Zero-Covid China gives Airbnb an excuse to check

Airbnb co-founder and CEO Brian Chesky speaks during an event to launch the brand’s Chinese name, in Shanghai, China March 22, 2017. REUTERS/Adam Jourdan – RC1F2C5A0E80

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LONDON, May 25 (Reuters Breakingviews) – Another foreign internet company has left China. The $68 billion Airbnb (ABNB.O) said on Tuesday it would shut down all rental listings and tours in the People’s Republic by the end of July, following similar retirements from Indian rival Oyo ( OYOH.NS) and compatriots like Microsoft (MSFT.O) LinkedIn. Pandemic challenges are one reason, but the vacation rental group has been struggling in the country for years.

China’s severe control of Covid-19 was probably the straw that broke the camel’s back. Shanghai, hit by Omicron, is only slowly letting its 26 million inhabitants return to normal life after two months of draconian shutdowns; Beijing, on the other hand, is quickly barricading itself. Domestic travel fell precipitously: During the five-day Labor Day holiday in early May, tourism revenue fell 43% from a year earlier, official data showed.

The financial hit to Airbnb, which will keep an office in China to focus on outbound tourists, will be minimal. Since entering the country in 2016, the company has failed to keep up with local rivals like Tujia. Revenue from stays in China accounted for only 1% of total revenue in recent years. As travel in other markets picks up, Airbnb’s late payment in China seems welcome. (By Yawen Chen)

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Editing by Robyn Mak and Katrina Hamlin

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