Airbnb abandons China as zero-Covid policy crushes tourism

Airbnb will close operations in China this summer after a years-long campaign to break into the market was strangled by the impact of Beijing’s tough zero-Covid strategy on domestic and international tourism.

The company’s co-founder and president of China, Nathan Blecharczyk, told hosts in the country that Airbnb would close its travel and domestic experiences listings by the end of July amid “pandemic challenges”.

“Airbnb China will consolidate and focus on the outbound tourism business,” he wrote in an open letter posted on the company’s WeChat account, adding that the company would retain its office in Beijing.

Airbnb has had about 25 million stays in the country since its launch in mainland China in 2016. Bookings – including foreigners traveling to China – have accounted for about 1% of Airbnb’s overall revenue, a person familiar with said of the company.

The company had made a concerted effort to expand in the country, rebranding in 2017 in China as “Aibiying” in order to compete with local operators such as Tujia and Xiaozhu. Blecharczyk had also made monthly trips to the country since taking over Airbnb’s China operations.

The company’s founders were attracted by the lure of Chinese tourists. Before the pandemic, they spent $255 billion on international travel in 2019, compared to $135 billion for Americans, according to the UN’s World Tourism Organization.

In 2020, Airbnb offered around 150,000 properties in China, compared to around 1.2 million for market leader Tujia, according to a University of Queensland report published last year. “Unlike most other countries in the world, China has not embraced Airbnb,” the report concludes.

But Airbnb has struggled to make a profit in China despite the push.

Larger domestic travel booking platforms such as Ctrip have also entered the home rental segment, marketing deals alongside hotel bookings.

The pandemic and Beijing strict zero-Covid policies have compounded Airbnb’s problems by severely restricting domestic and cross-border travel, with foreign tourists banned from entering the country.

“Everything is caused by the repeated episodes of the pandemic,” said a guesthouse owner named Xie, who used Airbnb to fill rooms. “Last year, the number of guests from Airbnb dropped. They were struggling. After all, they can’t compete with big platforms like Ctrip.

But the number of outbound Chinese tourists has also declined. Authorities have made it very difficult for citizens to obtain or renew passports and said this month that they would “strictly limit” foreign travel. Citizens returning to the country are required to quarantine in special hotels for up to four weeks.

Airbnb’s presence in China had also been the source of controversy. In 2020, then-corporate trustee Sean Joyce, a former FBI deputy director, resigned six months after taking office, reportedly over concerns about data sharing.

Airbnb said it had been candid with users about data shared with Chinese authorities, but noted in its annual report that compliance with Beijing’s policies could “have a significant negative impact on our brand”. [or] reputation”.

Vivian Wu, a former Airbnb host in Beijing, said she stopped having guests after local authorities stepped up scrutiny of the platform. “They wanted the guests to report to the police,” she said. “The police also called to tell me it was illegal.”

“The DNA of this type of business is completely contrary to the strict supervision required by the Chinese government,” she said. “The pandemic was just the straw that broke the camel’s back.”

The Airbnb decision was first reported by CNBC. An Airbnb spokesperson declined to comment.

Airbnb is the latest major Silicon Valley group to pull out of China.

Last October, Microsoft’s LinkedIn dropped out, citing a difficult operating environment. In 2016 ride-sharing group Uber left the country, selling its Chinese operations to rival Didi Chuxing after failing to dominate the market as it had in western economies.

Nian Liu contributed reporting from Beijing

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