Longji Rice Terraces 1 - Running a Guesthouse
Learning more about the economic challenges of running a guesthouse in a Chinese tourist zone
This essay is adapted from a Twitter thread first posted on August 18, 2021 (with some mild wording edits and content reorganization). This was the first essay I wrote about this guesthouse and its owner. A few days later, after more conversations with the owners of the family, I wrote a second essay that ended up getting quite a lot of attention and engagement on Twitter. I’ve compiled that thread into another essay in Part 2 here. This experience was my original catalyst for my current interest in China’s rural development planning, which is why I think it’s a good topic to revisit on the launch of this site.
Longji Rice Terraces is a scenic area in a rural and remote part of northern Guilin, in Southern China’s Guangxi Zhuang Autonomous Region. I have visited this area four times over the years, in 2011, 2016, 2020, and 2021. It remains my favorite scenic area in China.
Back in Longji Rice Terraces, I'd like to take a moment to share some more information about the people who own the guesthouse where I'm staying in this year. My intention is to make them and their lives a bit less abstract, the same as I did for my post last year about the guesthouse owner last year (here’s the post I had shared back in 2020):
This year, we stayed in a different guesthouse across the valley from where we stayed last year (in 2020). The owner of this one started taking guests back in 2009, shortly after the area was actually designated as a scenic area. At the time, the residents were all hosting tourists in their original weathered wood houses, but you don’t see much of those anymore. Here’s what they used to look like:
There are still a few of these first generation guesthouses around, although they probably aren’t that comfortable. You can get a room for 50-150 RMB per night there though. Compare to the newly-built guesthouses that cost 300-1000 RMB per night.
At the beginning, all the guesthouse owners wanted to have nice facilities, but money was scarce, so they had to buy the furniture one item at a time to decorate the houses…a TV here…a table there. One year someone installed AC in their guestrooms and then they ALL had to follow suit. I guess this is “keeping up with the Zhous”.
By 2019, this family had saved up enough for the down payment on the guesthouse that we’re staying in now. It’s 5 floors, and one of the most luxurious (and expensive) in town. To build it, they had to take out a bank loan for the unbelievable sum of 4 million RMB (which is about 600k USD). Their monthly payment is 20,000 RMB. I guess we can see why the room rates are so much higher now. We paid 450 RMB per night for our room.
Lower-interest loans are available from the rural credit collective, but it can only offer loans up to 50k RMB, which is not enough to build a guesthouse, so they had to borrow from a big bank in Guilin, which has not been sympathetic about their problems with reduced guestflow during Covid.
To add to this pain, just the regular operations of running a guesthouse in the remote mountains is expensive. For example, the power goes out easily when trees brush against power lines, but the owners want to have perfect reviews online, which means they can’t afford bad guest experiences due to power outages. For this reason, they decided to invest in a 40k RMB backup diesel generator that cost 3k RMB just to transport to their awkward location.
For day-to-day operations in the guesthouse, the husband and wife team handle most of the work for their 15 rooms, while the wife’s father tends to their rice fields and her mother leads the kitchen. There are other family members involved too, except for their 4-year old son, who spends all day watching TV in the lobby.
Guests can be difficult to please, especially when they come from big cities and are expecting to be treated like royalty, but the resources here are more limited. Fortunately, they have a beautifully designed space and provide attentive and thoughtful service, which is why they’ve managed to earn a 4.9/5 score on Ctrip, one of the highest in the village. And even now, while the booking rate for other guesthouses is suffering, their guest counts are pretty high. Last night almost all the rooms in the guesthouse were full, even though it seems like 75% of the places in the town have closed.
Even with the struggles of running the guesthouse, paying back the bank, dealing with annoying or rude tourists, etc., they still think the developments in the village have been a big win. After all, before 2003, they had no paved road to the village, no power, and had to hike 23 kilometers to town to buy things they couldn’t provide for themselves, like oil and salt. Now they have easy access to the outside world, and equally importantly for tourism, the outside world has access to them. They even have 5G cell phone service, which I had noted back in 2020.
With their efforts, I’m sure their young son will be inheriting a decent family fortune by the time he grows up. Just as I was inspired hearing the stories of the guesthouse boss from last year, I’m reminded again how much harder people have struggled to achieve their successes in life, and that I can always put in more effort too.
This is the first post about my 2021 Longji Rice Terraces trip. For the second post, where I talk about rural village development economics, click here.