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No threat from sharing economy
Prudence Lui
 

Vacation rentals have not infringed on growth of traditional travel players in China.


The rise of sharing economy in China has given birth to homegrown players like Didi Chuxing and Tujia while home-sharing giant Airbnb has doubled down its investment in the country, but industry members interviewed do not see threats arising from such platforms for the time being.

Safety and security are the greatest differentiators between traditional hotels and home-sharing accommodation, observed Creamy Chen, general manager, Century Holiday International Travel Service (Guangzhou) Branch.



She said: “Clients prefer reliable hotel brands when planning trips to China. Under Chinese regulation, hotels have to scan foreign guests’ passports for registration but if they opt to stay in local residences, it’s necessary for them to inform a nearby police station.

“In fact, we have agreements with hotels to guarantee guests’ personal and food safety during their stay but I doubt home rentals could offer the same confidence.”

Chen also believes that local agents catering to the domestic travel market are more affected than inbound operators handling foreign visitors.

And while Tujia has joined forces with agencies like Nanjing China Comfort Travel Service to enable agents to offer home rentals to their clients, she does not think that such partnerships will become a trend “given the service limitations”. 

Shanghai Jin Jiang Tours’ operations department manager Rong Rong, meanwhile, sees home rentals as a popular option only for FITs and small groups. She added: “It’s a kind of distribution channel targeting a different type of audience and will not compete head to head with our group business.”

Hoteliers, likewise, are unfazed with the growth of vacation rentals in China.

Hilton Shanghai Hongqiao, general manager, Joseph Zitnik, contended: “There is a place for Airbnb in the overall hotel market and distribution system but the traditional hotel business and reservation systems will remain strong. Most guests trust that international hotel brands can ensure them high-quality facilities, service standards and F&B.”

Pudong Shangri-La, East Shanghai, area general manager, Mark Kirk believes that Airbnb tends to attract budget-sensitive travellers, which makes the impact on luxury hotels minimal.

Johnny Li, founder and managing director of Gateway Group, which represents resorts and hotels in Asia and China, surmised: “The mainland market is not mature enough with many domestic travellers still sticking to traditional booking channels.

“Unless Airbnb aggressively goes for the niche market or dangles attractive perks like best offers or affordable rates, it’d be hard to get domestic Chinese travellers to switch from the OTAs that they have patronised for years.”

 

 

This article was first published in TTG Asia May 2017 issue. To read more, please view our digital edition or click here to subscribe.

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