Airbnb is closing domestic operations in China, saying that the company will shift its focus to outbound travelers rather than those visiting China. It will still keep an office in Beijing to help facilitate that outbound travel market. The company also added that it’s planning to tell employees as early as Tuesday morning in Beijing.
The company launched its business in mainland China in 2016, but since rentals in China make up only about 1% of its revenue, it sees more opportunities for tourists traveling from China – specifically in the Asia-Pacific region. Some people have also cited domestic competition and high operating costs as reasons for the shift.
“China is primarily an outbound business,” Airbnb’s CEO Brian Chesky said earlier this month on the company’s first-quarter earnings call. “People go to China but primarily they travel to China and they go to other communities, especially around Asia.”
A February regulatory filing by the company said that it would be costly to continue operating in China, with a possibility it might not even be profitable to do so. “These factors, combined with sentiment of the workforce in China, and China’s policy towards foreign direct investment may particularly impact our operations in China,” read the report.