Beijing has become the latest in a handful of Chinese cities to grant licenses to minsu (民宿, private guesthouses and bed-and-breakfasts), another step forward in clearing up an ambiguity in the hospitality industry that has been stymieing independent tourism and causing regulatory headaches.

Under the new “Beijing Municipal Tourism Regulations,” which went into effect on August 1, minsu are defined as private residences in urban and rural areas that accommodate tourists, and are “consistent with the local cultural environment, natural landscape, and ecological resources.” The city also intends to publish detailed guidelines for the licensing and management of minsu by next year.

Shanghai and Fujian province previously gave official recognition to minsu in 2016 (a few other cities, such as Hangzhou and Shenzhen, also recognize them in official “recommendations” or pilot projects in certain districts). Previously, the only business legally allowed to accommodate tourists was a binguan (宾馆, “hotel”), which typically required owners to go through rigorous licensing procedures for at least five basic permits—business, sanitation, revenue office, a special permit from local public security bureau (PSB), and fire safety—the last of which costs tens of thousands of RMB, with demands that are almost impossible for a typical Chinese residence to meet.

The rise of “independent tourism” (tourism independent of a travel agency or group) has led to various types of accommodation being offered outside the binguan system, many inside private homes—backpacker hostels, home and farmstays, and Airbnb-type short-term rentals. A 2016 study by travel website Mafengwo states that demand for such accommodation rose 500 percent from 2015 to 2016, though did not give a base figure. Rural officials also encourage minsu as a way to boost the local economy; some have even started offering properties rent-free to attract outside entrepreneurs (see cover story, page 32).

Nevertheless, the legal ambiguity meant that private guesthouses were never safe from crackdowns: In a previous investigation, three unlicensed hostel owners told TWOC that they face challenges registering guests with local police, while most hotels use a unified online system. Instead, they employ workarounds, such as keeping their own records (as in the case of one hostel accredited by YHA China) or simply “taking quality guests, not hanging up signs, not disturbing the neighbors,” and hoping for the best (as in one unlicensed hostel on Airbnb).

Recently one proprietor, who preferred to remain anonymous, told TWOC that some locations of his hostel chain have had to stop taking guests without a Chinese ID, as the local PSB deemed their record-keeping methods faulty. Though regulations banning foreigners from certain hotels were lifted in 2005, many of China’s smaller operations are still leery about accommodating them due to the extra hassle involved—part of officialdom’s persistent battle to keep tabs on the “floating population.”

These registration issues mean minsu and other private accommodations are periodically forced to close in migrant-heavy cities, such as Guangzhou, as well as prior to major international events, like the 2016 G20 Summit in Hangzhou, and BRICS Summit in Xiamen— though Xiamen authorities have denied any connection and claim they are also trying to come up regulations to standardize minsu.

Sixth Tone has reported, however, that business is already suffering in the popular tourist city. In Beijing, authorities are also hoping that by granting legal status to minsu, the tourism industry in its suburban and rural areas can attract a new, affluent class of travelers that increasingly demand “leisure and sightseeing,” according to Beijing Youth Daily.