Airbnb has announced that it will be withdrawing from the Chinese market, following other companies who’ve made similar decisions. The vacation rental service says it plans on shutting down all of its listings and experiences in mainland China by July 30.
The Airbnb management announced its withdrawal from China via its official WeChat account but lacked any specific reasons for the decision. While they no longer manage listings in Chinese markets, Chinese users can still use their accounts to book abroad.
Airbnb co-founder Nathan Blecharczyk said in a statement, “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.”
The company’s exit was triggered by the costly operation costs and other restrictions being put on them. The company said it had no choice but to close down its domestic facilities in China due to the COVID-19 pandemic and other fiscal issues. The claim is corroborated by the information from a reliable source published in the Global Times.
Airbnb is yet to give an official comment on the matter.
Airbnb is the latest in the list of Western internet companies that have exited 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.
The COVID-19 pandemic is a major issue for many countries, but it’s been especially hard on China because of its continuing lockdown procedures and restrictions. These factors have caused foreign investors to consider withdrawing their investments from the country.
Airbnb’s retreat from China will not cause them much damage. The company is six million strong in the world, and its exit from the market only accounts for 1% of the revenue loss. However, it would also cost time 150,000 listings, which will hurt nonetheless.
The company opened its services to Chinese consumers back in 2015, seven years after it was founded in 2008. Airbnb partnered with WeChat to localize its services so it could compete with market rivals like Xiaozhu, Meituan, and Tuija.
The current global markets are volatile, and it affected the shares of the company. On Monday, Airbnb gained 0.7% on Nasdaq but has been subject to a 1.6% downswing in post-market trading.
Airbnb’s rival in China, Meituan, announced that it would help Airbnb hosts to pin listings on their platform via its vacation rental business. Another one of the company’s competitors, Tuija, made a similar statement as well.