Nathan Blecharczyk, co-founder and chief strategy officer of Airbnb Inc., speaks during a news conference in Tokyo, Japan, on Thursday, June 6, 2019.
Akio Kon | Bloomberg | Getty Images
Airbnb is closing its domestic business in China, in response to two sources aware of the matter. The corporate is planning to inform employees within the country as early as Tuesday morning in Beijing.
All mainland Chinese listings — homes and experiences — might be taken down by this summer.
Airbnb formally launched its mainland China business in 2016 and has faced mounting competition from domestic players. Sources say that the segment was already costly and sophisticated to operate. The pandemic worsened these issues and heightened their impact.
Despite in-country branding and putting Airbnb cofounder, Nathan Blecharczyk, at the top of efforts, stays in China on the platform have accounted for roughly 1% of revenue for the previous few years.
Sources say Chinese outbound travel has been a much bigger opportunity for Airbnb and the corporate will refocus on providing listings for Chinese travelers going abroad. One source says the overlap between Airbnb’s outbound and domestic businesses was not strong. Airbnb will maintain an office in Beijing with lots of of employees, in response to one source.
The corporate’s shares have fallen greater than 30% this 12 months amid a broader selloff in tech stocks, but it surely’s still trading well above its 2020 IPO price of $68. Airbnb struggled within the early days of the covid pandemic, shedding about 25% of its staff in May 2020, then went public in November of that 12 months. In its IPO prospectus, the corporate mentioned that hosts in China used a separate cleansing program to stop covid transmission than the uniform five-step cleansing process it implemented in the remainder of the world.
Business has recovered as people began traveling again, and the corporate has seen an uptick in long-term rentals this 12 months because of the flexible work arrangements many employers rolled out throughout the pandemic. Nevertheless, the Chinese business has been much slower to recuperate, because the country has periodically locked right down to fight subsequent waves of infection.
Airbnb declined to comment.