Airbnb, other platforms to see Chinese market 'triple by 2020'

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China’s holiday rental market, buoyed by the growth of Airbnb and similar domestic platforms, will more than triple in size by 2020 and be worth 50 billion yuan (7.84 billion US dollars), according to a report released Tuesday by the State Information Center (SIC).

The study, by one of China’s biggest think tanks under the National Development and Reform Commission, found that the house-sharing sector boomed last year, growing by 70.1 percent to 14.5 billion yuan (2.28 billion US dollars).

Seventy-six million people used house-sharing platforms in China in 2017, staying in around three million properties available online.

In the next two years, the SIC expects guest numbers to rise to 100 million, with available rooms set to double to around six million.

With growing maturity in China’s sharing economy, the SIC’s report says that competition within the industry will intensify as new players enter, with the Chinese house-sharing sector already dominated by Airbnb and domestic platforms Xiaozhu and Tujia.

Short-term property-sharing is set to tighten its grip on the overall tourism sector in China for the long-term, with the bulk of both landlords and guests made up of young people. The average landlord is only 33 years old, 60 percent of property owners are female and 70 percent have university degrees.

70 percent of tenants are aged 18-30, an age group widely seen as a generation happy to spend money on tourism, new experiences and go overseas.

Therefore it’s no coincidence that Airbnb works with Chinese mobile payment platforms to process bookings across its four million properties worldwide, while leading domestic players Xiaozhu and Tujia have also started listing properties outside of China.

Xiaozhu, which means “little pig” in Chinese, entered a global strategic partnership with Agoda earlier this year, with both companies agreeing to share expertise and resources, including 100,000 new extra listings on each platform.

Tujia meanwhile has looked to expand overseas through funding rounds and a series of partnerships, mergers and acquisitions, particularly in Asia. The company has pushed into Japan’s house-sharing market, and has plans to add 300,000 new overseas destinations to its portfolio in the near future.

While the expansion of property-sharing in China marks an exciting range of new opportunities in the tourism industry, concerns remain over the lack of regulation as well as what it means for the hotel sector.

A study in the US released in February showed that in the 10 cities with the biggest presence of Airbnb listings, hotel revenue had fallen by 1.5 percent, with bookings down 1.3 percent.

Major global destinations such as Paris have seen Airbnb targeted for failing to meet local regulations, sparking local resentment as the soaring property-share industry increases property prices.

In China, Airbnb has around 150,000 properties listed on its website. The company has earmarked the country as one of its most important markets, with plans to make it the biggest source of rental properties by 2020.

In the last three months of 2017, more than one million guests checked in at Chinese Airbnb properties, triple the amount seen the year before. Since 2015, the company claims its Chinese business has grown more than 100 times in size.