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Beijing’s non-compliant short-term rentals delisted before Universal Studios opens

09/01/2021| 10:03:34 AM| ChinaTravelNews 中文

The latest regulatory control will affect a number of short-rental operators chasing after business opportunities brought by the Universal Beijing Resort.

Nine short-term rental online platforms including Tujia, Airbnb, Qunar, Trip.com and Meituan are required to remove all non-compliant listings in Beijing’s Tongzhou district within seven days, as the district implemented rules in accordance with the Notice on Standardized Management of Short-term Rentals issued on December 24, 2020. This was announced in “Tongzhou Rongmei”, an official media outlet of Beijing’s Tongzhou District where the much-awaited Universal Beijing Resort is located, on August 22.

The policy has since been applied to cover all short-term rentals in Beijing. Tujia sent a notice to its property operators that all properties in the Chinese capital would have to suspend operation starting from 0:00 a.m. on August 29, while bookings confirmed before that time were unaffected.

Signs of regulatory control emerged early on

The Notice on standardized management of short-term rentals was issued way back in February.

The notice states that residential properties used for accommodation services charged by the hour or the day will be subject to different management rules by region. Properties in Short-term rentals are prohibited in Beijing’s core districts, while those in other districts must submit six documents for approval. The documents are the management rules of the neighborhood or written consent of all concerned parties, the owner's and operator’s identity documents, the property ownership certificate and a security guarantee document signed with the local police station.

The Tongzhou district’s regulatory authorities held talks with major short-term rental platforms in mid-August, signaling the implementation of the rules on urban short-term rentals. As of August 28, booking platforms Muniao and Tujia have removed all properties in the Tongzhou District.

 Muniao has removed thousands of listings, accounting for about 15% of its Beijing listings, and will only relist those that can provide the required documents to prove their compliance, Muniao told ChinaTravelNews.

A source told ChinaTravelNews that all home-sharing operators were eager to comply with the requirements,  but the regulatory move presented the biggest challenge yet for the short-term rental industry, as it would take time for operators to have all the documents in good order. 

Homestay businesses face significant losses

A number of the affected operators were chasing after business opportunities brought by the Universal Beijing Resort, which is going to launch on September 20. As of June this year, short-term rental houses near the resort increased by 70% from the same period of 2019, according to an official media report.

The regulatory control would cause the operators to suffer substantial financial losses. The unnamed source told ChinaTravelNews that a rental property with 30 rooms might lose up to RMB 120,000 monthly, taking into account lost income and manpower cost of about RMB 4,000 per month, in addition to the up-front investment of nearly one million yuan for refurbishment. 

The source said that if such short-term rentals were eventually banned, operators would have to shift to long stays in the future, and the revenue would be halved as a result, thus aggravating the financial losses.

TAGS: short-term rental | Tujia | Muniao | Beijing | regulation
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