Hostaway Secures $365 Million to Expand AI-Driven Short-Term Rental Management Platform

Hostaway Secures $365 Million to Expand Short-Term Rental Platform | PYMNTS.com

Hostaway has secured a $365 million strategic growth investment to expand its vacation rental software and management system designed for short-term rental property owners and managers. The company will use the new funding to support its international expansion, product development and artificial intelligence (AI) initiatives, Hostaway said in a Tuesday (Dec. 17) press release. "This transaction is a critical milestone that will enable Hostaway to expand our commitment to delivering continued product innovation and invest further in AI-driven tools as we support our customers in growing and managing their businesses," Hostaway CEO and Co-founder Marcus Räder said in the release. "Also, we are excited to leverage this investment to further expand our footprint across the world, especially in key markets like France, Spain and Italy." Hostaway's platform currently supports customers with properties in more than 90 countries and offers an integrated marketplace that provides access to vacation rental software and tools from more than 200 partners, according to the release. The platform provides a property management system and two-way API connection to major online travel agencies, the release said. It also includes tools for analytics and reporting, communication, marketing and operations. The platform's current AI tools provide suggested message responses, SEO-optimized listing descriptions, and other ways to enhance listings and guest communications, per the release. Recent additions to Hostaway's offerings include Hostaway Dynamic Pricing, Hostaway Capital, Hostaway Insurance and Hostaway Smart Locks, according to the release. Raph Osnoss, managing director at General Atlantic, which led the strategic growth investment, said in the release that Hostaway has demonstrated "high velocity of innovation and dedication to supporting its customers." "Hostaway has emerged as a category leader with a differentiated product addressing the distinct needs of short-term rental property managers, a dynamic and growing industry," Osnoss said. This announcement came about 18 months after Hostaway raised $175 million, saying it planned to use the new funding to accelerate its expansion and continue developing its services. Another company offering a property management software platform for the short-term rental and hospitality market, Guesty, raised $130 million in a Series F funding round in April. Guesty said at the time that the growth in demand for short-term rentals had been outpacing that for hotels since 2022. Vacation rental booking platform Airbnb said in October that it launched a service called Co-Host Network that lets property owners find help with things like setting up listings, managing bookings and communicating with guests directly from the Airbnb app.

Hostaway secures $365M to cash in on short-term rental boom

Short-term rental platforms like Airbnb have transformed travel. They've made it easier for tourists to access personalised, private accommodations and for property owners to monetise their spaces. With global tourism now on track for a full recovery post-COVID, Hostaway has secured a cool $365mn at a $925mn valuation as it looks to cash-in on the boom in short-term rentals. Hostaway is a property management system (PMS) and software marketplace for the short-term rental industry. It will use the cash to enhance its dynamic pricing tools, further integrate AI, and expand its presence in new markets, focusing on France, Italy, and Spain. "Expanding into different geographies and investing in innovative AI applications is something we've been hyper-focused on for over a year now," said co-founder and CEO Marcus Räder in a blog post. "With this new strategic investment, we'll be doubling down on these efforts and much more." The company said it was the first PMS to integrate ChatGPT into its platform. Going forward, it plans to add or improve upon AI-powered personalised messaging, content creation, and language translation. Räder co-founded Hostaway in Finland in 2015, alongside Mikko Nurminen (CFO) and Saber Kordestanchi (COO), at a time when companies like Airbnb were really starting to disrupt a travel industry dominated by hotel chains and guest lodges. The founders saw that while short-term rental platforms were easy for customers to use, managing stuff like bookings, pricing, and communication was a bit of a headache for property owners. They launched Hostaway to help property managers automate and manage short-term stays across multiple platforms like Airbnb, Booking.com, and Vrbo. The idea is that by automating tasks and putting the data on a single platform, Hostaway can save property managers time on admin, freeing them up to focus on customer service -- critical in a review-based industry. The platform also recently adopted dynamic pricing tools to optimise rates, potentially increasing revenue. "Hostaway has emerged as a category leader with a differentiated product addressing the distinct needs of short-term rental property managers, a dynamic and growing industry," said Raph Osnoss, managing director at General Atlantic, a New York-based growth equity firm that led the funding round. Hostaway also raised $170mn last year in its first big funding round. The company claims its platform is used by customers in over 90 countries. While Hostaway is officially based in Toronto, Canada, it employs a fully remote workforce of over 230 employees across 44 countries. Hostaway is one of a cohort of tech startups raising big money to make things easier for the hospitality industry. One of them is UK-based Lighthouse, which raised $370mn in November to expand its data intelligence platform for hotels. Another is Amsterdam-based Mews which raised $110mn in March at a valuation of over $1.2bn, becoming the first Dutch unicorn of the year. Then in September, it bagged another $100mn, to further develop and expand its PMS software.