As former Guangzhou youth hostel owner narrated to his breathless audience of hostel-owning hopefuls on Douban.com, it took just one irate guest to end his hostel dream. The alleged loss of an iPhone morphed into the guest claiming to have lost 20,000 RMB and calling police, who promptly informed the owner, an early 20-something with the username “Dragon”, that he was operating without the proper licenses and ought to shut down immediately—with a barrage of verbal abuse and an overnight visit to the police station thrown in the bargain.
As Dragon found out later, his predecessor, the owner from whom he’d taken over the lease of the hostel some months earlier, had also been detained before. As he asked for advice from experienced members of the youth hostel and private guesthouse industry online, he didn’t encounter a single licensed establishment. An old-timer who claims to have been arrested several times told Dragon (and he repeated to his avid thread-subscribers), “If you haven’t been detained [by police], then you haven’t really owned a youth hotel.”
TBO, a trade journal of China’s travel industry, ran a report last week on the “bloody battle” over trademarks between international hosteling associations. In the process, TBO referred to China’s youth hostel market as a jianghu (“rivers and lakes”), the colorful setting of wuxia novels, a rough approximation to the “Wild West” in that both terms connote a world of zany risks, murky rules, and folks who live by their wits. It is an apt metaphor for the current state of China’s hostel industry, the problems of which can mostly be traced back to China’s business licensing and population control systems that have not quite caught up to the age of individualized, DIY travel.
As with many informal economies, there is little official data to refer to, and many hostel owners we contacted declined to comment directly on the issue. In this case, the word around the jianghu (as in hostel-owner communities on Douban, the online home of China’s “artistic youths”) corroborated by some interviews and earlier Chinese media reports on this issue are our best clues as to what is going on in this industry. What is undisputed is that China currently lacks regulations specifically written for hostels or, more accurately, minsu (民宿, “private lodgings”), which can also include pensions, guesthouses, bed-and-breakfasts, and short-term rental apartments (and AirBnB—which did not return our request for comment). In Taiwan, there are specific fire safety and sanitation standards tailored to minsu, which are defined as lodgings of five rooms or less. On the mainland, those wishing to operate minsu can only register their business as a hotel (宾馆) and must obtain the same licenses and meet standards similar to larger corporate establishments.
In other words there is no such thing, legally speaking, as a hostel. For those that do exist, unless they’ve met the legal definition and obtained the permits to operate as a hotel, all are technically illegal hotels. Last year, Guangzhou’s Yangcheng Evening News reported that, while the city’s tourism bureau imported the concept of youth hostels (青年旅舍) to Guangzhou in 1988, as of 2015 there were only two legal hostels in the whole city.
Unlike wuxia novels, where the law enforcement is either secretly sympathetic or inept, authorities can crack down at any time and the outlaws don’t usually triumph. Police in major cities—notably Guangzhou, Chengdu, and Xiamen—have been reported in the news for conducting sweeps of residential neighborhoods for unlicensed hostels, guesthouses (客栈), and “family-style inns” (家庭旅馆). Those who are found out are made to shut down immediately and evict all guests. Owners could also be fined 500 – 1000 RMB and arrested and detained for 5 – 15 days according to nation’s public security laws. Smaller towns and villages, especially those that depend on tourist money, do not appear to have frequent checks according to either the news or owners on Douban. There is also the fact that due to the high cost of rentals, especially for commercial spaces, hostels in major cities are statistically likelier to be located in residential buildings, which are almost impossible to certify as hotels under the current system.
Though requirements of each application vary by city, there are five permits that hotels must obtain in order to be considered legal. These are a business permit from the local office of commerce, a fire safety permit, a sanitation permit, a record at the local revenue office, and a special permit to operate a hotel business from the local public security bureau. In areas near designated environmental conservation areas, or autonomous regions of ethnic minority groups, they may also need to get a permit for land use and a certificate for environmental protection. The business permits, tax revenue, and sanitation processes appear straightforward. Fire safety, however, appears to be the sticking point for most of the community; not only can the permit cost tens of thousands of RMB to obtain, most residential units and even some mixed-use spaces don’t meet the basic standard of having two entries/exits to the premises.
The police permit is the other area that gets many hostel owners in trouble, along with some of their guests. Chinese regulations ask that all hotel guests (and not just foreigners) register at the local police station within 24 hours of arrival, which legal hotels will do for you at check-in. This rule stems from China’s notoriously archaic household registration system (hukou), which essentially ties a person’s citizenship to their place of residence. Implemented in the 1950s to keep the rural population away from cities and sustain collectivization policies, the hukou system was relaxed in the 1980s and created a “floating population” of people living away from their registered area. Mostly comprising migrant workers, the floating population is seen as a source of crime and potential social unrest, and hotel registration is part of a wider policy of control of the population living away from their hukou. The need to register hotel guests with police was also brought up in China’s new anti-terrorism legislation that was enacted at the start of 2016.
The founder of one a Sichuan-based hostel network in China, who did not wish to have his name or the name of his business mentioned, assured us that his company instructs their franchisees obtain the police permit in order to register their guests legally. The staff at one of Beijing’s legal hostels under the Hotelling International (HI) network, who also didn’t want to share their name or exact location, mentioned that while they do not automatically pass guests’ registration to the local police, they keep internal records of the guest’s information as well as once-every-two-hour reports that all is well on premises, crime and safety-wise, for the police to look at when they come for an inspection.
Without having gone through legal channels, many hostels find themselves surviving more or less one day at a time: a single lost item on the premises, or just a neighbor who complains, could bring the police. Douban users who replied to Dragon’s story chimed in with their own tales of unruly guests, some of whom threatened to turn the owner in for illegal hotel operations in order to obtain refunds or compensation for lost items. The advice from experienced owners on the forum, as well as advice from hostel owners interviewed by one Shijiazhuang newspaper back in 2015, were all the same: keep your head down, try to negotiate with the guest, and prepare to part with at least some money if it means not involving the authorities.
The economy of the jianghu, of course, is usually more than a match for the regulations and random police check-ups. The Yangcheng Evening News, following police raids in a residential community in Guangzhou that hosted 13 unregistered hostels, quoted an ordinary resident who complained that most of the hostel owners simply moved all the furniture back in after the police left and continued to receive guests. Reportedly, strategies for evading the authorities include not hanging a sign on the business and not giving detailed directions to the guests, who are asked to call from the train station, bus stop, or the front gate to be picked up and taken to the premises (also said to be a way to protect the privacy of the neighbors). The Shijiazhuang owners interviewed by the local Yanzhao Evening News also recommend dressing up the premises to look like an ordinary residence, or, in cases where there are obviously 10 bunk beds in one room, claiming that the unit is a dormitory for the workers of a company. One might readily wonder why it’s supposed to be better to cram 20 workers, as opposed to 20 travelers, in one non-fire-safe room.
Owners on Douban—mostly in resort towns—who claim to have never had real trouble with the authorities attribute their success from advance warnings of planned raids they or other area hostels receive from contacts within the local police department. These warnings are passed by word of mouth and allow the owners to plan to either close down for a few days or get their story straight. It’s also sometimes possible to predict when a raid might happen based on what is going on politically in China or a particular city at the time; many illegal hostels in Hangzhou, for instance, were raided this past spring due to tightening law enforcement in advance of the G20 summit. Following Xi Jinping’s 2015 visit to Dali, Yunnan, during which he made statements about the importance of protecting the local environment, local authorities also planned a number of new permits and “protection fees” (of the environmental kind) required for owners to register their business—all in the name of conservation, though it’s unclear if any of those plans ended up going forward.
Considering the risks associated with hostel-ownership, why do people still choose to operate them? Many hostel owners in the Douban community are young college graduates of the “post-85” or “post-90s” generation, just a few months removed having been a backpacker themselves and not quite ready to settle down to an office job. Having found hostels to be a cheap way to see the country as well as socialize, they describe owning a hostel as a way to preserve the ideals of youth, realize the dream of being an independent business owner, and (for some) live in a beautiful location where they would not otherwise find work. For those in the cities, taking in hostel guests lets you live in a nice apartment in a central neighborhood, splurge on your favorite IKEA furniture, and actually make your rent back with some extra to live on.
However, the prevalence of hostels around the country and their growing acceptance as a means of travel, especially among youth, often means that young, first-time owners like Dragon, may not even be aware of the true difficulty of getting a license and the risk associated with operating illegally. The website of YHA China, the Chinese HI chapter, has a special page on “misconceptions about youth hostels” that explicitly dissuades youths from the idea that owning a hostel as a “free, romantic lifestyle where one is one’s own boss and has no responsibilities or obligations.”
Sharle (pronounced like “Shirley”), the owner of a hostel converted from two two-bedroom apartments in a Beijing residential complex, actually got into the hostel business after working in offices for four years. She was also attracted by the freedom of her new profession and the carefree backpacker lifestyle. “I like to practice English with foreign guests, and I meet lots of people,” she told TWOC. “And if there are not many guests some days and nobody is checking out, I can sleep in in the mornings, do my own things in the afternoons, and even have time to travel to other cities.”
Sharle said she has heard of hostel owners being arrested in other cities, but is not too worried. In her view, it’s less about the paperwork, but the idea that a business generally gets to live and let live if it is honest, keeps a low profile, and welcomes “quality” guests that won’t cause incidents or disturb the neighbors.
“I run a nice place and don’t try to be greedy, not like some hostels that would put beds in every free space like the living room and even the kitchen,” she said. “I also try to screen my guests and communicate the rules clearly. I tell them they are responsible for their belongings, and make sure they don’t disturb the neighbors.” There are no signs for her business anywhere in the community, which she said was because she does not want the neighbors to worry about their safety.
Things are (very) slowly starting to change. Since 2011, Sichuan Province has held hearings and drafted legislation attempting to legalize “family-style hotels,” with the recognition (according to sources quoted by local papers) that these establishments “result from tourism periods where the demand outstrips supply” and fulfill several requirements of today’s travelers, such as low prices, flexibility, and a feeling of “home away from home”. The founder of the Sichuan-based hostel network also told us, though this is unconfirmed, that there are talks of giving tax exemptions to the nation’s smallest hostels. And as AirBnB embarks on its plan to expand its presence in China, it’s possible that much like with the saga of Uber, we’ll start to see more conversation, for better or worse, on whether there is a place for the so-called modern “sharing economy” in today’s China.
Cover image from Yododo