For decades, building in hospitality tech required two things: a strong idea and enough capital to prove it.
That combination was enough.
Sometimes, you're stuck in a desert. You have an idea, and nothing else. No shade, no water, no clear path forward. But the founders who found the right market at the right moment built real businesses from almost nothing.
That's when creativity compounds. Individuals, companies, and communities get resourceful. They find ways to grow in the harshest conditions. And once they've survived a desert, they never want to go back.
That's where capital comes in. Its job is to find the sprouts worth backing and help them bloom.
But choosing right is harder than it looks. It's easy to identify mistakes in hindsight. It's much harder to spot the winners before they've won.
The STR industry is facing that test right now. AI is reshaping how people search, decide, and book. And investors are pulling back, waiting to see who actually has the fundamentals to survive.
So how do they decide where to put their trust?
The honest answer is that no one knows exactly where AI is taking this industry. The executives worth listening to are the ones who admit it. They don't have a roadmap. They have a posture: stay capital efficient, build resilience, and stay ready.
Anyone who tells you they have it fully figured out isn't telling you the truth.
This week's conversation examines what it looks like to invest with conviction in a market where certainty is the one thing no one can honestly offer.
STR Global Unlocked Podcast | Episode 27
EPISODE WITH CHRIS HEMMETER, MANAGING PARTNER AT THAYER INVESTMENT PARTNERS
The hospitality industry has absorbed two defining shocks in the past six years.
First came the pandemic. Travel stopped. Then, almost overnight, the idea of renting a private space far from crowds became the only viable option for millions of travelers. STR wasn't just growing. For a moment, it looked like the entire accommodations market was being redrawn.
So, what happened?
STR gained ground, but hotels responded with new brands, new products, and new ways of delivering value. They adapted faster than most expected. That versatility kept institutional capital interested.
The same confidence never fully extended to STR tech. And according to Chris Hemmeter, that gap has a clear explanation: the technology underpinning the short-term rental industry is lagging, right at the moment when the second major shock arrives.
AI is fundamentally changing how people travel. The way consumers discover, evaluate, and choose accommodations is being rewritten in real time. And most STR tech is not ready for it.
For Chris, the equation hasn't changed: the businesses that will come through are the ones willing to change, experiment, and adapt. The ones that won't are the ones waiting for the dust to settle before they move.
Chris Hemmeter is Managing Partner at Thayer Investment Partners, one of the most active institutional investors in travel and hospitality technology, backed by limited partners including Hyatt, Marriott, Hilton, Capital One, and Host Hotels.
AJL Atelier CEO Simon Lehmann sat down with Chris to explore why institutional capital remains cautious about STR, and what founders need to understand about building in an industry where AI is rewriting the rules faster than most roadmaps can keep up.
Chris Hemmeter and Simon discussed:
Why the STR industry's early assumptions about barriers to entry and ADR growth created a churn spiral that pushed generalist venture capital out of the category.
What the collapse of public SaaS valuations by hundreds of millions signals for travel tech, and where AI fits into the recovery.
Why product is no longer a defensible moat when any idea can be built in a weekend, and what Hemmeter believes is the only competitive advantage that still holds.
How Thayer Ventures uses a "construct and convict" model, building early-stage portfolios broadly before concentrating capital only when talent and timing align in the numbers.
Why a $35 million exit can be life-changing for a founder and a write-off for a VC, and how founders can know whether their business is actually built for venture.
Connect with Chris Hemmeter on LinkedIn to learn more about Thayer Ventures.
"Just because we say it's not venture-investable doesn't mean it's a bad business."
Key STR Trends
Industry Check-In
12 Million Properties. Growing Fast. Most Are Not Ready.
The short-term rental industry has strong tailwinds, with global supply growing to 12 million properties and projections estimating this number will reach 17 million by 2029. Not only that, but professionally managed properties are now more common than ever.
The challenge for operators who want to up their game and become much more professional is finding purpose-built operations software that meets their evolving needs. It’s a way for them to create the most value by delivering on expectations.
Breezeway set out to solve this challenge for operators back in 2017. Now, it’s doubling down its efforts, thanks to a strategic investment led by Resurges Technology Partners with the goal of expanding products and deepening AI capabilities that already solve critical needs for operators.
Source: Travel and Tour World
After all, Breezeway’s AI-powered workflows automate and control the service touchpoints that matter most, empowering hospitality teams to deliver on time, to the highest standards, and with a human touch. Powering over 75 million tasks across 90 countries, Breezeway is redefining how hospitality service is delivered by putting work at the center of the stay.
You can learn more about this partnership here.
We want to thank Breezeway for supporting STR Global Unlocked. If you want to set up your Breezeway demo in under 30 minutes, click here.
Weekly News
WORTH A READ
Stay current on the industry. Each edition highlights key insights, major headlines, and the technology shaping travel and short-term rentals.
Some New Jersey towns won't allow STR
While New Jersey is poised to become one of the most active STR markets during the World Cup, 75 towns are pushing back hard. Renting your home in the wrong zip code could cost you more than you made.
AI is reshaping demand before guests even search
The disruption is not happening at checkout. It is happening before a traveler types a single word. How AI is shifting the balance between supply, demand, and service in vacation rentals is a question every operator should be asking right now.
Long-term Airbnb stays are a different game
Not every booking is a vacation. When life forces a longer stay, the rules around what you need from a property, and what hosts need to deliver, change entirely. Are you set up for it?
CLOSING THOUGHTS
The hospitality industry has never moved in a straight line. It never will.
Shocks arrive without warning. Cycles compress and expand. The operators and investors who build assuming stability are the ones who get caught off guard every single time.
The businesses that survived the pandemic did not do so because they had the right plan. They survived because they were willing to abandon the wrong one fast enough. That capacity, to change direction under pressure, is not a soft skill. It is the most important operational muscle a company can build.
The same is true for investing in this environment. Conviction matters. But conviction built on false certainty is just risk wearing a suit.
The only honest posture right now is readiness. The market does not reward those who predicted the future correctly. It rewards those who were already moving when it arrived.
This newsletter and podcast are brought to you thanks to AJL Atelier.
AJL Atelier is a globally recognized consultancy, specializing in the Short-Term Rental (STR) industry, known for our unique blend of trend forecasting, consumer insight, brand strategy, and innovation.
If you liked this newsletter, share it with your friends!
If this email was forwarded to you, subscribe to our Beehiiv’s newsletter here to get the newsletter every week.