Sources say Airbnb is closing its domestic business in China

Airbnb It is closing its domestic business in China, according to two sources familiar with the matter. The company plans to inform employees in the country as early as Tuesday morning in Beijing.

All listings on mainland China – Homes and Experiences – will be removed by summer.

Airbnb officially launched its business in China in 2016 and has faced increasing competition from local players. Sources say that operating this sector was already expensive and complicated. The pandemic has exacerbated these issues and increased their impact.

Despite in-country branding and putting Airbnb co-founder Nathan Pletcharczyk at the forefront of efforts, stay in China on the platform has captured nearly 1% of revenue in the past few years.

Sources say Chinese travel abroad has been a bigger opportunity for Airbnb and the company will refocus on providing listings for Chinese travelers who travel abroad. One source says the overlap between outgoing and domestic Airbnb companies hasn’t been strong. According to one source, Airbnb will maintain an office in Beijing with hundreds of employees.

The company’s shares are down more than 30% this year amid a broader sell-off of 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, lay off about 25% of its employees in May 2020, and then it was released to the public in November of that year. In its initial public offering prospectus, the company stated that hosts in China used a separate cleaning program to prevent transmission of the coronavirus from the standard five-step cleaning process it has implemented in the rest of the world.

Business recovered as people started traveling again, and company has seen Long-term rentals increase this year Thanks to the flexible working arrangements that many employers have started during the pandemic. However, the recovery of Chinese business has been much slower, with the country periodically shutting down to combat subsequent waves of infections.

Airbnb declined to comment.