The statement was made in a letter sent to Chinese users via the company’s official WeChat account, according to Reuters, with no explanation for the move. According to the San Francisco-based business, Chinese customers would still be able to book listings and experiences overseas.
“We have made the difficult decision to refocus our efforts in China on outbound travel and suspend our homes and Experiences of Hosts in China, starting from July 30, 2022,” Nathan Blecharczyk, co-founder of Airbnb, wrote in the letter.
Airbnb follows a long list of Western companies that have withdrawn from China, including Linkedin and Yahoo, as an indication of the internet’s separation from the world’s second-largest economy.
Mostly all big Western digital platforms, including Alphabet Inc’s Google and Meta Platforms Inc’s Facebook, have stopped providing services to end-users in mainland China, claiming reasons ranging from censorship to operational issues.
According to the New York Times, as part of its retreat, Airbnb would erase around 150,000 listings in China, out of a total of six million worldwide.
Airbnb will have a major presence in Beijing, as per the Financial Times, but it will only deal with outbound tourism – the lucrative industry of enabling journeys abroad.
According to World Tourism Organization figures, Chinese visitors spend far more money on foreign travel than those from any other country, accounting for $255 billion in 2019, compared to $135 billion for Americans.
Airbnb has recorded around 25 million stays in China since commencing its operations on the Chinese mainland in 2016. Bookings within the nation — including foreigners visiting China — have typically accounted for approximately 1% of Airbnb’s total earnings, according to Financial Times.
Airbnb’s exit came amid years of efforts to expand its operations in the country. In 2017, it rebranded as “Aibiying” in China in an attempt to compete with domestic players Tujia and Xiaozhu.
Airbnb had previously attempted to purchase Xiaozhu in 2016, according to Financial Times, but the deal fell through. The move was yet another example of a major Silicon Valley business struggling to flourish in China, which is viewed as a significant growth prospect despite operational challenges and a competitive market. Tujia and Xiaozhu are Airbnb’s primary Chinese competitors.
While Airbnb has become more popular among Chinese visitors travelling abroad, domestic travellers have traditionally relied on local operators. According to a University of Queensland report published last year, Chinese enterprises were typically more trustworthy.
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“Unlike most other countries around the world, China has not embraced Airbnb,” the report concluded. Citing market data from 2020, the report said Airbnb had about 150,000 properties on offer in China, compared with about 1.2mn from market leader Tujia.
The report further said Airbnb faced “uncertain loyalty of hosts and guests and a crisis of confidence among hosts in the future of Airbnb China”.
The company’s activity in China has also been a subject of controversy, according to Financial Times. Sean Joyce, a former FBI deputy director, resigned as the company’s chief trust officer six months into his job in 2020, apparently due to worries regarding data-sharing. Airbnb stated that it has been transparent with users about what information was shared with Chinese authorities.
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The firm has profited from the worldwide reopening and move to remote working following the pandemic, with longer-term reservations — those lasting more than a month — becoming more typical than before the Covid19.
But, tourism in the Asia-Pacific area has not recovered as quickly as it has in other markets. According to a recent filing by Airbnb, record Covid-19 cases and extreme lockdowns in China compounded the regional slowdown in the first quarter of 2022.
Airbnb, which was founded in 2008, began offering services in mainland China in 2016. It had attempted to localise its services by connecting with Chinese networks such as Tencent Holdings’ WeChat.