The multi-billion-dollar home-sharing industry, which is transforming short-term rental markets around the globe, could soon be redefined by new competitors.
One of Airbnb’s biggest rivals, Xiaozhu, is in talks with investors for more than $200 million to take on the pioneering American home-sharing giant, Bloomberg reported. The company’s website lets users rent and host homes and apartments across China, just like Airbnb. Xiaozhu is reportedly targeting a valuation greater than the $1-billion mark it hit last year.
The news comes shortly after a $1-billion infusion into India’s Oyo Hotels, which plans to expand in China. Xiaozhu and another Chinese firm, Tujia.com, represent major competition for Oyo and Airbnb.
Chinese listings on Airbnb have grown more than 125 percent in the past year, and the number of Chinese guests doubled in 2017, Airbnb said in July. Xiaozhu also said that month that it had 35 million users with over 420,000 listings in 652 cities.
The home-sharing platforms have been controversial throughout America, where lawmakers struggle to monitor the exploding industry. In New York City, Airbnb complaints reached record highs in May, and critics say the service has caused rents to rise.
On the West Coast, listings are tumbling in places like Santa Monica and West Hollywood, which has enacted restrictions on the industry. In response, Airbnb has sued Santa Monica. The company has netted $31 million since the ordinance took effect, but it is nearing the end of it options to keep that lawsuit alive. [Bloomberg]–Gregory Cornfield