Despite the
heated protests that erupted across some of Europe’s most popular destinations
this past summer, the tourism sector’s reputation remains salvageable.
Redemption, however, will come not solely from within the sector itself but
through the synergy of two very different industries: institutional real estate
and technology.

Consider the main grievance of protesters in tourist hotspots —
soaring living costs, especially housing affordability. While the short-term
rental (STR) market has long been scapegoated as the sole cause of rising
rents, the problem is, of course, more nuanced. The real underlying issue is
the enduring shortage of housing.

Institutionalize to destigmatize

This is where institutional real estate operators have an
opportunity to make a meaningful difference. New, high-density and
professionally managed build-to-rent and multifamily developments are among the
most efficient accommodation types for dealing with housing crises that have
plagued swathes of Europe for decades. And the sector is primed for rapid
growth. According to CBRE, a structural shift in investors’ portfolios is
already underway, one that will drive the share of allocation to the living
sector to around 30% over the next 12 to 18 months, up from 20% today.

What’s key here is that there are almost always vacant units in
these buildings — units that can be activated for short-term rentals. In doing
so, operators can create professionally-managed STR inventory without depleting
local housing stock, thereby taking the sting out of the argument that a
thriving STR market inevitably eats into family homes. These are, after all,
apartments that would otherwise have sat empty.

Triumph with technology

But transitioning from long-term rentals to incorporating
short-term stays is no small feat. It requires a fundamental shift in
operations, one that only technology can facilitate. For apartment operators
who are serious about deploying STR strategies, they must first take a long
hard look at what’s different about running a hospitality operation and what’s
missing from their existing tech stacks that would fill these gaps. 

The first hurdle operators will hit is the difference in lease
structures. Existing tech designed to handle longer leases is unlikely to be
able to negotiate high volumes of shorter stays. The solution in practice means
either adopting property management systems (PMS) purpose-built to manage a
mix of long, short and medium-term leases, or bolting on STR-specific
technologies to existing systems. The latter, of course, poses questions and
possible challenges around the integration of systems and data.

Cleanliness is next to credibility

The quick turnover between guests demands efficient cleaning and
maintenance procedures, something apartment operators won’t be used to. Unlike
long-term rentals, where maintenance is scheduled well in advance, STR units
must be cleaned and prepared swiftly after each stay. Integrating task
automation tools with existing maintenance platforms enables operators to
schedule cleanings based on check-in and check-out times, prioritize jobs and
maintenance automatically, and ensure all-round hospitality-grade standards.

Operators also need to be mindful that long-term residents aren’t
inconvenienced or disturbed by short-term guests. By placing all short-term
rental units on a single floor of an apartment building, not only is
housekeeping much more efficient, but it’s easier to maintain a sense of
community among permanent residents by minimizing the appearance of unfamiliar
faces on their floors. Noise complaints are also much less likely. 

Frequent guest turnover also means that access control in STRs
must offer greater flexibility. Installing smart lock systems in designated STR
units allows for remote, keyless entry. Unique access codes can be generated
for each stay, ensuring guests can enter their units seamlessly while
maintaining robust security protocols. It also minimizes disruptions for
permanent residents by keeping access systems separate and secure.

Be seen, communicate well and think like a hotelier

Another important step is adopting a channel manager to
synchronize STR listings across all major booking platforms. This ensures
real-time occupancy updates, prevents double bookings and optimizes
availability. A channel manager effectively bridges the gap between the steady
leasing schedules of long-term rentals and the dynamic, on-demand nature of
STRs, allowing operators to maximize occupancy and revenue without losing focus
on long-term tenants.

In STR, communication is mission-critical. Guests expect instant
responses and seamless interactions from booking through to check-out. While
long-term tenants may rely on a resident portal for communication, STR guests
require more immediate engagement. Integrating an AI-powered guest
communication platform allows for automated messaging, digital guidebooks, and
responsive chat features. This provides a hotel-like experience that enhances
guest satisfaction without overwhelming staff or disrupting service quality for
long-term residents.

Handling the financial aspects of STRs is also markedly different
from long-term rentals. Instead of fixed monthly rent collections, STRs involve
frequent, varied payments. Integrating payment gateways that support immediate
processing, accept multiple payment methods, and manage deposits or
pre-authorizations is essential. This flexibility not only meets guest
expectations but also ensures smooth financial operations capable of handling
higher transaction volumes.

Elevating perceptions

As more multifamily and institutional operators enter the market —
and they are, according to our research — their involvement
will inevitably drive the sector’s professionalization as a natural byproduct.
Remember, these are big firms that have a lot of money riding on their
corporate reputations. Most will also subscribe to strong environmental, social and governance (ESG) commitments that
mandate responsible and sustainable business practices.

With technology as a key enabler, institutional
real estate is not only poised to restore the STR sector’s reputation, but also
to combat the rise of anti-tourism. The positive impacts of tourism will be
impossible to ignore, and over time, anti-tourism protests will give way to a
renewed appreciation for the benefits that it can bring.