The outbreak of COVID-19 has severely impacted China’s homestay industry. Data from Xiaozhu.com indicates that most homestay owners have suffered from cancellations since the COVID-19 outbreak. Bloomberg reports that the COVID-19 pandemic has caused the Airbnb business in China to decline by 80% compared with the same time last year. Tujia announced that it would suspend its homestay business in 20 popular tourist cities from April 26, 2020. Considering the current situation of the homestay industry in China, this article provides suggestions for the homestay industry to recover, and deal with future challenges.

1. Optimize the cleaning process

Safety and health are highly valued by consumers following the outbreak of COVID-19. Specifically, 91% of potential customers are more concerned about the cleanliness of the room and the health of service staff. Therefore, homestay businesses should optimize and visualize the cleaning process to reassure consumers. For example, they may use multiple media vehicles such as websites, WeChat mini programs and WeChat public accounts to exhibit the cleaning process and disinfection procedures. In addition, they can provide a ‘reassurance card’ in the guest room which records the cleaning time and the temperature of the housekeeping employee.

2. Adjust the spatial layout

Shared spaces at homestay accommodations, such as meeting rooms and public balconies facilitate social interactions between guests and hosts. This kind of interaction allows guests to learn interesting things about the tourism destination, communicate with the host and other guests and contributes to a memorable travel experience. However, following the sudden outbreak of COVID-19, there has been significant growth in consumers' demand for social distancing. Although the homely feeling and social interactions are unique advantages of homestay accommodation compared with other lodging services, these features may run counter to the current needs of consumers due to COVID-19. Considering this, homestay businesses need to take measures to help guests enjoy social interactions while reducing the risks. For example, they may adjust the layout of public areas by increasing the interval between chairs and tables, using screens to divide public spaces, and allocating or limiting the usage time of public spaces.

3. Develop the surrounding markets

For safety reasons, consumers will be more cautious about taking long-distance trips at least in the short run. In addition, cross-provincial and cross-border tourism is not being encouraged by the government for the time being. As a result, short-distance trips become the main option for leisure travel. Focusing on the major target market which comprises independent travelers and families from nearby geographical locations, homestay businesses should adjust their marketing strategies.  For example, they may organize guided tours and family tours to help guests experience the local scenery and culture. In addition, some travelers may prefer to visit a niche destination to stay away from crowds.  Homestay businesses may provide ‘accommodation + local tourist guide’, ‘accommodation + transportation’ and other customized products to attract these consumers.

4. Leverage new marketing channels

Social media platforms, webcasts and TikTok videos have become popular channels for marketing promotions. Homestay businesses should increase brand awareness by sharing the homestay experience through live broadcasts. In addition, they can use WeChat public accounts and WeChat groups to demonstrate and showcase the accommodation features, which could increase the conversion rate at a relatively low cost.

5. Seek diversification

Diversification could enable homestay businesses to withstand risks and uncertainties. Specifically, the COVID-19 pandemic has made the public adopt a healthy lifestyle, which facilitates the development of rural tourism and ecotourism. Therefore, the rural homestay industry should launch experiential products that focus on meditation and returning to nature. For urban homestay businesses, launching long-term rental products might be an option for diversification. They may also share spare rooms and public spaces with other enterprises during the off-season, for instance by jointly creating a wedding venue.

6. Improve anti-virus measures

Because of the COVID-19 outbreak, prevention measures against the pandemic are necessary for the survival and development of lodging services, especially homestay businesses. Homestay operators and third-party booking platforms should collaborate to enhance anti-virus measures and continually check the health code of each guest to ensure the ongoing safety of the accommodation.

To summarize; during this challenging time, homestay businesses should create consumer-centered products and services, leverage digital marketing channels, seek diversification to develop the market and collaborate with third-party booking sites and the local government to address these challenges and achieve sustainable development.