Hotels and large property management companies (PMs) both operate in hospitality, but one is a proven, well-oiled machine, while the other stumbles and fumbles its way forward. Hotels—whether they’re a Ritz-Carlton or a humble Motel 6—rarely shock guests with unmet expectations. You know what you’re signing up for. Motel 6 might not leave the light on with the wattage of a Four Seasons chandelier, but it delivers exactly what it promises.
Contrast that with short-term rental (STR) PMs. They’re the wild west of hospitality. Forums are littered with complaints. Wall Street isn’t exactly putting them on pedestals, and their stock prices reflect that. Why? Because scale eats them alive.
Let’s dissect why delivering great hospitality at scale is so tough for STR PMs—and why hotels are so good at it.
1. Economies of Scale: Hotels Have It, STR PMs Don’t
Imagine running 100 hotel rooms in one building. They’re identical in layout, furniture, and function. A single cleaning crew can knock out multiple rooms in a day without needing Google Maps.
Now imagine managing 100 STR properties scattered across a city. A five-bedroom Victorian here, a two-bedroom condo there, and a studio with funky plumbing 10 miles away. Cleaning, restocking, and quality control become logistical nightmares.
This isn’t a new problem, but it’s one most STR PMs haven’t solved yet. There are solutions—dedicated regional teams, tech-enabled workflows, and tight operational controls—but implementing them takes serious money and know-how. For many PMs, it’s easier (and cheaper) to just skate by.
2. Service Models: The “Touch Factor” Difference
Hotels thrive on high-touch service. Guests expect check-ins at the front desk, housekeeping on demand, and a concierge who knows the city better than Google. The staff is visible, attentive, and trained to manage expectations.
STRs? Different ballgame. Guests book because they want privacy, autonomy, and the feeling of being “at home.” But this invisibility adds a layer of complexity. STR managers must deliver perfection without being seen.
Here’s the rub: at scale, invisibility gets harder to pull off. When the stakes are between (a) a mildly annoying guest experience or (b) blowing your budget on a hands-on solution, most PMs opt for the cheaper route. This decision is why some STRs feel more like abandoned houses than curated experiences.
3. Maturity and Professionalization
Hospitality isn’t rocket science, but it’s not a stroll in the park either. Hotels have decades—sometimes centuries—of experience. Their processes are dialed in. STRs, by comparison, are toddlers learning to walk.
The STR space is still figuring out its growing pains. It hasn’t reached the professionalization level of hotels because, frankly, it’s younger. Big STR PMs are where hotels were decades ago: cobbling together operations, firefighting issues, and dealing with a public still skeptical of the whole concept.
Give it time, and the industry might catch up. But for now, growing pains are very real.
4. Brand vs. Commodity Thinking
If there’s one thing hotels have nailed, it’s their brand identity. A Hilton is a Hilton is a Hilton—consistent, predictable, and aligned with its promise. Hotels sell a feeling, not just a room.
Most large STR PMs? They sell a commodity. They think in terms of “doors under management” and how cheaply they can keep those doors clean and operational. The result? Impersonal service, bargain-bin cleaners, and guest communication outsourced to call centers a world away.
Imagine staying at a luxury condo managed by an STR PM and calling to report an issue, only to hear: “Press 1 for English. Press 2 if you’d like to scream into the void.” Not great, right? And yet, that’s the experience many PMs deliver.
Here’s the truth: if STR PMs don’t start thinking of themselves as brands—like hotels do—they’ll never get out of the commodity trap.
What This Means for Investors and PMs
For Investors:
Look for boutique managers or large PMs that act like boutique managers. These are the ones who care about their brand and consistently deliver on their promise. You’ll know them when you see them—they sweat the details and treat your property like a mini Four Seasons, not just another line on their P&L sheet.
For Property Managers:
The future is coming, and it doesn’t look kindly on mediocrity. Start asking yourself the hard questions:
• What sets your brand apart?
• How do you deliver a consistently excellent guest experience?
• Can you implement a real guarantee that builds trust with owners and guests? (For example, at Island Stays Hawaii, we don’t get paid for any review below five stars. That’s how much we care about the guest experience.)
It’s time to stop thinking like a landlord and start thinking like a hotelier.
Closing Thoughts
Scaling hospitality isn’t easy, but it’s not impossible either. Hotels have proven it can be done. STR PMs are just late to the party—but that doesn’t mean they can’t learn the dance.
For investors, the lesson is simple: don’t settle. Seek out managers who think like hoteliers, not landlords.
For PMs, the writing’s on the wall: evolve or get left behind. Build your brand. Care deeply about the guest experience. Stop thinking in terms of units and start thinking in terms of experiences.
The STR space has the potential to rival hotels, but only if the players in it start playing the long game. Let’s hope they do—because the future of hospitality deserves better than call centers and cut corners.