China: Airbnb is set to shutter its domestic tourism business and experience listings in China in July as a result of the effects of the country’s lockdowns and restrictions, as part of its increasingly stringent zero-Covid strategy on domestic and international tourism.
The home-sharing platform’s co-founder and China chair, Nathan Blecharczyk, confirmed the news on Tuesday that Airbnb would cease to take bookings for accommodation and experiences from 30 July onwards, with Airbnb notices being displayed across social media and attempts to make bookings from outside of China being blocked.
Attributing the closure to “pandemic challenges”, Blecharczyk said that Airbnb China would instead “consolidate and focus on the outbound tourism business” after years of trying to establish itself in the previously lucrative Chinese market, however the company is planning to maintain its current office with “hundreds” of employees in Beijing, according to news outlet Phoenix News.
After launching in mainland China in 2016, Airbnb claims to have registered approximately 25 million stays in domestic listings across the country, with inbound tourism bookings reportedly accounting for around one per cent of the company’s overall revenue.
However, the costs to operate Airbnb’s Chinese business and strong competition from homegrown platforms such as Tujia, Xiaozhu and Ctrip have made it increasingly difficult to justify the company’s presence in China with little market share, and the Covid-19 pandemic has served to exacerbate those existing issues.
Despite a sustained push to increase its market share in China and rebranding to “Aibiying” to appeal to Chinese citizens in 2017, Airbnb has struggled to make headway and turn over profits in the country.
According to one University of Queensland report published last year, Airbnb had close to 150,000 units listed in China in 2020, compared to 1.2 million on Tujia alone.
Now that the world is starting to open up after the pandemic, Airbnb is reporting record high numbers of bookings [102 million accommodation and experiences bookings] in Q1 of this year, pointing to strong, long-term pent-up demand for travel. Contrast this with China where nationals are restricted from domestic and cross-border travel and foreign tourists are almost completely forbidden from entering the country, while there is no current indication towards a shift towards co-existing with Omicron and any further strains of the coronavirus.
The lack of outbound tourism from China is also having a significant impact on the global tourism industry, especially after the number of Chinese tourists venturing abroad rose by almost 300 per cent to 155 million between 2010 and 2019.
Chinese authorities have stated that they will “strictly limit” outbound travel by making it harder for citizens to obtain or renew passports, while anyone re-entering the country from abroad is required by law to quarantine in designated hotels for up to four weeks.
China’s zero-Covid strategy to eliminate the virus was labelled as “unsustainable” by the World Health Organization [WHO] earlier this month, and authorities have taken steps to silence the voices of the strategy’s detractors, including Trip.com co-founder James Liang, who has been banned from posting on social media platform Weibo after appearing to suggest that overly stringent pandemic prevention policies would inflict greater damage on the economy and life expectancies than the virus itself.
Airbnb’s relationship with China had become increasingly strained after former chief trust officer, and a previous FBI deputy director, Sean Joyce, resigned over reported data-sharing concerns. While Airbnb said that it had been transparent in what data it shared with Chinese authorities, police in China were beginning to warn hosts that home-sharing activity on Airbnb was illegal and in contravention of the government’s oversight of its citizens.
Meanwhile, Airbnb was urged to withdraw its support for the Beijing 2022 Winter Olympic Games by campaigners in China fighting for the rights of Uighur Muslims in the country, who are alleged to have been persecuted and detained in secret internment camps.
Airbnb now becomes the latest large Silicon Valley firm to pull out of the Chinese market, following on from Uber’s decision to sell its operations in the country to rival Didi Chuxing and LinkedIn’s departure in October 2021.