Good morning,

Here’s what’s going on in the vacation rental world this week:

CozySuites just scooped up Roami out of bankruptcy for $6.3 million, Airbnb is catching heat for denying refunds to travelers caught in Middle East conflict zones, and if you're a Florida host, watch out - a Florida law firm just launched a new practice around suing Airbnb & Vrbo hosts for guest injury claims.

Plus, we break down if robots in vacation rentals actually make sense.

Lets dive in. 

NEWS

Headline Roundup

• CozySuites acquires Roami out of bankruptcy for $6.3 million (The Host Report)

• Airbnb's war policy leaves some Middle East travelers without refunds (National Today)

• Injury lawyers are now specializing in STR claims, and Florida hosts are the first targets (WBOC)

• European vacation rental brand Belvilla enters the US market by snapping up 10 former Sonder properties (Hotel Dive)

• Concert demand isn't seasonal, and most STR pricing tools miss it (The Host Report)

• Airbnb hires former Uber executive as their "chief problem solver" (Airbnb Newsroom)

• HomeToGo partners with KAYAK to expand vacation rental listings (Web Disclosure)

• Airbnb and San Francisco agree to settle $120 million tax claim (Bloomberg Law)

• Proper Insurance acquired by Specialty Program Group (The Host Report)

• Hospitable launches Tasks to manage cleaning operations and payments in one platform (Hospitality Tech)

• Breezeway lands strategic investment from Resurgens Technology Partners (PhocusWire)

The #1 Priority for 84% of people booking a place to stay is The Location!

INTERESTING INSIGHTS

Do Robots in Vacation Rentals Make Sense?

Last week, I saw an article saying that a company delivered its first batch of human looking robots to a Florida-based luxury vacation rental operator. The company called it the first U.S. deployment of robots in a vacation rental setting. It got me thinking…

1. Do guests actually want this?

2. And if they do, can the economics work? Could robots realistically replace labor for things like cleaning or maintenance?

Some hospitality robots already exist. Machines that fold towels or deliver room service have been generating buzz online lately. 

At the same time, AI use cases in vacation rentals are growing quickly. But an AI chatbot answering “what’s the wifi password?” is very different from a 4-foot human looking robot standing in the living room of a home you rented on Airbnb.

So I dug in. Here’s what I found.

Do Guests Actually Want Robots?

Right now, it still feels like a novelty. Something closer to The Jetsons 

A small group of guests would absolutely book a stay just because a robot is part of the experience. For them, the robot becomes part of the entertainment. But that audience is likely limited, and the novelty could fade quickly.

The longer-term question is comfort. Would most guests actually want a 4 foot robot moving around the home during their stay?

I did find one real-world case study:

Japan’s Henn-na Hotel opened in 2015 as the world’s first robot-staffed hotel, initially deploying 243 robots. By 2019, the hotel had “fired” more than half of the robots. Some of the failures were hilarious:

• A room assistant robot mistook a guest’s snoring for voice commands and repeatedly woke him up during the night. (picturing that made me laugh out loud)

• Front desk robots could not answer basic guest questions.

• Luggage-carrying robots struggled with the one task they were designed to perform.

• Human staff ended up working overtime repairing machines, increasing labor costs instead of reducing them.
  

Now, technology has improved significantly since 2015. But from what I read, the hotel managers viewed robot installation as "something of a publicity stunt to attract guests" and couldn't confirm robots were boosting profits.

What Do They Cost, and What Would ROI Look Like?

Costs

Here is the pricing structure I was able to find:

• Full-size human looking robot: $40k

• Smaller human looking robot: $25k

• Delivery robot: $15k

• Robot dog: $3,500

Payback

My first thought was: what if these robots could replace a cleaner or perform maintenance tasks?

After digging deeper, the reality is that none of these robots can replace a cleaner or meaningfully reduce operational costs for a vacation rental today. The human looking models can handle very narrow tasks like vacuuming flat floors or folding a pre-positioned towel. And even then, the process is slow.

So we’re still a few years out from a robot doing a full vacation rental turnover clean, at least.

Because of that, the ROI model for hosts is not “replace expensive labor” instead, it’s “charge more per night because the property has a robot.”

And that’s exactly how vendors are positioning it. The pitch is that hosts can create “robot-themed vacation rentals” that generate social media attention and pricing power.

The real question becomes whether the novelty can drive enough additional revenue to justify the cost.

A $25,000 to $40,000 human looking robot would likely struggle to achieve a positive ROI in the next few years. But the lower-cost “robot dog” is at least worth modeling:

The unknown variable is guest demand. There’s no market data showing whether travelers would pay a $20 to $30 nightly premium for a property with a robot dog, but you are pretty much guaranteed a bump in social media attention. So what could that do to Occupancy %? Its an interesting marketing experiment.

Personally, I’lll sit this one out. But when a robot can do a full turnover clean, it’ll get a lot more interesting.

MARKET INSIGHTS

Mortgage Rate Snapshot

Mortgage rates bounced around this week, pulled higher by a record oil price spike and lower by one of the weakest jobs reports in years. Monday briefly hit the highest level in a month before reversing, and by Tuesday rates settled roughly flat to slightly lower. War-related headlines are driving more day-to-day volatility than economic data right now.

Regulations Update

• Folly Beach's cap on short-term rental licenses was upheld by a South Carolina appeals court after a drawn-out legal battle

• Hawaii advanced HB 1590, letting counties use screenshots of rental listings as legal evidence and requiring platforms to register and remit lodging taxes

• Santa Barbara's Planning Commission voted 4-2 to advance an STR ordinance to City Council despite unresolved issues around parking, taxes, and neighborhood oversaturation

• Missouri lawmakers are racing to pass one of four bills that would keep STR properties classified at residential tax rates after a dozen counties reclassified them to commercial

See this weeks full regulations report here: (The Host Report)