Image source: REUTERS
Airbnb is withdrawing from China, following other companies that have decided to leave the mainland market. The company announced via a press release that it would be shutting down all of its listings and experiences by July 30.
The Airbnb management announced its exit from China via its official WeChat account but did not provide any reasons for its decision. However, it’s still possible for Chinese users to book listings and experiences abroad.
“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,” Airbnb co-founder Nathan Blecharczyk said in a statement.
Airbnb had no choice but to shut down its domestic facilities in China due to the high operation costs and other restrictions, such as lockdowns due to the COVID-19 pandemic.
Accordingly, a reliable source published by Global Times said that Airbnb’s withdrawal from the Chinese market had been triggered primarily because of these two factors – one for the expensive cost of running local operations while another is for the economic ramifications of COVID-19.
The media is waiting for Airbnb’s official comment on the matter.
Airbnb is the latest in the line of Western internet companies that have withdrew from China due in part to the country’s decision on internet decoupling. While China is the second-largest economy, companies like LinkedIn and Yahoo still chose to retreat from the country.
Further, issues relating to censorship, operational hurdles, and others are what prompt many Western internet platforms to shut down their services in mainland China. Meta’s Facebook and Alphabet Inc’s Google have earlier said the same.
To add, businesses in China are feeling the effects of COVID-19, with major restrictions on trade and movement due to this pandemic. As such, some foreign businesses have reported that they may be withdrawing investment from the country.
Airbnb pulling out of China will cost them 150,000 listings – and about 1% of their total revenue. The company has six million users worldwide; as such, the exit won’t really hurt much for Airbnb as they continue exploring other areas to find a market with greater potential.
The company opened its services to Chinese consumers back in 2015, seven years after it was founded in 2008. Airbnb also localized services by partnering with WeChat, competing with market rivals Xiaozhu, Meituan, and Tuija.
Meanwhile, global markets continue their roller coaster ride, and the company’s shares are no exception. On Monday, Airbnb gained 0.7% on Nasdaq but decreased by 1.6% in post-market trading.
Airbnb’s rivals in China, Meituan and Tuija have announced that they will help Airbnb hosts to pin listings on their respective platforms.
Opinions expressed by CEO Weekly contributors are their own.