Homeinns Hotel Group is about to launch its homestay business operation in March through partnerships with qualified house-owners who will operate under its sub-brand of Fairyland Homestay (or Yun Shang Si Ji Homestay), according to an exclusive report of the 21st Century Business Herald.   

The company has signed agreements with 33 B&B owners in eight cities in China to conduct pilot tests on the operation and management system after its research in the second half year of 2015, Lun Li, chief advisor of Homeinns’ homestay BU, told 21st Century Business Herald. The homestay business and operator recruitment will be officially launched in March, and initial target regions are Yunnan province, the Jiangsu Zhejiang Shanghai region, Hainan, Fujian and Guangxi provinces. 

Free-entry franchise 

The Fairyland Homestay brand was spun off from Fairland Hotel brand, which was fully acquired by Homeinns at a cost of RMB 230 million in 2014.

Unlike the standardized franchise model of Homeinns hotels, its homestay business does not charge a franchise fee or other fees, except the cost on brand services. The cost will still be 50% lower than its regular hotel franchise fee.

Homestay business on the rise

Homestay has been a difficult market to crack as there are neither access requirements nor evaluation system, and it’s difficult to get operating licenses. Li said that Homeinns’ kick-started its homestay research and pilot program last year after the government relaxed the policy on homestay. 

Other than property owners leasing out their own properties through a C2C model, there are also B2C players operating open platforms for homestay business, such as Tujia. They aggregate property supplies from property developers, landlords and business entities and lease them out online through a platform managed by agents with teams. Renters are required to use their real names and pay rentals online. 

China’s homestay market presents great potential and the regulation of the market is so far the most open in the world, said Zhijie Zang, co-founder and CEO of zizaike.com, a Shanghai-based homestay booking platform for independent travelers. Homestay business is now legalized in China, perhaps as a bid to fully utilize available housing resources in the market. (Translation by Jerry)