Po­ten­tial Airbnb-Xiaozhu linkup praised

China Daily (USA) - - ACROSS AMERICA - By PAUL WELITZKIN in New York paulwelitzkin@chi­nadai­lyusa.com

If home-shar­ing gi­ant Airbnb ac­quires Chi­nese ri­val Xiaozhu Inc, it will help the US com­pany gain mar­ket share in the main­land mar­ket, an­a­lysts said.

Pub­lished re­ports this month have in­di­cated that Airbnb is in talks to buy Xiaozhu. Airbnb has a rel­a­tively small pres­ence in China, with a staff of just 30 and 75,000 home list­ings. Xiaozhu said it has more than 100,000 list­ings in more than 300 cities in China.

How­ever, Xiaozhu and Airbnb both trail Tu­jia.com in China, which said it has list­ings for 450,000 homes, in­clud­ing 335 des­ti­na­tions in China and 1,018 overseas.

Peng Liu, an as­so­ciate pro­fes­sor of real es­tate and fi­nance at the Cor­nell Uni­ver­sity School of Ho­tel Ad­min­is­tra­tion, said in an email that Airbnb is do­ing well in China but not great. “Ac­quir­ing Xiaozhu at a rea­son­able price is a great strat­egy for Airbnb,” he added.

Wolf­gang Ge­org Arlt, direc­tor of the China Out­bound Tourism Re­search In­sti­tute in Ham­burg, Ger­many, said a Xiaozhu ac­qui­si­tion would help Airbnb to be­come a more “Chi­nese” com­pany when deal­ing with the au­thor­i­ties and the Chi­nese mar­ket.

Arlt said the home-shar­ing mar­ket in China has great po­ten­tial.

“For a group-ori­en­tated so­ci­ety, the idea of home-shar­ing is very at­trac­tive; meet­ing new peo­ple com­bined with sav­ing money sounds like a for­mula for suc­cess. If Airbnb and sim­i­lar com­pa­nies can suc­ceed in giv­ing home-shar­ing a pos­i­tive im­age and avoid the im­age of ‘only peo­ple too poor to pay for a ho­tel do this’ and can suc­ceed in con­vinc­ing the au­thor­i­ties that there is no danger for po­lit­i­cal sta­bil­ity in­volved, it can open do­mes­tic travel to new seg­ments of the so­ci­ety,” he wrote in an email.

Liu doesn’t an­tic­i­pate any re­sis­tance from reg­u­la­tory of­fi­cials in China if the trans­ac­tion be­comes a re­al­ity.

He also said hav­ing a lo­cal part­ner will help Airbnb avoid some of the prob­lems that US star­tups like ride-shar­ing ser­vice Uber have had in China.

“Ear­lier this year, Uber sold its en­tire China business to ri­val Didi in ex­change for a stake in its Chi­nese ri­val. Uber was do­ing great, but Didi is do­ing even bet­ter. Home ac­com­mo­da­tion is a lo­cal business, and a low-en­try and com­pet­i­tive in­dus­try. Lo­cal firms would have the nat­u­ral ad­van­tage of operations and un­der­stand­ing the ever-chang­ing con­sumer pref­er­ence,” he said.

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