Accommodations accounted for about 20% of total online travel transactions in 2016 and have the potential to reach 100 billion yuan according to China Housing Sharing Development Report 2017.

The number of users sharing accommodations was only 35 million in China in 2016 according to the report. Total transactions of China’s accommodation sharing market reached 24.3 billion yuan with over 2 million users providing such services.

The top online platforms for short-term accommodations in China include Tujia.com, Mayi.com, Xiaozhu.com, and Airbnb. Tujia and Mayi have the highest brand awareness in China (over 70%), followed by Xiaozhu and Airbnb (40%-70%) according to iResearch data.

Search engines, social ads, and web portals are the top channels for China online users to become aware of short-term accommodation platforms.

Short-term accommodation market in China reached 8.78 billion yuan in 2016 with a growth rate of 106.1%; it’s estimated to grow by 42.6% and 35.5% to reach 12.52 billion yuan and 16.96 billion yuan in 2017 and 2018 respectively.

Close to 60% users in China booked short-term accommodations for family trips. Traveling with friends (17.5%) is the second largest user group.

Over 60% users book short-term accommodations 2-3 times per year. And, over half (50.6%) stayed an average duration of 3-4 nights.

Apartments are the most selected room type (50.6%) for short-term accommodation market in China in 2016, followed by inns (23.2%) and farmhouses (12.3%).

43.6% charged an average daily rate of between 200 and 300 yuan, which is about the price of economic hotels in China. 36.9% between 301 and 500 yuan.

Unlike hotel bookings on Ctrip or eLong in China (most require no payment for bookings), over one-third of short-term accommodations require full payment for booking and 40.6% charge deposits. Users are currently not comfortable with this; over one-third of users expect no payment at all for booking rooms.

Having more rooms for selection is the top factor for Chinese users to choose a specific short-term accommodation platform; photos, reasonable pricing, and customer service are also important factors.

Mobile clients are the top channel for online bookings of short-term accommodations.

84.6% short-term accommodation users prefer to book their stay around scenic spots; 61.6% in business districts; 46.2% near airports; and, 32.4% near subways.

Over 60% short-term accommodation users in China are between 26 and 35 years-old. Near 80% have a degree; and, over one-third have a monthly family income of between 15K to 20K yuan.

Also read: An Overview of China’s Local “Airbnb” (Xiaozhu, Tujia, Zhubaijia…)

Following the rising success of Airbnb, China’s short-term accommodation market is also booming during the recent years and reached 24.3 billion yuan in 2016. Players leading this market include Tujia.com, Mayi.com, Xiaozhu.com, and Airbnb.

Tujia Short-term Accommodation, Tujia.com

Founded in December 2011, Tujia acquires bulk and standard new housing sources working with real estate developers and room owners. And, it standardizes the management and operations of the rooms. It offers the most comprehensive room selections in the short-term accommodation market, over 400,000 rooms across travel destinations and key cities in China.

Xiaozhu, one of its main competitors, mainly targeted at first-tier and second-tier cities while Tujia mainly at tourism destination cities market, which was similar to HomeAway.

In terms of the business operation model, HomeAway and Tujia are totally different. Tujia cooperated with about 80% of China’s top 100 real estate developers, providing design ideas and solutions of houses to make it more in line with consumers’ expectations. The standardization of new houses could solve the shortage and quantity problems of Tujia.

In addition to renting houses from the developers, from the management point of view, Tujia would also support short-term hotel accommodation by standardized services and a large number of houses. In the future, Tujia would further integrate online and offline resources and transform to a combined model of both B2C and C2C.

Ant Short-term Accommodations, Mayi.com

Mayi.com, founded in November 2011, offers beyond 300,000 short-term accommodations including tickets of tourists attractions, car rentals, and etc. Mayi was acquired by Tujia in 2016.

It focuses on family customers and 80% of its bookings came from family travelers.

Xiaozhu Short-term Accommodation, xiaozhu.com

Launched in August 2012, Xiaozhu.com platform provides about 140,000 rooms. It advocates personalized accommodation space to encourage the landlord to share their own life experiences, allowing users to enjoy deep and unique experiences.

China’s “Airbnbs” actually began from online classified information platforms, such as mayi.com, muniao.com and etc. Xiaozhu short-term accommodation was the closest in concept and business model with Airbnb. However, the exact clone of Airbnb model may not work well in China as proved; Xiaozhu had to adapt to localize its business.

By accelerating the growth of the supply end, Xiaozhu is devoted to building an order platform for C2C model. As of July 2015, the platform covered more than 200 cities, and the number of accommodations exceeded 50,000 and about 10,000 individual house owners. The number of transactions has increased by four times compared with that in early 2015.

Related: China Outbound Travel Forecast 2016-2021

Zhubaijia Short-term Accommodation, zhubaijia.com

Founded in March 2012, Zhubaijia focuses on outbound tourism market with over 250,000 rooms across 70 countries. Over 60% of its revenues came from overseas short-term accommodations in 2016.

Zhubaijia was a special existence in China’s short-term accommodation market. It targeted domestic outbound tourists who would rent houses abroad for a short period, which is different from Xiaozhu and Tujia.

Zhubaijia was originated from the Asian office of Wimdu in October 2012, formerly known as the “European Airbnb”. After Airbnb entering China, it first expanded the needs of Chinese outbound tourists, which was almost coincident with the strategy of Zhubaijia. However, many houses and services from Airbnb couldn’t be guaranteed and suitable for the Chinese, which was just the superiority of Zhubaijia.

Zhubaijia had its own set of access and audit standards of houses: the platform would follow the Putonghua proficiency level of landlords, attitude towards Chinese, reception of Chinese tourists, response speed, cleanliness, traffic, facilities and so on to search for good accommodation sources. In addition, Zhubaijia would supply a series of services including consultancy, language services, delivery, dispute resolution and others.

Most short-term platforms including Airbnb generate revenues by charging a commission while Zhubaijia does not charge any from users or landlords. The future business model of Zhubaijia would be to generate revenues through related outbound travel services and might support personalized services for different users.

With the development of the online travel market and the popurity of the tourism, short-term accommodation would usher in new development opportunities. And to gain profits, China’s short-term accommodation operators must change to meet with China’s unique situation; or they may be out of the market.

Also read:  China Travel Market to Reach $617.4B in 2015