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US home rentals firm Airbnb is pulling out of mainland China, home to one of its least profitable markets, citing challenges brought about by the Covid-19 pandemic, it said in a note posted on its website on Tuesday.
The company, which has faced fierce local competition, said it will concentrate on serving the Chinese market by providing options for accommodation when Chinese people travel out of the country.
"In the face of the challenges of the epidemic, we reconsidered and made this difficult decision: Airbnb China will strengthen its base and focus on the outbound travel business, that is, from July 30, 2022, it will suspend support for domestic travel listings and experiences and related reservations," Nathan Blecharczyk, Airbnb co-founder and chief strategy officer, said in the note.
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"We cherish the Chinese market very much, and always believe that Chinese users, who account for one-fifth of the world's total population, are an indispensable part of our global network and even the realisation of the company's vision, creating cultural exchanges and emotional connections between people," he added.
The move is being viewed as the culmination of an ill-suited business model, local competition and Beijing's insistence on its zero-Covid policy, which has kept the country's borders shut to international tourists and hampered local tourism with routine lockdowns.
Airbnb has had to contend with intense competition from home-grown home-sharing platforms in China, such as Xiaozhou and Meituan Homestay. Xiaozhu launched Lanzu Gongzhe, which loosely translates as rental business community, in 2018.
Lanzu Gongzhe delivers a one-stop solution for homeowners running Airbnb-like businesses on the mainland. It offers a range of services that cover everything from decor design and security, such as the installation of so-called smart locks, to cleaning and day-to-day property management.
Other competitors such as Trip.com offer services such as transport ticketing and packaged tours as well.
"As for tourism in the Chinese mainland, the demand from domestic travellers remains strong," the company told the Post on Tuesday. "For instance, some users began to prepare for trips during the Dragon Boat Festival holiday right after the Labour Day [holiday]."