ByIA IHWIHW
[email protected]C
hina’s vacation rental and
homestay market, which
clocked sales of 19.1 billion
yuan ($2.8 billion) in 2018,
is expected to surge this year, thanks
to the wanderlust of fast-growing
middle- and high-income groups,
supportive policies, and the increas-
ing popularity of homestays.
According to a report from the
StateInformationCenter, the sec-
tor’s revenue is expected to reach 50
billion yuan by 2020.
The SICforecasts that by 2020,
the number of short-term tenants is
likely to exceed 100 million and the
number of short-term lodging facili-
ties will exceed 6 million.
Competition in the vacation rent-
al sector is also set to intensify as
both domestic and foreign compa-
nies step up efforts to gain traction
amongChinese millennial tourists.
On offer are high-quality, personal-
ized services, said industry insiders.
The rise of vacation rentals can
be attributed toChinese consumers’
pursuit of high-quality travel experi-
ences.
About 195 million people trav-
eled during the four-day LaborDay
holiday in the first week of May,
up almost 14 percent year-on-year,
according to the Ministry ofCulture
and Tourism.
Their travels generated 117.67 bil-
lion yuan in revenue over the four
days,representingsignificantgrowth
ofmorethan16percentyear-on-year.
Roughly 38 percent of tourists
spent between 501 yuan and 1,
yuan each during the holiday. Their
cultural and tourism consumption
came mostly from family trips,
which spurred the explosive growth
of the country’s vacation rental and
homestayservices,theministrysaid.
In October, the StateCouncil
released an action plan for 2018-
to further stimulate domestic con-
sumption.Theplanemphasizedthat
market access should be relaxed in
several service-related fields like
tourism, and efforts made to boost
the development of short-term rent-
al services like rental apartments
and guesthouses.
“The vacation rental services are
stillnascent.Chinaisoneofthemost
important markets forAirbnb, and
we have seen theChinese govern-
mentholdsapositiveattitudetoward
the sharing economy,” saidAn Li,
vice-president ofAirbnbChina.
Peng Tao,AirbnbChina’s presi-
dent,saidthecompanyisrampingup
efforts to launch educational initia-
tives designed to enlighten landlords
insecond- and third-tier cities, to
improvethequalityofAirbnblistings,
as well as strengthen online reviews
of listings and brand-building.Peng is bullish on the prospects
ofChina’s vacation rental market,
which can help boost the local
employment rate and help drive
economic growth.
Last year,Airbnb debutedAirbnb
Plus inChina. The platform features
a selection of only the highest-quali-
ty homes with hosts known for great
reviewsandattentiontodetail.Airb-
nb Plus is in 164 cities worldwide,
and that includes 13 inChina, such
asBeijing, Shanghai,Guangzhou
andChengdu.
Chinaisprojectedtobethelargest
sourceoftouristsforAirbnbby2020.
In addition, the company has signed
agreements withChinese cities like
Shenzhen,GuangzhouandShanghai
to strengthen cooperation with their
municipal governments.
“There is still huge development
potential for the vacation rental ser-vicesinurbanareas,especiallyinthe
utilization of housing resources and
optimized allocation of resources,”
saidHuangYue,founderandCEOof
short-term rental booking platform
Muniao.
Huang said more landlords and
tenants are expected to join the
short-term rental homestays in the
future, to enjoy the benefits brought
by the sharing economy, which will
greatly improve the utilization rate
of social resources.
Established in May 2012, Muniao
is a vacation rental service.It lists
more than 300,000 properties
for short-term rentals in 396 cit-
ies acrossChina, and offers users
accommodation of verified sources
and family-oriented homestays.
Huang said Muniao will enhance
the quality of its accommodations to
cater to theChinese market.It willverify homeowners’ identities, sup-
port intelligent door locks and offer
family-oriented homestays.It has
also been cooperating with PingAn
Insuranceto offer rental insurance
for both tenants and hosts.
Huang said there is great growth
potentialinvacationrentalsinChina
as they could make up for the tight
supply of traditional hotels during
peak seasons.
Tujia, aChinese online platform
for short-term lodging services, is
looking to lure the country’s young
millennials by beefing up its pres-
ence in overseas markets, including
those inJapan and SoutheastAsia.
It is striving to boost this year’s rev-
enue by 100 percent year-on-year.
“We will continue to increase
investmentsinoverseasmarkets.We
will establish branches or subsidiar-
ies in popular tourist destinations
and cooperate with local vacation
rental service providers,” said Yang
Changle,CEO of Tujia.
The firm is targeting the rapidly
growing outbound travel market.
Last year, it acquiredFishtrip, a bed-
and-breakfast booking platform
based in Taiwan. The move added
about300,000qualityoverseasprop-
erties to its listings.
The company set up a small team
inJapan in 2016. The following year,
it teamed up with Rakuten Lifull
Stay, an e-commerce company in
Japan, to boost its presence inJapan
to take advantage of the 2020 Tokyo
Summer Olympics.
Xiaozhu, anotherChinese home-
stay service provider, claimed over
500,000 active listings across 710cities inJanuary.In October 2018,
thestartupraised$300millionfrom
YunfengCapital — a private equity
firmcofoundedbyAlibaba’sJackMa.
AsChineseoutboundandinbound
tourism sectors grow rapidly, home-
stay platforms must be able to pro-
vide high-quality services to global
consumers, saidChenChi, cofound-
er andCEO of Xiaozhu.
According to a report from iiMe-
diaResearch,varioushomestayapps
inChina had 147 million users last
year, up 83 percent year-on-year.It
forecast the number would reach
300 million in 2020.
JiangXiwei, an analyst with mar-
ket consultancyAnalysys, said there
is huge room for growth of the vaca-
tion rental market as travelers are
willing to try something different,
suchashomestays,duringatrip,and
online services offer diverse experi-
ences these days.
“The short-term home rentals
and homestay services are wide-
ranging now, to satisfy the needs of
various kinds of tourists. Typically,
customers hire such services for get-
togethers, reunions, team-building
activities and to improve parent-
child bonding and communication,”
said Lai Zhen, an analyst at market
research firm iResearch.
Lai said the authorities should
increase efforts to formulate stan-
dards for the emerging market and
implement detailed safety rules, in
cooperation with shared accom-
modation providers. That kind of
approach will help the healthy and
orderlydevelopmentofonlineshort-
term rental services.Increasingpopularityofhomestaysandsupportivepoliciesspurhighgrowthinemergingsector
Vacationrentalmarketsettosoar
Apensioner retreatinWu’shi,avillage in Pan’ancounty,Zhejiang
province. Wu’shi hostedmore than700,000travelers lastyear,and
earned 130 millionyuan ($18.8 million) in 20 18.Ahousekeeperworksatapensioner retreatinAnji,Zhejiang province,on June 4. Thevillage hadseenanexodus of its labor tobigcities for
betterwork,buthas sincetransformedintoaflourishing market forvacation rentalsandhomestays.XINHUA14 BUSINESS August 2 -8,20 19 CHINA DAILY GLOBAL WEEKLY