“SHARING economy” has become a buzzword in the era of the Internet as more industries set foot in the field of making profits while sparing resources like cars, offices, houses and so forth. In Shenzhen, the services provided by short-term lodging apps are prospering, although there are also challenges in management, safety and quality.

Apart from the globally known app, Airbnb, an array of apps for short-term lodging, like HomeAway, Tujia, Xiaozhu and Mayi, are taking shares in the huge demand for short-term rental apartments or houses.

Shenzhen, as one of China’s largest clusters of innovation, is a popular city for such Internet companies to promote their business due to the large mobile population.

Internet companies are not the sole players in the industry. Many small startups, hotel managing groups and even individuals are also playing a part.

A man identified as Datang and his startup have been operating 17 sets of short-term rental apartments in Futian CBD since October 2014. Commissioned by the property owners, the startup is responsible for decorating and managing the rental apartments.

Datang said that it was a profitable business. Apart from February, when most people leave Shenzhen for their hometowns for the Spring Festival holiday, all 17 of the apartments have been fully booked throughout the years.

Since the startup is targeting high-end customers, they have invested a lot in the apartments’ decoration and equipment such as massage chairs, projectors and screens. Take one set of apartments they are decorating at the moment as an example, which costs 1,200 yuan (US$175) per day for the whole apartment and 400 yuan for a single room.

The emergence of app-based short-term rental apartments has had a negative impact on many hotels, while some hotel managing groups also take part in the business. Yating, a hotel managing company, entered the industry last July and signed up for 120 sets of apartments at a residential compound in Nanshan District.

The company decorated the apartments with the same standards and rented them out to people who wanted to stay in Shenzhen for a short period of time, mainly for business trips.

Unlike the startups and companies, a woman going by the alias Xiaonan earns profits by renting out three spare rooms in an apartment that she has been renting since 2016 in Bao’an District. “Renting out the rooms for short periods can save me from having unfriendly roommates and helps me cover the rent that I need to pay,” said Xiaonan.

According to staff members from both Tujia and Xiaozhu, two short-term lodging apps, unlike Airbnb where most of the operators of the accommodations are the property owners, a larger number of apartments in Shenzhen are operated by agents.

Most of the short-term lodgings are located in populous areas such as the Shenzhen Convention and Exhibition Center, Cocopark, Dongmen or tourist spots and resorts like Dameisha, Xiaomeisha and Jiaochangwei.

Data provided by the Xiaozhu app suggested that Guangzhou and Shenzhen are the two cities with the largest numbers of registered members. Young people, between 25 and 35, represent more than half of the total registered members.

One peculiar characteristic of Shenzhen’s short-term lodging market is that most of the customers are people on business trips. Therefore, many agencies would consider adding business functions to the rooms for the individuals or groups on business trips.

Although the market is large and promising, there are still many challenges. For example, the legitimacy of individuals renting short-term accommodations remains to be discussed as there are still no regulations on the registration or supervision of such accommodations.

“It would be very difficult for individuals to get a license from the government as the business and fire requirements are hard to meet,” said Xiaonan.

Also, in the competitive environment, short-term lodging apps, hotel management groups and individual operators have to provide personalized services to customers in order to attract and retain business.

(Zhang Qian)