Q&A with China expert, Donald Kim, VP of Business Development at Cozystay
Unless your vacation rental’s calendar is full every day of the year, you will be looking to increase bookings. There are a myriad of platforms out there to list your rental – such as the big ones like Airbnb, VRBO or Homeaway or Flip Key. However, even though you are present on theses pages, are you really reaching all potential guests out there?
A lucrative market, which remains largely untapped, is the large number of Chinese tourists travelling abroad. From 2016 to 2017 the number of vacations Chinese citizens were taking outside the country increased by 7% to 131 million occasions, for example. With that comes a huge spending power. In 2016 alone it amounted to over USD 261 billion for Chinese tourists abroad. So how do you reach Chinese travellers with an interest in staying in vacation rental?
CertiStay had an opportunity to speak with an expert in the Chinese market, Donald Kim. Donald is VP of Business Development at Cozystay, which operates a platform for short-term rentals targeting Chinese vacationers.
1. Donald, thank you for taking the time to answer a few questions for us. Could you introduce yourself and tell us a little bit more about what Cozystay does?
Hi, it is a pleasure to be here. I’m the VP of Business Development for Cozystay and I’ve been working with the company since its launch in early 2015. The idea started with Galen, CEO/Founder, who initially looked at providing student housing for Chinese students in North America and then decided for a model similar to Airbnb but targeting the emerging Chinese tourism market. China has surpassed USA and Germany for outbound travel and will be the largest market for the next 10-15 years. What is fascinating is that China leads outbound tourism, but only 6% of the population holds passports compared to 46% of Americans. Also, Chinese tourists have been the top spenders when travelling since 2012. Galen and I knew that there is a big potential market to capitalize on and being the first Chinese online travel agent (OTA) with headquarters outside of China has an advantage.
2. How are you promoting your Cozystay in China?
We haven’t done a lot of direct marketing in China, because we are still onboarding inventory and developing our technology. Most of our marketing has been through WeChat and attending travel large conferences in China. Because we have an established office in Beijing, we work closely with Chinese OTA’s and local travel agents. We have agreements with Ctrip, China’s largest OTA, and Quanar, China’s second largest OTA, which was acquired by Ctrip. We also have a partnership with Tujia-Sweetome, China’s largest domestic vacation rental platform which recently invested into Cozystay. What a lot of westerners do not realize is that most bookings are still done through travel agents in China especially in the tier 2 and 3 cities. Which is why, working with travel agents in China is imperative.
3. Are short-term rentals a popular concept in China?
Short-term rentals are very popular in China and the country is being inundated by new players entering the market with slightly different approach to the business. Tujia remains to be the largest in China followed by Airbnb. However, new companies such as Xiaozhu, which just raised $300M last October from the Jack Ma fund, are trying to position itself to be major players in the vacation rental industry in China. Other companies such as Zhubaija.com, Onehome.me, Mayi.com, Munaio.com are all fighting to position itself in the market. Ctrip now offers short-term rentals on their platform along with Qunar, and Elong.com
China’s domestic tourism market has expanded rapidly in recent years, driven by a fast-growing middle class and the proliferation of online travel services. As more and more people are travelling domestically, the appetite to book a vacation rental has exploded.
4. What do Chinese guests expect from a good short-term rental?
Cleanliness is very important. To ensure a good guest experience, our property management division supplies simple items in all our accommodations such as chopsticks, soy sauce, rice cooker, instant noodles and a hot water dispenser. For example, Chinese do not drink cold water even if it is very hot outside. We also provide disposable slippers since Chinese do not where shoes inside homes. Our call center provides customer service in English and Chinese through WeChat. In North America, there are several apps to communicate with guests such as iMessage, Text Message, Whatsapp, Viber, Facebook Messenger. However, Chinese only use WeChat. So if a host wants to communicate to Chinese guests, he should download the WeChat app.
5. Speaking from your experience with Cozystay, what can vacation rental owners do to attract more bookings for their listing?
Cozystay operates a property management company, so we understand a high occupancy rate throughout the year is important. To obtain more bookings, vacation rental owners should be listing on as many OTAs as possible but targeting new markets – especially the Chinese market. During the slow season in North America and European, property owners can expect to get bookings for Chinese New Year which is in February and China’s National Day which starts October 1st and lasts for a week.
6. How important is safety for Chinese guests?
A report from China Tourism Academy and Ctrip launched in March 2018 stated that ‘safety and security’ is the number one concern for Chinese tourists. As more and more Chinese tourists are becoming younger with Chinese millennials being the driving force, they are traveling in smaller groups as FITs (free independent travellers) and they all want to be safe and secure starting with the accommodation they are booking.
7. Thank you, Donald. Where can we find out more about Cozystay?