Airbnb is closing its domestic business in China, according to two sources familiar with the matter. The company is planning to tell employees in the country as early as Tuesday morning in Beijing.
All mainland Chinese listings — homes and experiences — will 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 complex to operate. The pandemic worsened these issues and heightened their impact.
Despite in-country branding and putting Airbnb cofounder, Nathan Blecharczyk, at the head of efforts, stays in China on the platform have accounted for approximately 1% of revenue for the last few years.
Sources say Chinese outbound travel has been a bigger opportunity for Airbnb and the company 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 hundreds of employees, according to one source.
The company’s shares have fallen more than 30% this year amid a broader selloff in tech stocks, but it’s still trading well above its 2020 IPO price of $68. Airbnb struggled in the early days of the covid pandemic, laying off about 25% of its staff in May 2020, then went public in November of that year. In its IPO prospectus, the company mentioned that hosts in China used a separate cleaning program to prevent covid transmission than the uniform five-step cleaning process it implemented in the rest of the world.
Business has recovered as people began traveling again, and the company has seen an uptick in long-term rentals this year thanks to the flexible work arrangements many employers rolled out during the pandemic. However, the Chinese business has been much slower to recover, as the country has periodically locked down to fight subsequent waves of infection.
Airbnb declined to comment.