Nathan Blecharczyk, co-founder and chief strategy officer of Airbnb Inc., speaks during a press conference in Tokyo, Japan, Thursday, June 6, 2019.
Akio Kon | Bloomberg | Getty Images
Airbnb is closing its domestic operations in China, according to two sources familiar with the matter. The company plans to notify employees nationwide as early as Tuesday morning in Beijing.
All listings in mainland China – homes and experiences – will be removed by this summer.
Airbnb officially launched its business in mainland China in 2016 and faced increasing competition from domestic players. Sources say the segment was already expensive and complex to operate. The pandemic has compounded these problems and increased their impact.
Despite the branding in the country and putting Airbnb co-founder Nathan Blecharczyk at the helm of the effort, stays in China on the platform have accounted for about 1% of revenue in recent years.
Sources say outbound travel to China has been a bigger opportunity for Airbnb and the company will refocus on providing listings to Chinese travelers going abroad. A source says the overlap between Airbnb’s outbound and domestic business was not strong. Airbnb will maintain an office in Beijing with hundreds of employees, a source said.
The company’s shares have fallen more than 30% this year amid a sell-off in tech stocks, but it’s still trading well above its 2020 IPO price of $68. Airbnb struggled at the onset of the covid pandemic, laying off around 25% of its staff in May 2020, then going public in November of the same year. In its IPO prospectus, the company mentioned that hosts in China use a separate cleaning program to prevent covid transmission than the uniform five-step cleaning process it has implemented in the rest of the world.
Business has picked up as people have started to travel again, and the company has seen an increase in long-term rentals this year thanks to the flexible working arrangements that many employers have implemented during the pandemic. However, Chinese business has been much slower to recover, as the country has periodically locked down to fight subsequent waves of infection.
Airbnb declined to comment.
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