Vacation rental services set to boom

China is projected to be the largest source of tourists for Airbnb by 2020. In addition, the company has signed agreements with Chinese cities like Shenzhen, Guangzhou and Shanghai to strengthen cooperation with their municipal governments.

"There is still huge development potential for the vacation rental services in urban areas, especially in the utilization of housing resources and optimized allocation of resources," said Huang Yue, founder and CEO of 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 cities across China, and offers users accommodation of verified sources and family-oriented homestays.

Huang said Muniao will enhance the quality of its accommodations to cater to the Chinese market. It will verify homeowners' identities, support intelligent door locks and offer family-oriented homestays. It has also been cooperating with Ping An Insurance to offer rental insurance for both tenants and hosts.

Huang said there is great growth potential in vacation rentals in China as they could make up for the tight supply of traditional hotels during peak seasons.

Tujia, a Chinese online platform for short-term lodging services, is looking to lure the country's young millennials by beefing up its presence in overseas markets like Japan and Southeast Asia. It is striving to boost this year's revenue by 100 percent year-on-year.

"We will continue to increase investments in overseas markets. We will establish branches or subsidiaries 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 acquired Fishtrip, a Taiwan province-based bed-and-breakfast booking platform. The move added about 300,000 quality overseas properties to its listings.

The company set up a small team in Japan in 2016. It also teamed up with Rakuten Lifull Stay, an e-commerce company in Japan, in 2017, with an aim to boost its presence in Japan to take advantage of the 2020 Tokyo Summer Olympics.

Xiaozhu Inc, another Chinese homestay service provider, claimed over 500,000 active listings across 710 cities in January. In October 2018, the startup raised $300 million from Yunfeng Capital of Jack Ma, co-founder of Alibaba.

As Chinese outbound and inbound tourism sectors are growing rapidly, homestay platforms must be able to provide high-quality services to global consumers, said Chen Chi, co-founder and CEO of Xiaozhu.

According to a report from iiMedia Research, various homestay apps in China had 147 million users last year, up 83 percent year-on-year. It forecast the number would reach 300 million in 2020.

Jiang Xiwei, an analyst with market consultancy Analysys, said there is huge room for growth of the vacation rental market as travelers are willing to try something different, like homestays, during a trip, and online services offer diverse experiences 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 standards for the emerging market and implement detailed safety rules, in cooperation with shared accommodation providers. That kind of approach will help the healthy and orderly development of online short-term rental services.