Updated on April 21, 2023
Like other short-term rental property management companies, Austin-based Locale has tried its share of software applications and automations to improve the effectiveness and efficiency of its operations. One key area of improvement they focused on was STR guest fraud.
Testing these tools often takes time, but in one noteworthy case, the cost-and-time-saving benefits of a new software application became clear in less than a week and stopped a fraud ring that was targeting Locale.
In November 2021, Locale onboarded Autohost, a guest screening and background check software that integrates into existing workflows of STR property management and hotel companies.
“We decided to try Autohost mostly just for synchronicity and automation,” said Joe Mangioni, senior technology manager at Locale. “Obviously, a manual workflow really bogs down our operations capacity, and obviously, human error is a big deal. So, that was kind of the driving force behind that.”
Autohost blocks fraudulent STR Guest bookings
A week before going live with Autohost, Locale experienced an expensive chargeback for nearly $2,000 from a fraudulent booking at one of its Houston units. In addition, the Locale team had to evict the guest for room damages and nonpayment.
Emboldened by getting away with the first bogus booking, the fraudsters decided to target Locale again at another one of their Houston units.
They made several attempts to book the room with sketchy credit cards. But this time, Autohost flagged each attempt and rejected their bookings.
“The reason we were able to link them together is once we had the data from Autohost showing the locations and all the information around these individuals, it mapped almost directly to that prior booking,” Mangioni said.
Had the fraudulent bookings gone through, Locale would have lost over $3,000, he said.
“I felt pretty vindicated,” he said “Anytime we onboard software, there is always a short period of time where we’re feeling it out, making sure that it is effective and worth the money, and this is one of the few instances where we onboarded something and almost immediately saw a return.
“In that specific instance where we caught consecutive fraudulent bookings, the savings of lost revenue right there equaled probably three, four months of software costs, so it paid for itself immediately.”
How Autohost works
Prior to Autohost, Locale used a fully manual workflow to screen its guests at over 100 units spread across eight properties in Austin, Houston, and Nashville. The team would collect information from the guest and then manually process that data through a background check software.
Autohost automates and optimizes the process, freeing up the Locale team to do other things.
When guests book a property with Locale, they receive a booking confirmation email and an email from Autohost explaining that they need to go through a virtual verification process. They click that link and continue the verification process in the Autohost portal, which is fully branded with Locale’s colors and logo.
The guest provides basic information such as their name, email address, and phone number. Autohost confirms that the guest read through Locale’s house rules and has accepted the guest agreement. Then, the guest provides their ID and credit card.
Autohost then processes that information and assesses that booking with a risk score of green, yellow, or red. Red risk scores are immediately rejected. Green and yellow risk scores go onto a background check.
Autohost also uses Stripe to validate the credit cards and ensure that the guest’s ID, credit card, and the information inputted all match up.
“They’ll flag a reservation if the guest is booking a room in Houston, but they’re currently in South America, but their phone numbers are registered in Africa, things like that,” Mangioni said. “They’re really just looking for irregularities across the two sets of information.”
Reducing fraud boosts STR revenue
Since Locale started using Autohost in November, the company has rejected a total of 90 bookings – a huge increase over what the Locale team had been able to flag previously, he said.
“We’ve also seen a trend where really young individuals will try to book with us using their parents’ information. We only allow bookings if you’re 21 and over,” he said “Autohost will actually flag people under 21, so we got ahead of that pretty quickly.”
Autohost’s clients see an average of a 15% increase in rental revenue after using the screening software thanks to the ability to remove booking restrictions, increase occupancy, and reduce unnecessary costs resulting from bad reservations, according to the company’s website.
In addition to weeding out bad bookings, Autohost has brought operational efficiencies to Locale. A hidden benefit is that Autohost prompts guests to input their email addresses and phone numbers.
“That’s nice because we do a lot of third-party channel bookings through Airbnb, Expedia, stuff like that, and sometimes we don’t get the guests’ information through those channels,” Mangioni said. “By requiring them to input the information through Autohost, we can make sure we contact them with our communications.”
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This case study was powered by Autohost
Know Your Guest. Autohost is a guest-screening and automation platform for fast-growing hospitality companies.
