intervention, so hosts can communicate even more efficiently while building their guest relationships with the support of AI.

For the travel industry overall, we see the most potential for generative AI to … disrupt distribution — the critical phases of search, discovery and booking travel arrangements. Imagine a virtual travel assistant that gets to know you really well and develops a deep understanding of your preferences when it comes to flights and accommodations, then optimizes your logistics accordingly (ideal timing, layovers, locations, amenities and more). It will hopefully even be smart enough to secure the best price for your budget, which would make it a pretty compelling service. It’s not yet clear at this point which service will emerge as the leading virtual travel assistant.

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AI certainly has the potential of reshaping the overall distribution landscape, but this remains to be seen. It will be very interesting to see how this plays out over the next few years. We will carefully track its evolution and ensure that our customers can always market their rentals through our channel manager to the leading distribution channels.

One year from now we expect to be using generative AI for … automating workflows that extend beyond messaging. Given the technology’s rapid and exponential growth, it’s hard to predict exactly how we will use AI throughout our product one year from now. ChatGPT served as a prime example of how quickly things can evolve in this space, so we’re closely monitoring and experimenting with new AI use cases. We’re committed to our customers to ensure we will keep them on top of the latest innovations through our all-in-one software.

As a company, we see AI as being an integral part of the way we work and deeply rooted in our product.

PhocusWire’s AI Insights

Keep up with these quick updates from travel brands about generative AI such as ChatGPT and Google’s Bard.

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