The 5 Forces Shaping the Short-Term Rental Industry in 2027 and Beyond

Welcome to the STR data lab. I'm Jamie Lane, chief economist at DNA and today we have a special episode of the STR data lab. Uh this is our 200th episode and for our 200th episode we have a live recording of my presentation from Verma International. uh where I gonna start with the state of the union, where short-term rentals are today in the US, what's happening on supply, demand, uh and then we're going to go into the five forces that are going to be impacting the short-term rental industry over the next few years. I really think you guys are going to find this episode really insightful uh and really interested in your feedback. uh shoot me a note uh if you sort of agree if you disagree with how these five forces are actually going to impact uh your business in the future. All right, so my name is Jamie Lane. I'm the chief economist at AirDNA. We're going to talk today for about 45 minutes on the state of the industry and then go through five forces that I think will define our industry over the next couple years.

Uh these are all forces that I think many of you are familiar with. They're not necessarily directly related to the short-term rental industry, but many of them are adjacent. Uh so we're going to go through the economy. Uh we're going to go through the OTAAS. Uh which here happy about some of the changes the OTAAS have done lately? Who's here not happy about some of the changes the OTAAS have done lately? Yeah. And that's not going to change. Uh so we're going to talk why that is and some of the issues they're dealing with. We're going to talk through what I call the sorting uh which if you went to my panel today on what would you do for a 4.9 review, we're going to talk through some of the impact uh that the reviews and how they're sorting out businesses in the industry. We're going to talk about the housing market which is in still in deep recession right now and that's absolutely impacting industry performance.

And then we're going to end with AI because I think it's going to entirely transform our industry and maybe not the ways you're thinking about it for your own business. So all that in 45 minutes and because Steve and Bill are in the front, I'm going to try to speak slowly and simply for them. Uh [laughter] all right, let's get into it. So where do we stand? This is my favorite slide to t look at for the entire industry. It's the first one I look at on a monthly basis when we get the new numbers. And I got September numbers yesterday. So, I updated the slides specifically for today. And it is the year-over-year change in available listings in the US. And I've had so many people come up to me at our booth and they're like, it feels like supply is slow. Like, is the industry not growing?

The answer is absolutely. And we are at 1.6% supply growth. You go back to 2022, the industry was growing at north of 20%. So 1.6% feels really slow. And so at AirDNA, we break out the 317 different markets uh in the US. Uh and and when you look at that breakdown, only 145 are growing more than uh 2%. So that's less than half. And there's 60% 60 markets that are falling in supply. Who feels like supply is falling in their market? If you want to check it, come by the booth, but we can show you. A lot of markets, a lot of the biggest markets in the country are actually seeing supply falling. Uh, and that totally changes the dynamic. Like we're a growth industry. Like it's like and things are growing 5 to 10% like I only have to get a little bit of that share and my business is doing great. We're in this one and a half percent growth sort of environment like a lot of growth is happening from Bill stealing from Steve to grow their supply and that is a tough environment because you've got to be really outperforming your competition.

You got to be paying attention to what you're doing. You've got homeowners that are questioning what you're doing if you're not growing revenue. Like this is one of the most challenging growth environments that we've been in a long time because we don't have supply as that major tailwind for the industry. And this isn't just a US story. Europe is grow essentially flat and there's no growth in Europe right now. Uh but there is growth South America, Asia, Africa, there's supply growth of north and 10% for the industry. So if you want to go somewhere that's growing, maybe go down and start adding supply down in South America. Uh demand is still growing though. Like this is also the biggest worry. If we get an environment where supply is flat uh and demand's flat, then we're fighting for demand with hotels, we're fighting for demand with each other.

Like fortunately, even with all the challenges of the economy, and I'm going to get into the challenges of the economy, overall demand has been growing this summer. 2% uh earlier this year 1 and a half% so overall I'm feeling decent about overall demand growth uh and a big piece of that is that we have finally found a floor on occupancy so this is another one that has really defined the industry over the past uh 10 years and as an industry we're running about 55% uh that's going to vary dramatically by markets in terms of levels but I think probably Most people in the room have felt this roller coaster that we've been on of occupancy skyrocketing in 2021 uh and then steadily coming down throughout 2023 into 2024. But we have as an industry been relatively flat plateauing at this level at about 57% uh since uh late 2024.

And that has really changed the environment for rate growth because rates were falling when we were seeing these massive declines in occupancy. We were all competing for demand and that meant that a lot of people were cutting rates uh to get that demand uh and it was really a competitive environment. Uh but the fact that we found this floor that supply has been growing roughly in line with demand has allowed pricing power to come back. And when we look across the different location types uh and this is 2026 data and supply has been running roughly with demand across all the different market types. So this is a really healthy environment in terms of supply and demand balance because when these get out of balance that's when we start seeing and supply our occupancy increasing occupancy decreasing. So this is a relative healthy environment across the bang or across the um country. But you do see areas where occupancy is declining.

It is the coastal mountain markets. So there are some challenging markets out there for overall occupancy. Uh suburban areas of the US uh small city rural uh relatively flat. Uh and this is sort of the balance of power across the markets. Uh percent of markets that are growing, percent of markets that are decreasing. And all to say just because I say broadly in the US things are good and there's still 8% of markets where Revpar is falling so far in 2026. There are 8% of markets last year where Revpar is falling. So there are park pockets of weakness. There are markets where things are essentially flat though broadly we do see Revpar growing throughout uh 2026. And now I have had the privilege of showing this slide now for four consecutive years that the larger the home the better performance. And this is something that I just see and I I hear on headlines I read and skipped all the time that hotels and short-term rentals are converging.

I like I don't believe that at all. I think hotels and short-term rentals are diverging faster than ever before. And the urban operators have all gone out of business. S Alfred, uh, Domio, uh, Wanderj, like this whole vision that short-term rentals were going to beat hotels on their own turf. I mean, have you stayed in a hotel and you stayed in a short-term rental in a in a market like for these big conferences? Hotels beat it. And nine times out of 10, should we be staying in hotels for a conference like that? That's a whole another debate. But I largely hotels are doing really well especially in the urban core and some of the uh suburban areas of the market and where short-term rentals were vacation rentals have really differentiated attracting groups uh really amenitizing uh uh leaning into generational travel.

Uh that's where they've been doing really good and that's where demand has been accelerating. And this chart has held true four consecutive years. So this isn't a small trend. This is a large and consistent trend and it's not just in the US, it's been playing out globally. So, here's my industry outlook uh heading into 2027. Uh we do expect and slight increases in occupancy. So, I'm going to get into why, but I do expect the supply environment that we're in today is going to continue. So anyone hoping for a big resurgence in supply growth uh and it's going to be on the last slide but supply is not going to come and save you. Uh I do see the health in occu or in ADR growth continuing. Um not as strong next year and I think a lot of that has to do with inflation coming down a bit next year.

Uh but overall revpar growth is going to be growing though just not at the rate of overall inflation. uh but demand strong supply uh uh continue to be uh weak. So this narrative that we're in right now for the industry performance I think is largely uh going to be stable. So now let's get into the five forces. Uh the first one is the economy and who likes to read the Wall Street Journal every day? No one. Okay. So, there's some economic variables that you need to pay attention to and others that you can just largely ignore. So, I've been track tracking hotels, short-term rentals, sort of roughly travel demand for the past 15 years. And the two variables that have made the most impact on the capacity of

Americans and and sort of uh people worldwide to travel is do you have a job and are you making more money? Because if you have jobs and income, that is going to drive people to travel. Travel's a luxury good and people as they earn more income, they continue to want to travel. And over the past decade, we've seen massive increases in travel or in income. Uh and a lot of that, I think, is one of the reasons why short-term rentals and just broader travel has grown so much over the past few years. Job gains have been limited. So that means the wealth accumulation has been massive. Uh and that we've seen more and more people looking to spend their disposable income on travel and that's and one of my big trends over the next decade especially with AI. We're going to talk about that but something to keep an eye on. Uh there is some worry though that that is going to continue into next year. And that's where I've got a big question mark on uh demand growth for next year is when you look at wages and you look at inflation.

Inflation now is and just over that of wage growth. Uh and so there is some some worry that if people do if their wages do not keep up with overall inflation that you're going to see real income start to decline. And when real incomes start to decline, uh, you start to see people start defaulting on their mortgages, on their car loans. So that's something we keep an eye on. Um, and right now we're being saved by people essentially stop saving. And so, and what do you do if incomes aren't growing as much as expenses? And you don't and you want to keep spending, you don't save as much. So retail sales have stayed strong and and that has been at the expense of people saving for a rainy day. Uh we do see delinquency starting to tr tick up especially credit cards especially auto loans. So that is a little bit of worry but none of them are in like red light warning zone yet and but that is where on the delinquency rate that you'll start to see the cracks forming uh in the economy.

And then and we just got a whole bunch of new economic revised data on Friday and overall most things were revised up. Uh so AI is pushing the overall economy. Data center uh construction is essentially the reason why GDP is positive. Uh overall unemployment at 4.2%. That's very healthy. Uh the one worry there you see on the right uh is CPI inflation. Uh inflation is running hot. It is accelerating. Most of that driven by energy and the war in the Middle East. Uh but when you break out the goods uh and the things that we use as short-term rental uh and vacation rental managers, there's not a single thing on there that is positive. Like wages for service workers are growing significantly greater than those the wages of white collar workers. um um cleaning supplies, uh all sorts of things are running way hotter uh than we're getting in overall rate growth.

And then and if there's one thing to keep an eye on outside of incomes, uh it's what's happening to gas prices because this has so many downstream effects to our businesses. Not only for consumers, it acts as a tax on wages more than anything else. As most people, you got to drive to work every day no matter what. It doesn't matter what gas prices are. And then for all of our businesses, like we don't work in a hotel where we can and clean all these rooms by pushing a cart around the uh hallway. We got to drive to all these properties. Gas is a significant expense. Uh and that has uh is very elevated right now because of the war in Iran. But one of the great things with this war is gas prices will come down when the straight of Hormuz opens back back up. We see that uh we see it in the data. We know it'll happen. We just need to see a conclusion of this war.

More bad news. I promise I'm going to get to good news. Uh is what's happening in terms of foreign guests and American travelers going overseas. This these lines are diverging. They're diverging in the wrong way. We have more Americans going to Europe than ever before. That's growing at a year-over-year rate of anywhere from 5 to 10%. And we are not seeing any pullback on Americans going to Europe. uh with these larger incomes, they want to go to Nice, they want to go to Rome, they want to go to all these new destinations. What we're also seeing is Europeans don't want to come to us. Uh so we have seen a significant decline. French visitors down 13% and Canadian visitors, not Europe, but our friendly neighbors to the north down 17%. And that continues to go down. Uh so this is a big strain on the northern border market. So if you're in the aderondex, if you're in Seattle, if you're in Michigan, and you are seeing significant declines from Canadian travelers coming to the US, and that is and uh has been uh continuing.

Uh so we track that on a year-over-year basis. Are more international travelers coming in? Um so what is the breakdown in demand between international and domestic travelers? We did see a blip up during the World Cup, more international travelers coming in, but that immediately went back down in August. And there is some weirdness with the data with Labor Day, but overall if you average August and September together, international was down another 4% and domestic was up 3%. So we are sort of we have domestic travel saving us fortunately for most of our industry. And if you're in a vacation rental market, you're probably only getting 5% of your demand from international guests. That's not a big worry. But if you're an urban operator, if you're in Aahu, if you're in Florida, Orlando, like a significant portion of inbound is coming from international guests. And this is a headwind uh for growth.

So I mentioned I'd talk about OTAAS. So when I say OTAAS, online travel agencies, it's Airbnb, it's Verbbo, it's Booking.com. Uh so we do track all the major OTAAS in terms of what the distribution looks like, where are all of you distributing your properties, how many of those are cross-listed on multiple platforms. So there's roughly 11 million uh short-term rental, vacation rentals around the world uh that we're tracking on a daily basis. Uh and then this is some fun new research we came up with using uh reviews and share reviews that um and people use. We estimate overall booking share of the major OTAAS by continent. So overall we're seeing about 45% of industry bookings and this is not just professional managers. This is individual hosts as well coming from Airbnb. Uh about I think that's 8% coming from Verbbo, 14% from booking and about 37% direct and through other sources. The trend this year is up for Airbnb, it's up for Verbbo, it's up for booking, and it's another year of downward trend for direct.

So, anyone saying that the direct movement is working and that we're seeing more and more direct bookings than ever before, the data does not play that out. The OTAAS are spending more than ever before and they are a lot of the ways why and demand continues to expand for our industry. So on one way and they're partners that we need. They spend a lot of dollars on marketing uh Airbnb's ads, Verbos's ads on getting people to explore and use vacation rentals for the first time. The types of trips that they work better for verse hotels like that is incremental new demand for our industry that would have never otherwise come. And that is a boom for us. That is one of the reasons why we have been taking share back from hotels year after year after year. But and they do have a lot of power in our industry controlling what is that 7 63% of overall bookings.

Uh and we do see I their ability to uh leverage that uh power. More of us are listing on multiple platforms. So those that dependency on any one child channel has been dissipating. That's a good thing. We've been talking about that year after year. Be on multiple channels. D-risk yourself to any changes to one channel and that has been changing and changing uh pretty significantly year after year. But one of the big unknowns for the OTAAS and this could be I the big unlock for direct uh and what I've shown here is stock market prices for Meta verse uh Airbnb booking Expedia uh trip uh Uber Door Dash uh and Instacart and what we see here and you can and see the September 8th right here. What happened?

Anyone know?

Muse launched.

Muse launched. Anyone using Muse? Handful of people. Well, Muse launching caused the biggest drop in Airbnb booking and Expedia stock in like years. I It was dramatic of going from an index of 100 to at the low point uh for Airbnb was down 17%. All because Wall Street now believing that Muse was going to disintermediate Airbnb was going to disintermediate travel that everyone was going to start using Muse to book their travel. And why would that impact Airbnb booking Expedia? It's you're not using them. And that all else held equal, if Muse is picking the best spot for someone to travel or to book that they might be going direct and they might be dis intermediating the OTAAS. And who would love Muse to and cause a whole bunch of bookings to start coming direct? And I think most of us would uh we're going to talk about AI.

Uh but this is this is a trend to watch because there are all these travel agents or agentic travel tools, booking tools that are launching. Uh instinct is another big one uh that I heard all the major OTAAS sort of talking and worried about. Uh but at the skiff conference, anyone go to the skiff global forum um in New York, it was like two weeks ago. Well, Brian Chesy got on and he talked and he announced that Airbnb was launching their own Airbnb or uh AI agent booking agent travel tool in 2027. And what what happened that was that last bar here. All of a sudden, their stock started going back up. So, like Brian single-handedly turned the tide of Airbnb stock by saying that they're going to start finding their own agent for booking. So, this is something that Wall Street's paying attention to.

It's something that they're very worried about for the OTAAS and it's something that all of you should be keenly focused on because if you're not discoverable through the OT or through uh the LLM and that agents can't find you like your ability to drive these direct bookings from these travel agents, these new agents is going to be limited. All right, number three, the sorting. This is a fun one. Uh, this slide I've put out year after year after year and essentially shows the larger you are, the worse reviews you get. Like this is a tired story. I hear multiple and people always push back of, "Yeah, it's hard to get a 49 when you're at 250 units." Well, here's the averages. Here's the spread. The spread gets bigger the larger you go down. So, there are 100 plus uh property managers generating a 4.9 and above. like there's great examples of that. Uh there's many of those in this room uh that were highlighted in our best property managers award.

Uh but it's and this trend is not uh reversed and it's and really hasn't changed much and 90% of reviews in the US are five stars that has been increasing but a lot of that has been aggregating to the individual hosts. So why does that matter? And we've done a lot of econometric work sort of analyzing the data. Uh and essentially quality pays like if you're and some of these and not so much superhost versus non-suphost like half the host now are super hosts. That's only going to give you about a 5% boost. Uh guest favorite versus non- guest favorite only going to give you about a 3% boost. these new badges, top 1%, top 5%, top 10%. So, if you're a not a guest favorite versus getting up to the top uh 1%, that's going to be a what 22% increase in overall revar by getting to one of those top tier badges. So, they do have meaningful impact in overall revar. And then just and a 4.9 and plus versus an average property manager rating.

So average property manager more than 100 listings generating about a 47 a 47 to a 4.9 and above that's 14% increase in revpar that's meaningful uh and what we see is a lot of those property managers that are able to achieve it and have a lot of downstream benefits not only revenue uh but also and overall supply growth they're able to add more owners and we do see that even with the high review scores for the individual hosts and this investment environment is really impacting them. We don't see a lot of subri growth for the one to five unit hosts that represent about 60% of listings. Where we see the growth happening is that 21 to 99 unit property manager. Those are the ones that are still able to get the 48 and a half 49 and above. Uh they're very local.

They're usually in one market and they're killing it right now. And then churn. Who's tracking your turn on a monthly basis? Who's tracking their turn on an annual basis? So, this is, I think, one of the most impactful slides of you look at the difference between the churn for property managers for those that are 49 and above and those that are 47 below, 2x the level of churn. And this is where and you go back to 2020 20 and 2019 there was almost no difference. Like this is what is the difference between 20% supply growth when everyone's adding listings when owners are generally happy and when we get to this much more competitive environment where homeowners are looking what their friends are doing seeing the returns that they're getting and if they're not in a highly rated property if they're not getting the increased revs that comes with 49s and above they're going to go to someone that is uh and they're turning out at a rate that's I relatively high 26% % churn annually is pretty bad.

Number four, the housing market. So, this hopefully won't come to a surprise to anyone, but we are still in a housing recession. Anyone a realtor here? Anyone feeling the weakness in that overall housing market? Yes, we are at 4 million homes sold this year. Uh that is essentially and you go back to the depths of post great financial crisis like that is the lowest point it got like the only people that are buying homes you get married you get divorced you have a kid uh like uh you get a new job like that is it and there's almost no new investment activity and we see what investment activity adds to home sales like when we were seeing the boom postcoid and what is that over six million homes sold now down to four million that 2% increase or 2 million homes like that is a lot and that is a lot of what's drives supply growth in our industry and unfortunately um a lot of that is driven by fixed mortgage rates 30-year fix now above 7% a lot of that driven by inflation the Fed is raising rates and I think they will continue to raise rates uh overall inflation continues to run h the overall economy is healthy or at least it seems to be right And so they've got to compl combat inflation.

They're going to continue raising rates. And that means and as far out as I'm forecasting, I don't see us getting below 6% mortgage rates again. And that is going to continue to weigh in on the housing market and investment activity. Uh home values have fortunately stayed up. So we take our six location types and look at home values here. Uh so there continue to be strong. Uh uh median days to contract by location type has expanded. So, there are deals to be found. If you're an investor looking for new short-term rentals, there are deals to be found. They're harder to find. You got to have home sit. You got to be looking to negotiate with sellers, but there are deals to be had. Um, and this is where the markets you're looking after. Uh, so we do see markets where home values are going up. We do see a lot of markets where home values are going down. Uh and when we and look sort of peak to trough the peaks that we saw in 2020 uh2 now to today and these are some of the biggest vacation rental markets in the country and Gatlinburgg uh Sarasota Cape Coral uh Panama City Austin uh these are all markets where if you're looking to get into them there are attractive price points uh today especially when there's a motivated sale seller.

And then my final force uh is AI. Uh so I love this um saying or and is when travel booms when households have jobs rising income and time to use both. So I want to take you guys on a brief history of our industry. So going back to the 1760s, the industrial revolution, travel essentially did not exist and you had the aristocrats, the royalty that could go and travel. But the average worker, the average American, the average European did not travel. They did not take vacations. They worked on the farm. Uh uh and then we really saw a shift that started uh from farms to factories and that shift uh led to higher incomes and that's why people went to the factories because you could make way more money uh in these factories. Uh and then it wasn't until uh the n late 1920s Henry Ford made a famous decision and famous analysis. I was like, "My workers are making all this money, but they have no reason to buy my cars because they don't have time to use them.

What if I gave them a weekend off?" And what happened is they had the weekend off, they wanted to use that time to travel. So now they had the income to travel, they had the uh time to travel, and they decided, you know what, let's travel. Uh and we saw the whole emergence of the US hotel industry. So roadside hotels started uh Best Western, Holiday Inn, uh they then became and sort of compounded into Hilton and Marriott of these large hotel chains and Marriott's first one was a roadside hotel in the middle of nowhere. Uh and now we've got the vacation rentals uh industry that sort of popped up out of that. Uh so this entire industry was a sub or a result of productivity gains. More people, more incomes uh and more time to travel. And you look at the census does time studies of how people spend their time throughout their day throughout the year. And one of the major drivers of the past decade, something that's driven and changed more than anything else is when people have more leisure time, they want to spend that time traveling.

And I think that's going to be one of the and major shifts that comes with AI. As you think about what does AI do right now, it increases all of our productivity. We haven't seen it really play out in the economy yet. And there's sort of two camps with economists and procrastinate pro procrast procrastinators. Uh there's this bull and bear case and you may have heard them in the news of I'm gonna start with the bear case that I all these productivity games go to the large uh research labs that it's it's going to be Elon, it's going to be Anthropic, it's going to be Sam Alman that we're just going yes we're going to be using all these tools uh but they're going to cost a lot of money uh and we're going to have to pay them more and more and that's going to have a negative um consequ quences on our margins and then I'm going to have to start laying people off and then they're going to earn less money and then uh they're going to have less to spend and we get in this negative cycle that and sort of causes a collapse in the economy uh and that the profits are gaining for these large companies versus wages gaining.

So if all these property productivity gains just acrew to six companies and to six trillionaires like that is not a good thing for the overall economy. And then there's this other side where the gain spread throughout the economy that we sort of see what we've seen in past productivity cycles uh that the there's structural changes that come from these in income effects. Uh richer households what do they spend their money on? Services. And there's so many studies that out there that find when uh people and sort of in more uh they want more premium goods, they want handmade goods uh and that um and they don't want automation. So like and Starbucks is this great example of where they tried to make their business more efficient.

Uh they got rid of writing their your name on their cup. Uh, and then and they wanted to get you in and out as quickly as possible. And they found their sales started to go down. And why was that? Because Starbucks is selling a premium experience for coffee. If you want to get in and out, you can go to Dunkin Donuts. You can go to your gas station. People wanted this premium experience in Starbucks. So, their new leadership sort of changed it back like, let's make our coffee slower. Let's not automate it. And they got their customer back. So this whole notion that and we're going to auto automate our way into higher productivity in our businesses like people are willing to pay a premium for handmade handcrafted personalized services. So, one of my big and challenges to us all today is as we think about how AI is going to automate our businesses that we're going to use AI guest communication that we're going to use AI revenue management like just be careful that we're not automating the things that people are willing to pay a premium for because as we move into this next decade of greater and greater productivity, greater and greater incomes, we have this amazing opportunity to capture what the premium consumer is willing uh to pay for.

Uh and Alex Immus, this great economist, uh I love this quote, as the rich get richer, they want more from other humans, not less. And that I think that's what separates our industry from so many others and why we could really boon coming out of this uh next phase of growth. Uh and we did run models on what different scenarios of AI could mean for our industry. Uh so Moody's economics came up with these great AI scenarios. Uh productivity boon essentially outlines that scenario that I just talked about where we all get more efficient. We all get greater incomes. All this income accumulates to everyone in this room and we all travel more. I mean that is 30% more demand and short-term rentals by 2030. That is great for everyone here. Uh but even just this AI empowered scenario that we just all get a little bit more efficient, every business gets a little bit more profitable uh and the income sort of trickle down like that is a very plausible that's the scenario that I sort of um and in 20% gain in overall demand and then there's these other two scenarios AI falls flat.

So that's all this investment I mentioned how GDP growth is being driven driven by all this AI investment the data center investment that's happening. So if this all turns out to be for not that we all start cancing our open AI subscriptions or anthropic uh subscriptions that all this investment sort of goes away and we do go into recession next year that is I and that that will happen uh I I see there's only a 25% chance of that. I suspect it's even lower uh but that would us move us into this slow growth scenario and then this job market of heel one where essentially uh the income acrru to the top uh research labs uh that is going to be a slow growth scenario over the next couple years and then as that power acrru uh we start seeing and the rich will get richer uh the uh they will spend on ultra premium but ultimately income start declining for the average worker and we see less people traveling uh by 2030.

So that's the job market, that's the traveler. Uh the other thing to keep an eye on is if instinct, if muse become the next best thing, it become the thing that people use for booking their travel. How does that change our business? How does that change how we need to show up? And it's fun to think about like I mean how many of your guests just like always book through Airbnb? They're always going to continue to book through Airbnb. Like no matter how much discount you give them to book direct, they're just not going to do it. That's just how they book. They like it. They're used to it. Uh these habitual booking moes and they could potentially go away. Like if an agent has the view of every price for all your listings and the price for every listing uh across all the different channels, like it's just going to find the channel that's the cheapest.

It's going to find the one that you have the best points for. It's going to sort of break down these moes and book in the most efficient way. Um loyalty and neutra were will be real. Um an agent will optimize across all those programs. uh OTAA take rate becomes and just the cost of doing business and those I think those margins will get pressured uh and that's why I think one of the reasons why you saw the stocks come down so much and search engine discovery will be a major uh driver going forward. So there's already companies like Kismmet that are trying to make all of our rentals more searchable across the LLMs. I'd really be keeping an eye on them and and how they're doing what they do to make sure and your properties show up.

Uh and then what survives or gains and you got to have agent read readable property data and API first direct booking. Uh we have to make it easy for the agents to make it happen. That's one of the reasons why I'm still relatively bullish on the OTAAS. Like they've got whole teams that are focused on these things on the right. Like they are going to make sure that Open AI can read every single one of their listings, that they can see all the amenities, that can they can see all the availability, that they can make sure the right availability for the right listing for that trip is going to show up first. And and clearly that's who they're going to onboard first. They have partners with all these companies.

like we have to be able and to make sure that we're an option when it's not the consumer looking that it's when it's an agent looking and then bringing all these five forces into a nice 2 by 2 box. Uh and what that box shows you is essentially on the uh vertical axis what you can control versus what you have little control over. Uh and then on the horizontal, what reaches us this year verse reaches us over the future years. And as business owners and we've got to think about and there's things in our control that we got to decide how we're going to react like we can react to and which OTAAS we list our properties on. We can react to and using new AI dynamic pricing tools. We can use new AI optimization tools for your listings. we can empower our employees to be using these tools to become more efficient. Um there's things to sort of decide over the full and years ahead like it can take time to move from a 46 to a 47 to a 48 to a 49 but that's the decision you have to proactively make and make the changes in your business so that over the next few years uh you can make those moves on the housing side like you can choose the markets you're operating with.

You can choose the type of owners that you want. You can choose the type of listings that you want as part of your portfolio. Like that is directly under your control. It's going to take time to make changes, but that is something that occurs. And then there's things out of our control. So economic volatility, no one in this room can reopen the straight of Hormuz. But you better believe it's going to impact your business over the next year. So we've got to and it's upon us to keep an eye on these things, understanding directly how they impact our business and planning for it. So yes, we need a budget for higher gas costs in our business. Yes, we need to be concerned about consumer spending uh if incomes continue to get squeezed. Uh but and that's and that's as a leader something that for you to keep an eye on and and work into your budgeting. And then on the traveler side AI, this is again out of our control, but something that we can plan around and at least have scenarios around.

So if you're in the camp like me that believe this is going to be a make a fundamental difference in overall travel over the next decade, like I'm going to back the truck up into my business uh and invest heavily so that I can be a company that's going to capture that demand in the future. If you think and there's a 10% chance that we're all dead and that uh we're and and no one's going to have a job in three years, then maybe it's time to sell your company. Uh maybe it's time to uh uh take those wins that you have now and and get out why the good uh good is uh getting good. So those are all within um are some within our control, some without, but all things important for us to be thinking about um as we plan for the years ahead.

So, and I I won't read these through with you, uh, but I'll just leave you with and all of these and there's some things that are within your control and some things that are outside your control. Uh, and like housing, it is going to create opportunities in some markets. If uh housing prices are declining, that creates new homeowner opportunities. that creates a market that may be seeing surging supply and because now there's opportunities to add new investment into that market. Um uh the sorting is a really interesting one too. That data will continue to evolve. Uh but you better believe that we're going to be here again ne hopefully next year uh and um report on how it's all playing out. So that's all I got for you. Uh I usually have a QR code. I forgot to put it in. Uh I have my email address here if you want a copy of the deck. I'm happy to send it to you. You're happy to share it around with your business.

There's nothing proprietary in it. Uh and if you want to learn more about our data, if you want to learn more about AirDNA, uh come to booth 1000. We're happy to chat with you. So, I've got two minutes. If anyone has a hard question, I'd love to hear it.