Airbnb is reportedly set to shut down its domestic rentals in China, where the country’s “zero-Covid” policy has resulted in ongoing lockdowns.
All listings for homes and experiences in China will be removed from the US company’s website by the summer, a source familiar with the matter told the BBC.
Airbnb started operating in China in 2016, and some 25 million guests from around the world have booked stays there through the online home rental company. The company is now expected to instead turn its focus to Chinese residents travelling abroad to other destinations.
Prior to the emergence of Covid, Chinese travellers heading abroad had tripled in less than a decade – reaching 155 million journeys in 2019 – according to the UN World Tourism Organisation.
However, since 2020, China has enforced some of the strictest Covid restrictions in the world, leaving people confined to their homes and not even permitted to leave to buy groceries, with extreme food shortages reported.
Lockdowns, which have been described as mishandled and disastrous, have rendered travel to and from the country extremely problematic. Measures were escalated dramatically following the outbreak of Omicron earlier this year, with the restrictions mainly centred in Shanghai, which was locked down in late march.
The lockdowns have had a big impact on economic growth in China, with economic activity contracting sharply last month. New data shows that retail sales declined by 11.1 per cent year on year, impacted by lockdowns, which was a greater decline than forecasts by economists polled by Bloomberg had predicted.
The Financial Times reports that retail sales dropped in March, down 3.5 per cent year on year, and are expected to contract even further this month. Industrial production, which was expected to rise slightly, dropped 2.9 per cent. The slump in the country’s economic activity has been described by commentators as an indication of the rising economic toll from China’s approach to Covid, which it has sought to suppress through city-wide lockdowns, quarantine camps and mass testing.
President Xi Jinping has reaffirmed his commitment to his ‘zero-Covid’ strategy this year ahead of his bid for a third term as president.
Airbnb’s decision is also partly attributable to the home-sharing app’s struggle to compete with local operators, with the domestic segment costly and expensive to operate for the company, according to reports. China’s tough Covid-19 restrictions only worsened these issues and heightened their impact, a source told Barrons.
Stays in China have accounted for approximately 1% of the company’s overall revenue for the last few years. Shares in Airbnb have fallen by almost 32% so far this year, in line with other tech stocks, and stock was down 7% as of Tuesday 24th May.