Airbnb is closing its business in mainland China this summer amid rising costs and domestic competition, CNBC reported. The online vacation rental platform was first launched in China in 2016, fueled by the enthusiasm of Chinese tourists who often use it during their trips abroad. But according to sources who spoke to CNBC, Airbnb’s Chinese segment was becoming too complex and expensive to operate, especially in light of the pandemic. As with Uber in China, a bevy of local competitors made it difficult for the US company to gain an edge. Stays in China have only accounted for one percent of the platform’s revenue in recent years.
While a growing number of cities have banned short-term rentals or passed restrictive laws, Airbnb’s fallout in China was due to entrenched competition and regulatory issues. Airbnb China operated differently from other Airbnb operations in other countries due to Chinese government restrictions. The company was forced to enter into agreements with local city authorities and store its data on government servers.
Another more recent obstacle for Airbnb has been an inconsistent flow of international and domestic visitors due to the pandemic, given China’s significant travel restrictions. While global tourism is recovering, the number of international tourists has still not returned to pre-pandemic levels, according to figures from the UN World Tourism Organization. The Chinese government has also limited the number of “unnecessary trips” for its citizens in light of a recent surge in COVID-19 viruses, which has reduced the number of potential domestic users for Airbnb.
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