As Chinese authorities double down on “zero-COVID” policies, Airbnb has decided to close down its business in China indefinitely, sources familiar with the matter told media outlets.
Their information as the U.S.-listed short-term housing giant on Tuesday, May 24, announced to its China-based users that it would cease accepting all bookings for accommodation in the country beginning July 30.
The ability to book rentals beyond July 29 was also suspended on Tuesday morning, according to screenshots of the Airbnb notice circulating across Chinese social media.
All mainland Chinese listings — about 150,000 homes and experiences — will be removed from its website by this summer.
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Airbnb formally launched its mainland China business in 2016 and has faced mounting competition from domestic players in its Asia market. Since its inauguration in China, about 25 million people have made bookings through the platform.
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According to one of the sources who confirmed the shutdown, Airbnb’s domestic business in China has been struggling as the segment was already costly and complex to operate. To compound that, the new outbreak has heightened this impact by cutting off demand and created an environment of growing ambivalence as companies do not know whether China intends to move towards loosening restrictions or reopening its borders anytime soon.
Since mid-March, authorities in China have enacted some of the strictest COVID measures in the world, with at least 31 cities in the country remaining under some degree of lockdown, movement curb, or travel restrictions.
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Stagnant for years
Despite a massive campaign to promote in-country branding and placing Airbnb co-founder, Nathan Blecharczyk, at the head of efforts, bookings in China have accounted for only about 1 percent of the platform’s revenue in the past few years.
Sources say Chinese outbound travel has been a bigger opportunity for Airbnb and the company will restructure to focus on providing listings for Chinese travelers traveling abroad. Between 2010 and 2019, the number of Chinese tourists traveling overseas had nearly tripled to 155 million before the COVID pandemic disrupted the global tourism industry.
The company’s shares have fallen more than 30 percent this year amid a broader selloff in tech stocks, but the housing app was still trading well above its 2020 IPO price of $68.
Airbnb struggled in the early days of the COVID-19 pandemic, deciding to lay off about 25 percent of its staff in May 2020. In its IPO prospectus, the company mentioned that hosts in China used an enhanced cleaning program to prevent transmission of the virus compared to its standard five-step cleaning process it has implemented for the rest of its global listings.
Airbnb’s Beijing office to remain open
Although the tourism industry has begun to recover as people resume travel, the company has said its Chinese business was much slower to recover as the country’s continued lockdowns, restrictions, and new waves of infections have greatly diminished consumer spending.
However, Airbnb did report an uptick in long-term rentals this year thanks to the flexible remote work arrangements many employers rolled out during the pandemic. The San Francisco-based company said that it will retain an office in Beijing, along with a few hundred employees to continue providing service for its Chinese customers traveling abroad and booking listings in other countries.
Airbnb did not respond to several requests for comment.