COVID-19’s Chilling Effect on Summer Vacation Rentals

Travel coronavirus

The travel industry is being decimated by the coronavirus. The cascade effect of multi-state lockdowns has had a chilling effect on any number of verticals, from airlines, of course, to hotels.

Then add rental homes — where owners open their doors to vacationers — to the mix.

There’s an old line by F. Scott Fitzgerald: The rich are different from you and me. And in a scattering of cases, those with rather large wallets may be seeking temporary new digs beyond urban areas, to skirt crowds and microbes.

The New York Times reported last week that at least some New Yorkers may be fleeing the city for the Hamptons.  The New York Post reported that one socialite couple has listed their “party palace” for people fleeing COVID-19 in March and April for $50,000 a month.

But dig a little deeper, and those one-off headlines don’t begin to tell the real tale.

In an interview with Karen Webster, Joanne Logie, managing director and co-owner of New England Vacation Rentals, a site offering vacation home rentals in several towns on Cape Cod, laid out a reality that is far starker, showing ripple effects of the ongoing pandemic.

To put it bluntly: The families that were looking to get away from it all for a relaxing spring and summer break are looking to shift the plans made months ago — if not cancel them outright.

Beyond looking to cancel the most immediate trips, she said, “We’ve had people asking us to postpone their vacations that are coming up in April and May.”

That’s a 180-degree turn from just a few months ago, when, during January and February, Logie said her firm had seen its highest booking levels in over three years. Fast forward to mid-March, she said, and bookings activity simply, stopped.

As of right now, states have varied their approaches to battling COVID-19. Some states have placed strict limits on social gatherings and have mandated that non-essential businesses must close. And as Logie noted, in Massachusetts, amid the self-quarantining, as businesses shutter and restaurants embrace takeout and delivery, and shop shelves are bare, life on Cape Cod has become a “day by day, week by week situation.”

In a nod toward the rental vacation industry, and for firms like New England Vacation Rentals, said Logie: “We’re performance-based, we get paid based on reservations that are booked, and get commissions based on that. If there are no reservations, there is no performance income — and there is no income to run your company.”

She said that New England Vacation Rentals has been busy examining its cash flow, trying to stop cancellation requests (they are non-refundable reservations, and so for the customers, deferring those trips is a better option), and keep staff working.

“It’s been difficult for everyone,” Logie said.

The Bigger Picture

To get a sense of how deep the disruption has been, she told Webster that her husband runs an accounting, tax and financial consulting business for smaller firms such as restaurants and day care facilities.  She said that through the past several days he has been working through the wee hours of the morning, scrambling to help them secure loans. Getting a loan, of course, is a process, one that involves paperwork and a host of steps — and time.

Time, of course, is in short supply, especially when it comes to keeping the lights on and paying staff.

“A lot of these restaurants,” Logie told Webster, waiting for walk-in/take-out and delivery orders that don’t seem to be coming,  “are just plain closing.”  The ripple effects have, and will, extend to the businesses that rely on tourist traffic, such as package stores, apparel shops and other firms.

Small business loans are unlikely to fix the problem, said Logie, because loans must be paid back — and without revenues and cash flow in place, that’s an impossibility. There’s been a rising incidence of GoFund me pages, she said, where donations can be used to keep operations afloat and pay workers — and “free money” (especially from the government) may increasingly have to be an option to stave off economic calamity. In the meantime, charity and good deeds are on the rise — indicating a positive side-effect of the current crisis.

(Logie pointed PYMNTS and its readers to #savetourism and #Don’tCancelPostpone as worthy online, community-wide efforts to help tourism on a global stage.)

Looking Toward The Other Side

Looking at what might lie on the other side of all this, Logie speculated that companies of all sizes — and especially smaller ones — will become introspective about what it really takes to run a business. Many companies may consolidate offices and, increasingly, shift to a remote-working model.

Beyond the structural shifts, no matter the business vertical, demand is bound to return, Logie predicted. Once the tide is turned against COVID-19, she said, and an effective remedy is in place, people will feel safe in their jobs.

“Once people feel like they are going to get paid,” she told Webster, “I think you are going to see the biggest rebound ever.”


Humane, Whose AI Pin Flopped, to Sell Assets to HP

Humane AI pin

Humane, creator of the Ai Pin that received a wave of negative user reviews, is shutting down and selling its assets to HP for $116 million.

HP will get Humane’s artificial intelligence (AI)-powered platform called Cosmos, its technical staff and intellectual property with more than 300 patents and patent applications, Humane announced Tuesday (Feb. 18). The Humane team will form HP’s new innovation lab, HP IQ.

The HP acquisition marks a swift downfall for the AI wearable, which began shipping less than a year ago. It was aiming for sales of 100,000 units but fell far short at 10,000. Now, the startup is telling Ai Pin owners that their devices will stop working after Feb. 28, and all stored data will be deleted.

Humane was founded by Apple executives Imran Chaudhri and Bethany Bongiorno, who are married. The startup raised $230 million since its 2018 inception, according to Crunchbase. Its investors included Salesforce CEO Marc Benioff, OpenAI CEO Sam Altman, SoftBank and Microsoft.

Once named a Time magazine best invention of the year, the Ai Pin disappointed users who complained about malfunctions, its high price and overheating problems. Due to sluggish sales, the Ai Pin had to cut its price from $699 to $499. Users also had to pay $24 a month excluding taxes and fees for connectivity and cloud storage.

“The pin was more vanity than practical. There was really nothing more people could do with the Humane Ai Pin that they couldn’t otherwise do with their smartphones,” Kushank Aggarwal, founder of Digital Samaritan, told PYMNTS. “Plus, voice-only devices haven’t experienced mass adoption yet, so in that respect, it was destined to fail.”

Everything That’s Wrong With a Wearable

Once compared to the Star Trek communicator badge, the Ai Pin has a square shape and attaches to a shirt or coat using magnets. It uses AI to answer questions and perform tasks, such as making calls, sending messages or taking notes. A laser display projects text onto the user’s palm. Sensors detect hand gestures to control the device.

But early adopters complained that the pin would drag down the front of thinner shirts, that it would overheat, it didn’t work well, had slow response times, made frequent mistakes and its laser projector beaming text onto the hand was hard to read in bright light.

An Engadget reviewer said that “the combination of holding out my hand to see the projected screen, waving it around to navigate the interface and tapping my chest and waiting for an answer all just made me look really stupid.”

Reviewer Marques Brownlee said it was “the worst product I’ve ever reviewed … for now.” Wired magazine’s reviewer opined that “right now, there’s nothing here that makes me want to use it over my smartphone,” although he held out for the next version to be better.

Anant Sood, co-founder of Worxogo, told PYMNTS that “people develop strong habits around existing technologies. … The Humane Ai Pin required users to break smartphone habits across the board instead of breaking one small habit at a time. For new technology adoption, the perceived value had to significantly outweigh the effort to unlearn.”

Andrey Meshcheryakov, an engagement manager at Recombinators, said the company “struggled to identify a compelling use case and validate that its solution truly addresses it. If you’re creating a new category, make sure there’s a real demand or subpar consumer experience you’re [hoping to solve] — not just a futuristic concept people might find cool.”

Meshcheryakov pointed out that Humane, despite having “a dream team with Apple pedigrees,” missed “several blind spots: a deep understanding of customer needs, orchestrating an impactful go-to-market strategy, offering a reasonable business model, and ultimately acing the solution design — getting the combination of hardware, AI and user experience right.”

Moreover, Humane hyped its device before it was ready for prime time, Meshcheryakov told PYMNTS. “It’s better to debut a quietly excellent product than a loudly proclaimed flop,” he said. “Even a great product can falter with poor marketing, and a flawed product has no cushion at all. Additionally, the pricing model was a hard sell without proven value​.”

HP’s Plans for Humane’s AI Tech

For HP, the deal marks a significant step in its strategic transformation toward experience-driven computing and AI-powered devices.

“This investment will rapidly accelerate our ability to develop a new generation of devices that seamlessly orchestrate AI requests both locally and in the cloud,” Tuan Tran, president of technology and innovation at HP, said in a statement.

HP plans to integrate Humane’s AI capabilities across its entire product line, from AI-enabled PCs to smart printers and connected conference rooms.

As part of the acquisition, Humane’s engineers, architects and product innovators will join HP’s Technology and Innovation Organization, forming a new division called HP IQ. This AI innovation lab will focus on developing intelligent ecosystems across HP’s product range, specifically targeting workplace productivity solutions.

Humane co-founders Bongiorno and Chaudhri highlighted the potential of combining HP’s global reach with Humane’s design-led approach and engineering expertise. “HP’s scale, global reach, and operational excellence — combined with our design-led approach, integration technology, and engineering expertise — will redefine workforce productivity,” they said.

The move comes at a crucial time in the tech industry, as major hardware manufacturers race to integrate AI capabilities into their products. HP’s acquisition positions the company to compete more effectively in the growing market for AI-enabled devices and workplace solutions.

The transaction is expected to close by the end of this month, subject to customary closing conditions.

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