"The woman sent me a photo after the gauze was removed and she looked gorgeous," Gao told Beijing Review, adding that they have stayed in touch.

After a job transfer from Beijing to Shenzhen in south China's Guangdong Province, Gao's home-sharing business went with her. Over the past four years, she has hosted more than 500 tenants of various occupations and nationalities and become friends with many of them. "I'm not supposed to earn money in this way, since I have my own job," she said, "For me, it is more like a lifestyle to enrich myself in my spare time."

Home-sharing rentals have gained momentum in China in recent years. While creating a new possibility for accommodations, platforms like Airbnb have ushered homeowners into a fast-growing and fiery market where there are opportunities for people like Gao who want to pursue a new way of life and for those who are in need of financial gain. On the other hand, as more people take a bite of the market, problems such as fierce competition and lack of regulation have emerged.

A lucrative market

In 2018, about 147 million people booked short-term lodging accommodations in China and the figure is expected to surpass 300 million by 2020, according to a report by market researcher iiMedia.

Meanwhile, China's home-sharing market was estimated to reach 50 billion yuan ($7.4 billion) in 2018, with the number of shared homes exceeding 6 million, said a report released by the State Information Center (SIC), an affiliate of the National Development and Reform Commission, in May last year.

"In 2015 when I registered with Airbnb, there were only a few hundred listings in Beijing," Gao said. "The story is totally different now." Following her example, seven of her friends joined the home-sharing service in these past years, she added.

According to Airbnb data, over 8.6 million Chinese tourists have used the platform, which had about 150,000 listings in China as of August 2018. Although it is the world's largest home-sharing firm, Airbnb has only managed to garner a 7-percent market share in China, falling behind local rivals Tujia.com and Xiaozhu.com,

which together control nearly half of the market. The company is stepping up its efforts to win the race, however, saying it expects China to become its largest single market by 2020.

During the May Day holiday on May 1-4, the change in people's lodging choices was evident. Statistics released by Tujia.com showed that its home-sharing bookings in the period increased by 60 percent year on year.

The trend foretells a huge potential in the market. At present, the penetration rate of home-sharing rentals in China's lodging industry is only 2.5 percent, which is much lower than the UK's 37 percent. There is room for six to eight times worth of growth in the next five years. It was expected that by 2030, the penetration rate in China would reach 15 percent, according to a report released by the home-sharing platform Zhenguo.com in April.

Regulation challenges

"Most of the early entrants into the industry made money regardless of the quality of their homes or services, whereas since 2018, the situation for some homeowners has not been encouraging since competition has intensified," Feng Weihe, CEO of Zhenguo.com, told online media ThePaper.cn.

"Normally, the income just covers my rent and sometimes, in the high season, it's possible to earn a few thousand yuan per booking," Gao said, adding that this situation was due to high rents in large cities like Shenzhen and a growing number of competitors including both individual homeowners and budget hotels. Currently, Gao's tenants mainly consist of business people and overseas students. She doesn't want to expand her business, citing that it is too time-consuming.

According to the Zhenguo.com report, hosts with less than five rooms enjoy a higher lodging rate than those who have more than 50, with the former exceeding 50 percent and the latter coming in at only 25.7 percent.

Feng explained that the economy of scale doesn't work very well for the home-sharing industry. If a homeowner cannot guarantee the quality of services, and the cost remains the same, the efficiency decreases, which leads to failure.

In addition, a lack of industrial standards has factored into the reasons why some homeowners are weighing their expansion options.

"Currently, the customer-to-customer business model prevails in the home-sharing market. As the hosts and tenants are major participants, platforms are unable to conduct direct management of the shared homes and prevent their facilities and equipment from being damaged, which needs to be improved," said Cai Hong, head of the Department of Tourism Management at Beijing-based Capital University of Economics and Business.

However, the regulatory approaches and market access requirements used for the hotel industry are no longer applicable given the current development of the home-sharing business, industry insiders said during a recent symposium held by the SIC.

In 2018, a group was jointly established by Xiaozhu.com, Airbnb and a sharing economy research center of the SIC to promote the issuance of relevant industrial standards. In the same year, the SIC also released its proposals for regulation on home-sharing services, which are the first of its kind in China.

Some local governments have also taken steps. Zhuhai in Guangdong has issued regulations to improve the management of the home-sharing market, clarifying the definition of home-sharing, location requirements, registration procedures and penalties for violations. Beijing has also included clauses on home-sharing rentals in its revised tourism management regulations.

"While issues such as safety, sanitation and fire protection are part of the market access requirements, law-based management of the home-sharing industry is urgently needed," Zhang Xiaojun, President of the China Tourism Homestay and Boutique Hotel Association, said.

Gao is optimistic about the prospect of home sharing and believes that customers want high-quality services. She is waiting for Shenzhen's regulations on the industry, which she said will strengthen her confidence to continue by providing more services to future tenants.

Copyedited by Rebeca Toledo

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