How homestay industry survives after COVID-19

The COVID-19 outbreak has severely impacted China’s homestay industry. Data from xiaozhu.com, a Chinese website for daily and short-term room rentals, indicates that most homestay owners have had cancellations since the outbreak. Bloomberg reported that the pandemic had caused the Airbnb business in China to decline by 80 percent compared with the same period last year.

Tujia, a lodging service sharing and booking platform, said it is suspending its homestay business in 20 popular tourist cities. 

Considering the current situation of the homestay industry in China, we'd like to provide some suggestions for the industry to recover and deal with future challenges.

Optimize cleaning

Safety and health are highly valued by consumers following the outbreak. Specifically, more than 90 percent of potential customers are concerned about hygiene in rooms and the health of service staff. Therefore, homestay businesses should optimize and advertise the cleaning process to reassure customers. 

For example, they may use multiple media such as websites, WeChat and livestreams to show their cleaning and disinfection procedures. In addition, they can also provide a "reassurance card" in rooms which record the cleaning times and the temperature of the housekeeping employee.

Adjust the layout

Shared space at homestays, such as meeting rooms and public balconies, facilitate social interaction between guests and hosts. This kind of interaction allows guests to communicate with the hosts and other guests and contributes to a memorable travel experience. However, following the outbreak, there has been significant growth in demand for social distancing. 

Although the homely feeling and social interaction are unique advantages of homestay compared with other services, these features may run counter to the current needs of customers due to the pandemic. Considering this, homestay businesses need to take measures to help guests enjoy social interaction while reducing the risks. 

For example, they may adjust the layout of public areas by increasing the space between chairs and tables, using screens to divide public areas, and allocating or limiting the time public spaces can be used.

Develop surrounding markets

For safety reasons, customers will be cautious about taking long-distance trips at least in the short term. In addition, cross-province and cross-border tourism is not encouraged for the time being. As a result, short-distance trips become the main option for leisure travel. 

Focusing on the major target market which comprises independent travelers and families from nearby locations, homestay businesses should adjust their marketing strategies. For example, they may organize guided tours and family tours to help guests experience the local scenery and culture. In addition, some travelers may prefer to visit a niche destination to stay away from crowds. 

Homestay businesses may provide accommodation plus a local tour guide, accommodation plus transport and other customized products to attract these customers.

Leverage new marketing channels

Social media platforms, webcasts and online videos have become popular channels for marketing promotions. Homestay businesses should increase brand awareness by sharing the homestay experience through live broadcasts. 

In addition, they can use WeChat to showcase the accommodation, which could increase conversion rates at a relatively low cost.

Seek diversification

Diversification could enable homestay businesses to withstand risks and uncertainties. Specifically, the coronavirus pandemic has made the public adopt healthy lifestyles, which facilitates the development of rural tourism and ecotourism. Therefore, the rural homestay industry should launch experiential products that focus on meditation and returning to nature. 

For urban homestay businesses, launching long-term rental products might be an option for diversification. They may also share spare rooms and public spaces with other enterprises during the off season, for instance, by jointly creating a wedding venue.

Improve anti-virus measures

Because of coronavirus, prevention measures are necessary for the survival and development of lodging services, especially homestay businesses. Home operators and third-party booking platforms should collaborate to enhance anti-virus measures and continually check the health QR code of each guest to ensure the safety of the accommodation.

To summarize, during this challenging time, homestay businesses should create consumer-centered products and services, leverage digital marketing channels, seek diversification to develop the market and collaborate with third-party booking sites and the local government to address these challenges and achieve sustainable development.

(Dr Jiang Yangyang is assistant professor in marketing at Nottingham University Business School China. Lyu Cenhua is a 2019 master's graduate of science in international management from Nottingham University Business School China.)