It’s an exciting time for the short-term rental industry. As the space grows and evolves, operators are getting smarter and more tech-savvy. But while the industry is upping its game, so are the people looking to exploit it.
With bad guests and criminal activity on the rise, short-term rental operators are exposed to more risks than ever before. As a professional operator, it’s important to assess and manage these risks to avoid disastrous situations.
One of the most common risks in the short-term rental industry is fraud. Luckily, there are telltale signs to watch out for. Follow the tips below to learn how to spot fraud and keep your business safe.
Know the common scams
As the demand for short-term rentals skyrockets, so does the risk of fraud. According to Forter’s Fifth Annual Fraud Index report, online travel agency fraud rates increased by 37% in 2018. To stay protected, the first thing you need to do is research the risks you face as a host.
In the short-term rental space, operators can see everything from bad guests and fraudulent bookings to criminal activity. To avoid falling victim, hosts need to know what scams are out there. Get educated about the fraud trends in the hospitality industry and learn how to combat them.
Understand your market
Uninformed operators are prime targets for fraudsters. To ensure you aren’t left in the dark, research the short-term rental market in your city. Make sure you’re aware of the latest security, tech and pricing trends to stay on top of the industry.
By having a firm grasp of the short-term rental market, you’ll be better positioned to deter foul play. Look into some of the tools available in the space. Whether it’s smart locks or in-suite noise sensors, decide which innovations are best suited for your operations.
A good pricing strategy can also help deter fraudsters. When setting your daily rates, it’s important to consider various external factors. Remember to think about seasonality and market demand. These can have a major influence on the type of guests booking your property. For instance, if you set your prices too low during the winter, you could be targeted for parties, fraud or criminal activity.
On the other hand, if you’re priced too high, you’ll get beat out by the competition. To increase occupancy, while protecting your business, you need to analyze the market.
Present your business as professional and security-focused. Not only will this reassure safety-conscious travellers, but it will show the troublemakers that you’re a force to be reckoned with.
Create listings with high-quality photos and inviting descriptions, free of spelling mistakes and grammatical errors. If you have a website, ensure it’s neat and user-friendly. Regardless of your booking platform, make sure it’s easy for guests to contact you should they have any questions or concerns surrounding their stay. Your company’s professionalism will intimidate the fraudsters.
Screen your guests
The only way to guarantee your business stays safe and secure is to screen your guests. Have a process in place to assess each reservation’s risk level by investigating the guest in a detailed, legal and non-discriminatory way. While it’s impossible to hide your listings from fraudsters, you can catch these tricksters before they confirm their booking.
As a property manager, it’s your responsibility to figure out who’s staying in your property. Analyze the details of the guest’s reservation to determine whether or not you should be hosting them. These details include their phone number, IP address, credit card and so on. Always make sure the guest’s credit card and ID match the name they used in their reservation.
Unfortunately, going through these details is incredibly time-consuming. As a solution, consider using a guest-screening software like Autohost to intercept any fraudulent activity.
Trust your gut
If a reservation seems too good to be true, it probably is. This is particularly true during the slow season. While a two-week long, mid-winter reservation worth $10,000 looks great on paper, you need to be realistic. Compare new reservations with benchmarks you’ve reached in the past. If you’re hitting margins you’ve never hit, something might be up.
Nonetheless, don’t immediately write off high reservations. After all, it could be legitimate. To guarantee it’s a good reservation, go through all the steps to verify the guest and their booking. If you’re really not sure, get on the phone with the guest. Have them reiterate the details of their reservation and look out for any discrepancies. In the end, trust your instincts and cancel if necessary.
Fraud-proof your business
In today’s digital world, more and more travellers are falling victim to smoke and mirror scams through home-sharing sites. These scams involve fraudsters creating fake rental listings or websites to get money from unaware victims.
To keep these incidents at bay, make sure your email and booking channel accounts are secure and protected with two-factor authentication. Otherwise, hackers might use your information to pose as a rental owner, collecting payments from unsuspecting travellers. Prevent people from copying your listing by watermarking your photos.
To get the right guests, you have to gain their trust. Display photos of the exterior and interior of your property and be clear about its general location. Finally, never ask a guest for payment outside of the booking channel. Not only does this put you at risk of losing the payment to a skilled fraudster, but it deters legitimate guests from booking.
In the short-term rental industry, your guests should be your number one priority. This doesn't mean you have to accept every guest to be successful, but you do have to invest in the guest experience. Focus your time and energy on 5-star stays and high-quality operations. That way, you’ll keep the guests you want and avoid the ones you don’t.
This post was written by Autohost, a guest-screening system for hospitality providers. The intelligent software verifies guests to protect properties, owners and communities in the short-term rental space.