Testing time for B&Bs as guests cancel over fears

When Wang Lihong, who runs a bed-and-breakfast near Shanghai Disney Resort, issued a customer refund on Jan 22, she felt the effects of the novel coronavirus on her business for the first time.

Wang was told on Jan 25 that the theme park was closing temporarily for the health and safety of its customers.

"Since then, no orders have come so I closed my business down," she said. "But I still have to pay tens of thousands of yuan in rent and staff salaries every month."

B&B owners and operators like Wang, along with short-term rental platforms, are facing a saturated market due to the outbreak nationwide. But they are taking measures to support stakeholders and recover sales.

According to local home-sharing platform Xiaozhu, the rate of loss in China's B&B industry registered about 90 percent in the early months of this year. Accommodations based on islands were hit hard during this year's Spring Festival period, losing half their usual annual income.

To remedy the situation, Airbnb China said it will provide a $10 million fund in the next few years to help operators in China. It is in line with prevention efforts made by Airbnb, which has an extenuating circumstances policy that applies to reservations where hosts or guests have to cancel bookings due to restrictions caused by an epidemic.

Xiaozhu is following suit by waiving landlord commission fees.

Its local rival Tujia has turned to livestreaming Fanxing of Kugou, trying to reach potential guests. It has invited property owners of eight B&Bs each from different cities to broadcast their properties online and explain to the audience local customs and places to go.

It is reported that nine livestreams have attracted an audience of more than 300,000.

To fend off slow sales, property owners whose B&Bs are in villages and towns have generated income by selling local dishes and crafts.

But for their peers in cities without such resources, the outbreak holds a lesson－to prepare for emergencies, said He Shiqi, owner of two B&Bs in Suzhou, Jiangsu province.

"I want to hedge my bets by making houses more functional and staggering work shifts of my staff on a daily basis," He said.

His stand is similar to that of Shen Aixiang, an industry insider.

Shen said that in the next decade the B&B industry will be intelligence-intensive, whose income will not be determined by input but by operational and marketing capabilities. The epidemic is expected to accelerate this trend.

"Employment will be more flexible and operations can be outsourced to agencies," Shen added.

Also important is to prepare for the other travel season－the Labor Day holiday in early May－when many operators expect consumption to bounce back.

Airbnb China data show that the search volume for domestic lodgings during the Labor Day holiday has increased more than 2.5 times compared with the same period last year. The search volume for lodgings during the summer holiday is also higher than that of last year.

Yu Lifeng, who operates 14 lofts and one villa in Weihai, Shandong province, said the virus outbreak overlaps with an off season for the short-term rental business.

"After all, peak season earnings will determine the whole year's income," he said.

On March 9, Shanghai Disney Resort began to partially resume operations with a limited number of shopping, dining and recreational experiences available in Disneytown, Wishing Star Park and Shanghai Disneyland Hotel. It is the first step in the theme park's phased reopening and a hopeful sign for Wang.

"When Disneyland is back to normal, I will resume work," Wang said."It is natural to expect that reservation volume will return to normal levels soon."