Airbnb shuts down its China business to focus on overseas travel in Asia

The San Francisco-based company will stop offering rental homes and experiences in the country this summer.

Airbnb Inc. is winding down its operations in China, choosing instead to focus on outbound Chinese tourism as the country continues its aggressive approach to containing Covid-19.

The San Francisco-based company will stop offering rental homes and experiences in the country this summer, according to a person familiar with the matter. But it will still maintain a presence in China with an office in Beijing, as the company expects outbound tourism to improve when restrictions are eased. Airbnb launched its operations in China in 2016, and the pandemic has added to the difficulties and complexities of operating within the country, the person said.

With rentals in China accounting for just 1% of Airbnb’s revenue, the company sees a greater opportunity in outbound tourism from China, particularly travel in the Asia-Pacific region.

“China is mostly an outbound business,” Airbnb CEO Brian Chesky said on the company’s first-quarter earnings call earlier this month. “People go to China, but they mainly travel to China and go to other communities, especially in Asia.”

At an event in New York in early May, Chesky said he expects the Asia region to bounce back in 2023.

zero approach-COVID

China has taken a zero covid approach to containing the virus, with the government shutting down entire cities for weeks. Several economists have cut their forecasts for China’s economic growth in recent days as government restrictions continue, hampering growth. Data last week showed China’s industrial production and consumer spending in April fell to the worst levels since the pandemic began, while the jobless rate rose to 6.1% and youth unemployment hit a record high. .

The zero-tolerance approach has drawn criticism from businesses, fueled public frustration and put Beijing’s ambitious annual growth target of around 5.5% more out of reach.

During the early days of the pandemic in early 2020, Airbnb suspended registrations on its listings in Beijing to comply with local regulations. In a regulatory filing in February, the company said it would continue to incur “significant expenses” to operate in China and may not be able to achieve profitability in the country.

“These factors, combined with workforce sentiment in China and China’s policy toward foreign direct investment, may particularly affect our operations in China,” according to the report. Airbnb cited other difficulties it has faced doing business in China, including being forced to respond to requests from government agencies to share information about users of its platform.

The company also said that “any prolonged deterioration in bilateral relations between the United States and China or an escalation of geopolitical risk in China could negatively affect” its business.

CNBC previously reported the news.