Online home-sharing platforms in China like Airbnb feel the chill as coronavirus outbreak hits bookings

Tujia, another Airbnb rival in China, said suspension guidance from the authorities had affected most of its listings in the city.

The early months of 2020 have been especially chilly for Ivy Meng, a Beijing-based homestay host, after waking up to news last week that online booking platforms Airbnb and Xiaozhu will suspend all bookings in the city for the rest of the month as China continues to battle a deadly coronavirus outbreak.

An experienced host for over three years, Meng says her occupation rate has already “dropped to the slowest on record for January”, with her one-room flat left vacant for nearly half of the month as people all over China stop traveling because of the coronavirus outbreak.

“Even inquiries have gone quiet, with some people asking if they would be stopped by security staff at the residential compound,” said the 32-year-old tech worker. “Now my listings calendar is locked and completely empty.”

Meng is not hopeful about the future either.

“Before, hosting people from all corners of the country sounded interesting,” she said, “now the idea automatically triggers health alarms for many people.”

Meng is among China’s growing number of homestay owners who now face the harsh realities of online bookings being wiped out by health fears across the country, which faces an unprecedented collapse in tourism and travel at what is traditionally one of the busiest times of the year.

The market size for short-term rentals in 2018 was about USD 7 billion in Asia, compared to USD 50 billion for North America and USD 29 billion for Europe, according to a research note by DBS Bank. China commands close to 60% of the Asia market, according to Euromonitor, with the short-term rental sector growing at a compound annual growth rate of around 50% from 2013-2018.

“Tourism, flight, and hotel operators together with local service companies are likely to take a hit, as people are not moving around any more,” said Jeffrey Towson, a private equity investor and professor at Peking University.

On Friday, online home-sharing platforms including Airbnb and Xiaozhu moved to suspend bookings of all listings in Beijing with immediate effect through to the end of February, to comply with guidance from Beijing and local authorities.

Spokesmen for both companies confirmed that suspensions at the current time only apply to Beijing.

“Airbnb appreciates that disease control efforts are causing overall travel disruptions that also affect our community,” the Silicon Valley-based company said last week. “We will refund and support guests who have canceled reservations.”

Tujia, another Airbnb rival in China, said suspension guidance from the authorities had affected most of its listings in the city, and the company was working with hosts to study measures that would restore confidence.

The infectious respiratory illness has killed 910 people globally, with all but two of those deaths occurring in mainland China. Chinese authorities on Monday morning reported 3,062 new cases of infection as of Sunday, taking the total number of cases in the country to 40,171.

Major ticketing and hotel-booking platforms in China, including the country’s railway operator, have offered free cancellations to those who canceled their trips during the recent Lunar New Year holiday.

Online travel giant Ctrip announced last week that it would offer RMB 10 billion (USD 1.42 billion) in small loans to hotel operators and service providers on its platforms in an effort to get through the “special period”.

“The tourism industry is relatively vulnerable in terms of standing up to risks, and even more so for small businesses like homestay,” said Huang Wei, a Xiaozhu spokesman, adding that he expects the industry to stay flat in the coming one to three months.

“If the virus can be stabilized, the industry will likely see a huge rebound and a return of market faith.”

This article first appeared in the South China Morning Post