The continuing lockdowns in major Chinese destinations caused by the Covid-19 pandemic are forcing vacation rental firm Airbnb to move out of China.
According to a CNBC report, Airbnb is shutting down its domestic operations in China with employees across the nation to be informed as early as Tuesday morning in Beijing about the decision to remove all mainland Chinese listings, including residences and experiences by mid-summer.
The San Francisco-based company which has operated in China since 2016, will be removing over 150,000 listings in the country, the New York Times reported.
The report claimed revenue from stays in China accounted only for 1% of Airbnb’s total business in previous years. Some 25 million guests have booked stays there through the online home rental company since then.
In 2017, Airbnb rebranded its Chinese business Aibiying, which means to welcome each other with affection and a simpler name to say for Mandarin speakers, as part of its expansion strategy.
In an earlier announcement this month, Airbnb Co-Founder and CEO Brian Chesky disclosed a good recovery for the rental business.
“The first quarter of 2022 was another record quarter for Airbnb. Guests are continuing to travel domestically and to rural destinations, and now, guests are also returning to cities and crossing borders at or above pre-pandemic levels. Airbnb is stronger than ever before,” Chesky said.
“People are getting more confidence in booking travel longer in advance, with lead times approaching 2019 levels before the end of the first quarter. Looking ahead, we expect solid, long-term demand. We have 30% more nights booked for the summer travel season as of the end of April 2022 than at the same time in 2019, and the rise from 2019 is much higher if we go farther out this year.”
However, compared to other destinations like North America and Europe, business in China has been slow to recover since 2020 due to numerous lockdowns to fight COVID-19 infection rates while other local competitors have also emerged like Trip.com.
China has had some of the toughest Covid restrictions in the world, making travel into and around the country extremely difficult.
During the height of the pandemic, China saw approximately 2.88 billion domestic tourist trips in 2020, a 52.1 percent year-on-year slump, says a report from the Ministry of Culture and Tourism.
Airbnb’s China division, according to sources interviewed by CNBC, the Chinese business became too hard and expensive to run, especially in light of the pandemic. A slew of local rivals made it difficult for Uber to develop an advantage, similar to what happened in China.
In its 2022 first-quarter financial report, Airbnb reported earnings of $1.5 billion which grew 70% year-over-year. It also exceeded pre-pandemic revenue by 80%. The strong revenue growth was driven by the combination of growth in Nights and Experiences Booked despite the ongoing pandemic, the war in Ukraine, and other macroeconomic headwinds.
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