The cozy interiors of some of the bed-and-breakfast facilities in Shanghai.[Gao ErqiangI/China Daily]

Covey says his Shanghai neighbors told him a blurry line had formed between public and private spaces over time because rooms in the old communities were simple and very small, and three or four households usually have to share a single kitchen and a washroom in two- and three-story shikumen houses.

Covey was fortunate to have his own washroom in the B&B establishment, because most of the operators, who are often young, experienced travelers who have been educated overseas, rent the houses and renovate them to combine one of the old Shanghai flavor and modern elements, and furnish each with appliances and furniture.

One operator is Jiang Yuan. He rented a 40-square-meter apartment on the first floor of a three-story shikumen house a year ago, spent about 140,000 yuan ($22,000) sprucing up the interior and installed furniture and electric appliances. He now charges 800 yuan a day for the accommodation, which is listed on Airbnb.

His simple abode stands out from modern hotels with its old world charm, and that is the big selling point, he says.

"Hotel rooms, no matter how fancy they are, all seem much the same once you've shut the door behind you."