Revitalizing rural life: unveiling homestay's economic power through eastern China's green revival practice

Amid a plethora of endeavors for rural revitalization, we discovered the powerful economic potentials of the homestay sector.

In East China’s Zhejiang Province, thanks to the decades-long Green Rural Revival Program, the countryside gets a new lease of life. Mesmerizing natural landscape proves to be a perfect cradle for eco-tourism businesses. One of the emerging business models is homestay services.

Homestay in the countryside goes far beyond offering a spiritual refuge for city dwellers. It engages the local community in eco-friendly and sustainable business practices with economic benefits.

Urban-Rural Partnership

You can catch a glimpse of the promising homestay economy in Moganshan, a tranquil retreat nestled in the heartland of the prosperous Yangtze River Delta. This "Hamptons of China" has attracted many urban, even overseas adventurers with the cash to flock in. Homestay business, though an imported concept, has been fittingly localized, boosting local innovation and the flow of funds, talents, and ideas.

Around a decade ago, a number of foreign expatriates working and living in the Yangtze River Delta came following their predecessors’ footprints for an ideal summer escape. They redecorated hundreds of European-style villas and created the first high-end homestay accommodations in China, which soon became all the rage.

The commercial success of expats’ homes had positive spillover effects on the local community. The recipe for turning “green” into “gold” inspired the local residents to emulate.

Shen Jiangrong is a migrant worker returning to Mount Mogan, now an entrepreneur managing “Mofan Homestay” and deputy president of the local association of the homestay service industry.

“Moganshan has a limited carrying capacity for tourism. There are two reservoirs here, one supplying drinking water to the county, and the other to the city. We, therefore, prioritize environmental protection as we try to develop the homestay business upstream from the reservoir. We need quality and sustainable development, even if it means fewer tourists, ”he said.

According to Shen, it was the foreigners who introduced the principle that highlights design, service quality, and business concepts of homestay. Returning from big cities, many migrant workers like him learned from them to start our own businesses.

Thanks to the returning residents, homestay has evolved from a practice of life aesthetics to a widely replicable business model. Indeed, local villagers have limited knowledge about hotel management and hospitality. They found it difficult to transform unused village housing into homestay hotels ready for the market, let alone strike a delicate balance between pricing and service quality, which is essential to business sustainability. Returning residents, however, have local resources, hometown attachment as well as some urban entrepreneurial experience. They’ve played an indispensable leading role and are a great example of urban-rural partnership.

Leading homestay service providers have formed some industry associations. Regulations and instructions are given to ensure the accommodations meet accepted standards. Training in hospitality and basic guiding skills are offered to prepare host families for their role.

“We often provide training sessions. Trainees can then become qualified homestay managers. Many skilled workers are good at communicating with customers and responding to their needs so that visitors can feel at home,” Shen introduced.

Shen Jiangrong's success in running a homestay business has caught many people’s attention. Some who’d previously been seeking opportunities in big cities like him also came back to their hometown. They then started homestay businesses with their available resources.

“We should avoid just imitating the expats. It’s necessary to innovate. We try to preserve the quintessential elements of the countryside. It’s also important to protect the environment to develop the homestay sector sustainably. Homestay business depends on the appeal of the surrounding environment,” he said.

Among all 166 homestay businesses in the village, 30 are built with investments from outside Moganshan. The rest are owned by locals. This might embody the way how homestays should reflect the essence of 'home' – operated by local community members, fostering interaction with customers, and creating a genuine sense of belonging.

Joining Forces for a Bigger Pie

When more and more villagers have taken part to build their own homestay businesses, will high community involvement lead to price wars and unfair competition?

In Qingshandian Village, homestay businesses are agglomerating near water. Villagers are encouraged to tap into the sightseeing market, with instructions considering its potential and mechanism. Homestay service providers seek to make the best of their personal strengths to find their market niches. This means diversifying the homestay experience to target different market segments, achieving economy of scale by appealing to a large number of visitors.

“I dreamed of building a house that would embrace water,” said Kong Xiangchun.

Kong is an architect from Shanghai. He turned his vision into reality in Qingshandian Village and started a homestay business.

“As the village upgrades its environment and economy, it enables incoming investors like us to fulfill our dreams and prove our worth," Kong said.

Kong has a deep feeling for the tranquil nature of the village. "This fishing village is a paradise hidden in the hills. On rainy days, it’s enveloped in fascinating patches of fog. In spring, it’s soaked with pleasant floral fragrance. When a breeze comes up, it brings an intoxicating smell of flowers. In the morning, as you open the door and walk onto the balcony, a fresh breath of air will fill you with energy,” he described.

“We homestay operators are in the same boat. I’ve been growing my business together with other owners. For example, my homestay focuses on high-end lodging, and villagers and local restaurants focus on catering services. Their accommodation might not be as good, but they excel at food options,” Kong explained.

According to Kong, homestay owners are mutually acquainted. Homestay owners joined forces to operate. Kong gave us a simple example. When some senior visitors prefer all-inclusive services at a lower price, he would recommend homestay hotels within the local community that match their needs to them. Similarly, other homestay managers would also recommend Kong's services when they meet customers who want to spend a bit more.

"We complement each other like brothers and refrain from begrudging each other for achieving success. If I run at capacity, I’d be glad to let others accommodate the visitors,” Kong concluded.

Tourism Empowers Agriculture

When rural areas see a booming tourism sector, it doesn’t necessarily lead to lower agricultural productivity.

Longmen Mijing, a gigantic tourism cluster, has integrated tourist attractions, local customs, homestay, farm produce, etc. It spreads the benefits throughout the value chain by recruiting different local providers for accommodation, catering, and special local produces.

Lou Min is the manager of the Village Sightseeing Area in Longmen Mijing.

“Our sightseeing area is accessible to the outside via Dayu Line only. The government invested a lot in building this line, developing facilities like parking lots, and renovating buildings. The improved facilities enable us to attract tourists. We then provide accommodation and catering for visitors in our unused housing,” she introduced.

Lou Min said many visitors shared their awe with the villagers of the mesmerizing natural beauty here. They’re also very keen on fresh produces and tea, which nurtured a business idea.

“We turned many local specialties like sauce into commodities. Like the pastries we saw on the street, some products used to be exclusive local festival offerings. Now they can also be sold to tourists, bringing in extra income for our people. Our village also abounds in crops such as tea and bamboo shoots. Locals used to gather some as daily vegetables and leave the rest on the hills unharvested and wasted. Now these crops are hankered-after produce,” she explained.

Lou Min said proudly, “We have many hard-working people who used to face financial difficulties relying solely on farming. But now they can make tens or even hundreds of thousands by harvesting bamboo shoots, tea, and other crops.”

The conventional thinking of addressing rural issues follows a top-down or outside-in approach. But in Zhejiang, it's a different story. Many individuals blaze a trail making use of the natural landscape and business environment the government has created. Their stories demonstrate that ecological conservation is always a prerequisite and essential element to rural development. People can benefit from the interactions between cities and villages, the coordination between the market and the government, and the harmony between individuals. These lie at the heart of revitalizing rural areas. Developing rural areas must go beyond tourism. Tourism doesn’t have to be the only answer. As the thriving villages attest, Zhejiang has offered us a shining example of balancing development between cities and villages and coordinating ecological conservation and economic growth.