Airbnb ditches China as it focuses on overseas travel
Airbnb will close its domestic operations in China this year, removing all listings by summer and pulling out after a years-long campaign to crack the tough market.
A source close to the company’s plans confirmed that Airbnb will continue to run a large office in Beijing, but will now exclusively deal with overseas travel – the lucrative business of facilitating overseas travel. ‘foreign.
Chinese tourists spend far more money on international travel than any other country, according to statistics from the UN’s World Tourism Organization, which said its tourists accounted for 255 billion in 2019, up from 135 billions of dollars for those in the United States.
Since launching its activity on the Chinese mainland in 2016, Airbnb has recorded approximately 25 million stays in the country. Domestic bookings — including foreigners traveling to China — have typically accounted for about 1% of Airbnb’s overall revenue, the person said.
Airbnb employees in the country, who total several hundred, would be notified of the move shortly, the source said.
The decision was first reported by CNBC. An Airbnb spokesperson declined to comment.
Airbnb’s retirement comes despite years of efforts to grow its business in the country. In 2017, he rebranded himself in China as “Aibiying” in an ill-fated effort to rival local players Tujia and Xiaozhu.
Airbnb previously had talks to acquire Xiaozhu in 2016, but no deal materialized.
The move marks another case of failure for a major group in China’s Silicon Valley, which is seen as a great growth opportunity despite operational complications and a tough competitive landscape.
Last October, Microsoft’s LinkedIn dropped out of the market, citing a difficult operating environment. In 2016, Uber staged a humiliating retreat, selling its Chinese operations to rival Didi-Chuxing after failing to blitz the market in the same way it has done in Western economies.
While Airbnb has been popular with outbound Chinese travelers, domestic travelers have more often turned to local players. Chinese companies were generally more reliable, 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.
Citing market data from 2020, the report said Airbnb offers around 150,000 properties in China, compared to around 1.2 million for market leader Tujia. Looking ahead, the report said Airbnb faces “uncertain loyalty from hosts and guests, and a crisis of confidence among hosts in Airbnb China’s future.”
Airbnb’s presence in China had also been the source of some controversy. In 2020, the company’s then “trustee” Sean Joyce, a former deputy director of the FBI, resigned six months after taking office, would have on concerns about data sharing in China. Airbnb said it has been candid with users about data shared with authorities.
Airbnb completed the largest U.S. initial public offering of 2020, capping a remarkable turnaround after the travel crisis linked to the coronavirus pandemic put its financial health at risk until it instituted a series of reductions, including the reduction of marketing expenses and headcount.
Since then, the business has benefited from the global reopening and shift to remote working, with longer-term bookings – lasting over a month – now more common than before the pandemic.
However, travel in the Asia-Pacific region has not rebounded with the same enthusiasm as other markets. In the first quarter of 2022, record Covid-19 cases and severe lockdowns in China exacerbated the regional slowdown, Airbnb said in a recent filing.