Will Airbnb return to China? – Fortune China

Almost 10 years after its founding, Airbnb cautiously entered China in 2016, when it was already a fully fledged shared accommodation platform and the number one listing provider in the global travel market. After six years of operation, Airbnb has made a choice about its future in the Chinese market.

This week, Airbnb announced that starting from July 30, it will suspend support for domestic travel listings, experiences and related reservations in China, and all listings in mainland China will also be removed from the shelves at the same time. Since the morning of May 24, when the news was announced, Airbnb’s official channels have been unable to book properties in mainland China after July 29.

“Pause” is just a euphemism, “exit” is the core fact. People lamented that Airbnb, like LinkedIn, entered China with a high profile and finally left the scene. Of course, up to now, neither LinkedIn nor Airbnb has left completely, but has left a “tail”, which is a foreshadowing for the future “return” that may never be used.

Airbnb retained its current China team, promising that they “will continue to support and drive business initiatives globally and in China with product innovation as the core.” Airbnb China also stated that in the future, it will focus on outbound tourism business, integrate team members, and fully serve the return of outbound tourism. In the past three years, due to the impact of the epidemic and strict control measures, the number of Chinese outbound tourists has fallen sharply.

For every Internet service company that is interested in taking the business to the next level, expanding the Chinese market is an obsession that cannot be given up. To succeed in the Chinese market is a necessary step to become a global leader.

Airbnb must also enter the Chinese market with such ambitions. In the atmosphere of the sharing economy at that time, it put on a posture of embracing China (the market), and quickly determined the Chinese name “Airbnb”. The name has been criticized for being far-fetched and inexplicable since its inception.

Like this awkward Chinese name, Airbnb’s road to expansion in China has not been smooth. In the first two years, Audemars Piguet has successively replaced six Chinese business leaders. Like all foreign service companies, Airbnb has been criticized for its lack of understanding of the Chinese market. A lazy description is “acclimatization”.

The situation turned around in September 2018, when Peng Tao, the former CEO of Bread Travel, became the president of Airbnb China, and the business grew significantly. According to data released by Airbnb, in the first quarter of 2019, business in mainland China (the number of guests) tripled. From January to 8, 2019, the average number of monthly active users of the app ranked first among short-term rental platforms in mainland China.

After the outbreak of the new crown epidemic, until June 2020, Airbnb still has expectations for the Chinese mainland market. In order to improve the operational efficiency of China, Xiao Jinhong, the former general counsel of Airbnb and the head of the Asia-Pacific business, was appointed as the newly established company. China COO position, reporting directly to Nathan Blecharczyk, co-founder, chief strategy officer and chairman of Airbnb in China.

On the first day of Airbnb listing on Nasdaq in December 2020, it opened sharply higher at a price of $146 per share, up 114.71% from the issue price. As of the close of the day, Airbnb’s market value reached US$86.305 billion, surpassing Marriott International Group, the world’s largest hotel group by market value, and Booking.com, an international travel giant.

Although for Audemars Piguet, profitability is its number one priority as a company, and it hasn’t made a profit until now. But current data has suggested that Airbnb’s business is improving.

On May 5, Airbnb disclosed its financial report for the first quarter of 2022. Affected by the gradual recovery of the global tourism industry, Airbnb achieved 100 million bookings in a single quarter for the first time. In the first quarter, accommodation (room nights) and experience bookings reached 102 million (times), a year-on-year increase of 59%, compared with 2019. A year-on-year increase of 26%. Despite the adverse impact of the ongoing pandemic, the Russian-Ukrainian conflict and the macro economy, net accommodation bookings on the platform in the first quarter of 2022 exceeded that of the same period in 2019 by 32%.

Looking at data from various regions around the world, Airbnb’s North American accommodation and experience bookings in the first quarter increased by nearly 55% compared to the same period in 2019; accommodation and experience bookings in Europe, the Middle East and Africa exceeded the same period in the first quarter of 2019 for the first time since the beginning of the epidemic. , an increase of about 20%; bookings in Latin America increased by about 65% from the first quarter of 2019. Excluding Asia Pacific, Airbnb’s global bookings for accommodation and experiences in the first quarter of 2022 surpassed nearly 40% of the same period in 2019.

It looks thriving and Airbnb’s business is recovering, except in the Asia Pacific region.

The earnings report noted that “bookings for accommodation and experiences remain subdued” in Asia-Pacific, and while Q1 2022 did see a sequential recovery in Asia-Pacific relative to Q4 2021, this recovery did not include China.

According to data from market research firm AirDNA, as of the end of April, Airbnb had more than 500,000 active listings in China (mainland) and more than 6 million active listings globally. According to information provided by “people familiar with the matter” cited in the report by The Wall Street Journal, accommodation and experience bookings in China (mainland) typically account for only about 1% of Airbnb’s overall revenue.

In 2018, Peng Tao, who soon became the president of China, predicted in an interview with the Economic Observer that China would become Airbnb’s largest source country in 2020. In the same interview, he said, “Studies show that China will surpass France as the world’s largest destination country by 2030.” The pandemic has delayed his predictions indefinitely.

On September 30, 2021, Peng Tao announced his resignation. In the following six months, Airbnb did not appoint a new Chinese president. People have begun to speculate that Airbnb has no interest in the Chinese mainland market.

As a commercial company, the most direct and essential reason for leaving a market or adjusting and shifting the focus of business is of course that the expected revenue and profit goals have not been achieved. Business decisions based on simple business principles should also be the most important Discuss within the boundaries of the business world.

However, in the context of the current delicate bilateral relationship between China and the United States and the complex multilateral relationship between China and its global trading partners, Airbnb’s business adjustment behavior will inevitably be interpreted in various ways, and the most concerned angle will eventually fall on the global within the framework of the future of change.

From a practical point of view, rather than analyzing the business adjustments of multinational companies, it is better to first care about how those Chinese hosts who originally provided listings on the Airbnb platform will benefit in the future.

After expressing “regret and regret” for Airbnb’s decision, a number of local platforms in China immediately sent out sincere invitations to these hosts.

As competitors, they used to compete for guests with lower fees and room rates than Airbnb, and now it is time to seize the opportunity and compete for listings.

Airbnb didn’t shut down its China operations entirely, it left behind a business serving Chinese tourists traveling abroad, an office in Beijing with several hundred employees, and a new scramble for shared accommodation. platform market.

Whether it will return to the Chinese market in the future is the least important question. (Fortune Chinese Network)

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