Times are changing and they’re changing fast. When I joined the STR industry in 2012, the hosts relied on a marketplace model. They would make their own tech stack of applications and tools they wanted to use. And, since the industry was quite young, it was easy to enter the competition for STR tech companies. Fast forward to 2024, not even mentioning the Covid times that almost annihilated the industry, I’m observing a shift in host demands and behaviors.
STR hosts are facing tough times as the market cools down. They’re looking to cut costs, especially when it comes to technology. This is putting pressure on tech companies like Superhog that serve the STR industry.
How do we prove our value to hosts? Should it involve offering more integrated solutions, lower pricing, or specialized features that address specific pain points?
Goodbye marketplace model
The marketplace model is becoming less and less productive. Hosts grow more demanding and impatient not without a reason.
Firstly, many software solutions are just too slow for hosts who need immediate access to the most up-to-date information.
Secondly, hosts want to scale their portfolios but a successful upscaling is only possible when all their apps communicate between themselves.
Thirdly, eventually, hosts stop using solutions that don’t bring unique value or features into their daily lives.
And, no, they’re not expecting every software solution to grow into all-in-one solutions with all imaginable features and functions. They still want to be flexible about their tech stack but this time, they want a single entry point.
Race for sticky STR solutions
So how are SaaS businesses responding to this challenge? They take a more curated approach. By integrating the most valuable products directly through APIs, providers offer hosts a streamlined and cost-effective solution.
This approach not only allows providers to charge hosts directly for the services rendered (or offer them for free), thereby increasing basket size, but also enhances the stickiness of their software.
As a SaaS provider, it’s crucial to remember the primary goal: serving customers effectively.
Meeting hosts where they are and offering value and customization is essential; otherwise, they will likely turn to alternative solutions.
Every penny spent on technology is a penny out of a host’s revenue, so we must move beyond the old marketplace, which no longer satisfies the needs of financially stretched hosts. By focusing on delivering tangible value and tailored solutions, we can ensure our offerings remain indispensable to our customers.
But first, do you build or buy? Here are my two cents
The age-old debate, for me it’s about using a ‘walk, crawl, run’ approach. It allows new products to be tested quickly and then developed more broadly later. If the provider is offering something you have no desire to build, or would be expensive to set up and therefore won’t allow for quick testing, then you have your answer. This, I think, explains why SaaS businesses choosing to buy API products, is becoming so commonplace.
At Truvi, we’ve seen a tremendous amount of interest in our API solutions over the past 12 months. Our solutions are designed to be provided directly and in a way that allows partners to tailor them to their software, ensuring the product performs the exact function they require. Our most popular products include Screen&Protect, Truvi Flex, and Check-in Hero. These tools not only ensure that the guest booking experience remains seamless but also bring numerous other significant benefits.
Why integrate with other businesses via APIs?
Although it may sound like a love letter to API solutions, it’s not. I’m going to share with you what I’ve learned about the benefits of integrating with STR solutions via APIs.
Real-time data capture and dynamic pricing
APIs can provide real-time access to availability, pricing, and inventory data. This ensures that SaaS providers can offer the most current information to their customers, reducing the risk of over-bookings and errors. For instance, Truvi’s Screen&Protect provides real-time information about the authenticity of the guest’s data, meaning guests using false information can be rejected, and pricing can be adjusted instantly based on demand and availability.
Better host or supplier and guest experience
APIs enable a more seamless and integrated user experience by allowing SaaS providers to embed services directly into their platforms. You can present products to hosts (or guests) as a one-click purchase or feature-add, increasing their satisfaction with the product.
For example, Truvi’s range of trust and protection tools helps OTAs build deeper relationships with their hosts and guests, making them feel more secure about their bookings. This integration holds broadly; whether it’s offering fridge fills, taxi services, or other add-ons, enabling these options increases satisfaction for both host and guest.
Super quick testing & learning
APIs enable SaaS providers to quickly integrate new technologies and services from partners, fostering innovation and keeping the business competitive in the market.
Products can be tested and iterated quickly through this model, gauging guest appetite and host uptake. With Truvi Flex, for example, different flexible booking rates can be tested, or different damage protection levels offered with Screen&Protect. The ability to do this through the same API makes real-time testing a reality, which is truly game-changing and hugely cost-effective.
APIs can be great revenue generators
Implementing API products can be highly lucrative for SaaS businesses. APIs enable seamless and real-time access to a wide range of services for which commission can be added, such as Truvi Flex or Screen&Protect. Additionally, the enhancement to the providers offering which API services can bring will attract more users and increase booking volumes. APIs also help negotiate better rates and exclusive deals, further boosting profit margins. Overall, the flexibility, efficiency, and expanded capabilities provided by API integrations significantly contribute to the revenue growth of OTAs.
There’s no going back
Integrating API products into a SaaS business not only enhances the overall customer experience but also drives operational efficiency and revenue growth. By adopting APIs, businesses can stay competitive, innovative, and responsive to market demands, ultimately leading to a more successful and sustainable business model. We’re in challenging times, but there are opportunities to grow if you meet your customers where they are, you can win the race!
About Leo Walton
Leo Walton is a seasoned veteran in the short-term rental industry. With over a decade of experience, he has been instrumental in shaping the sector. Leo began his journey at Onefinestay, where he played a key role in building the company’s supply acquisition team. Subsequently, Leo led this function across Europe. In 2019, he co-founded Superhog, a leading technology company that empowers hosts to manage their properties with confidence.
