The short-term private rental market is booming in China ever since it went online.

Tourists who swarm into scenic destinations, traveling businessmen, students taking exams in distant cities, people from small communities needing hospital examinations - all are creating demand for temporary accommodation.

On the supply side, there are huge housing reserves. A sizable number of city dwellers now own more than one vacant house and many like to cash in on their properties.

Competitive prices are a major attraction for travelers seeking residential homes rather than hotels. In Beijing, a room in a budget hotel costs 200 to 300 yuan ($31.75 to $47.63) a day. A residential home with more than one room and a larger living space costs the same or less on regular days.

Convenience is another reason. Zhang Juntao, a Beijing resident who traveled to Sanya, Hainan province, for the Spring Festival holiday with members of his family, said convenience was the main reason he chose a short-term private rental.

"I was with my son, my wife and her parents. It is really convenient to have a living room, two bedrooms and a kitchen. The host even left us with a set of kitchenware," Zhang said. "The only setback was there was no cotton quilt."

Industry observers say the market has existed for a long time but it was not until the second half of 2011 that a number of consumer-to-consumer (C2C) websites emerged to capitalize on the trend.

Youtx.com, which is named after youtianxia or "traveling around the world", is one website that provides short-term residential renting. Launched by soufun.com, the country's largest property portal, as a venture in September 2011, it has become one of the largest short-term rental websites in China.

"We are expanding really fast," Liu Jian, chief operating officer of soufun, said. Outside his office is a huge room in which hundreds of employees are busy answering phone calls from customers.

"Since September 2011, we have grown the number of available houses to more than 60,000 and cover in excess of 300 cities nationwide," he said.

Although soufun offers youtx.com abundant money for its operations, Liu stressed that what is important for these websites is the experience of the parent company. In youtx's case, soufun has already accumulated tremendous knowledge and experience in the housing market, which enabled it to put 60,000 homes on its books in such a short time. Having rich information of available houses is essential for this kind of website.

"You have to be in this industry," Liu said. "For us, the short-term rent is just an extension of our main business."

But not all short-term private rental websites developed in this way. Airizu.com, an independent startup, was launched in April 2011 by three young men with masters of business administration degrees from overseas. The 38,000 houses in more than 70 cities it claims it now has on its books were developed by its marketing team, according to Adrian Li, a 30-year-old British-born Chinese.

"We first developed our houses. Then, after the site became popular, landlords started coming to us," he said.

Airizu is not short of money. Last July, it received 2 million euros ($2.7 million) in venture capital. Li said he and his colleagues have been in talks with several funds over further investment.

Airbnb's success story in the capital market is a good example of the 2011 goldrush in short-term rental websites.

The global network of accommodation offered by locals enables travelers to book vacations in other people's homes. It was founded in the United States in 2008 but it was not until 2011 that it received several million venture capital dollars, leading Chinese entrepreneurs to copy its model.

But China's market proved totally different, according to Li.

"Airbnb's hosts usually are ordinary local residents who share their spare rooms. But the people who rent out their homes on our website are mostly professional and usually hold more than one empty house," he said.

Another major difference is the trust between landlords and renters.

"In the United States, people are willing to live with the renter in one house, which showcases the basic trust between them," said Liu of soufun. "Here the trust is still weak. Few landlords live with the renter."

Building trust can become a potential advantage that C2C websites could develop on the bulletin boards where they advertise properties and in online spam.

Youtx charges a 5 percent commission on each deal. Liu of soufun said the main reason for this is to let both sides know it is a serious deal so neither side will default without good reason.

The quality of the service can vary, according to Liu.

"For example, if a renter arrives in a city only to find the landlord with whom he had previously made a deal online can't be reached by phone, what can he do?" Liu asked.

He said if the deal is made with youtx.com, the renter could contact the company. If the landlord is still unavailable, youtx.com will offer them free accommodation or somewhere to stay costing no more than 30 percent of the previously set price.

Youtx even launched a 20 million yuan campaign to ensure the renter can call the company 24 hours a day and get a solution within 30 minutes. Airizu promised all the information on its website, including photos, is checked by their local teams.

Eventually, Liu said, trust can be built on the fact that both renter and landlords can see the benefits of being honest.

Wang Donghai, who visited Sanya during the Spring Festival holiday, booked a house near the beach through youtx. He commented on its online page when he came back, saying the sea view was exactly as the photos indicated and the landlord was so hospitable that he even went out to buy a pan for Wang on New Year's Eve.

"I'll come back," he wrote.

Liu said: "Wise landlords have to take online comments very seriously to ensure their credibility. One negative comment could ruin their business, even if all the other comments are positive." 

Source:china.org