Airbnb locked in trust crisis in China

The U.S. short-term accommodation rental company Airbnb has bumped into new problems in China as it inches its way into the gigantic market.

On Dec. 29, Airbnb user Mr. Qi told Beijing Business Today, a local newspaper, that the lodgings he booked in Osaka, Japan on the platform had been cancelled by the host unilaterally just two days before his trip.

With a full refund and an additional compensation of 10 percent of the room rate, Lin accepted the deal and booked another place on Airbnb only to have found out that the room was again dissatisfactory.

"It promised to be equipped with heating and air-conditioning but we found out that the room was too cold to stay in," Lin recounted his unhappy experience. He hoped to cancel the booking but was declined and only got a day's refund after multiple negotiations.

This comes after another unhappy encounter of an Airbnb host who complained on her twitter-like Weibo account that a college student from Shanghai had ruined her apartment after a stay, during which the student had used the property as a set to shoot videos.

A series of negative news has locked the home-sharing website on a "trust crisis", which is edging itself into China's market and eyeing to get a slice of the cake amid the tourism boom accompanied by the rise of the country's middle class. According to a research report published last July by internet consultancy Sootoo, the size of the home sharing market is expected to top 30 billion yuan (US$4.3 billion) in 2016, up from 10 billion yuan in 2015.

As a peer-to-peer room rental platform, it should operate based on a rule that can serve the interests of both the guests and the hosts, said Shen Zhiqiang, CEO of Mayi, a domestic room rental service.

Observers say the "trust crisis" that Airbnb is locked in reflects the lack of regulation and supervision for foreign ventures in China, and they need to do more to adapt to industrial and consumption concepts of a new market.

For all the problems occurring in the fledging home-sharing industry, Shen suggests a more specific credit rating system and disputes settlement mechanism for both guests and hosts.

It also needs to check on its housing information to guarantee consumers' rights and restore public trust, which, in Shen's words, "may not happen in a short period of time."

Established in 2008, Airbnb created the accommodation-sharing business model that became popular across the world. It launched Airbnb China last October to ride the wave of the country's booming share-economy and take on a handful of Chinese rivals in the industry.