Airbnb (NASDAQ:ABNB) has decided to halt its in-country operations in China for the time being due to the resurgence of Covid-19 in the country which has brought tourism to a standstill, and will instead concentrate on outbound travel.
Home rental service Airbnb (NASDAQ:ABNB) launched its China operations six years ago, and has hosted more than 25mln guests, but the company said bookings at residences in China have accounted for only 1% of its total bookings in recent years.
The US short-term housing rental platform faced strong competition in China, and Covid-19 made its operations more difficult and expensive.
Airbnb (NASDAQ:ABNB) will no longer book China stays or visitor "experiences", which is good news for rival Tujia, which has set up a green channel to help the US firm's 150,000 China hosts transfer to the Tujia platform, the Beijing-based company said.
While the rest of the world has adapted to living with the Coronavirus, China maintains its zero-Covid policy, imposing hard lockdowns and restrictions on movement.
The curbs, which include stay-at-home orders in Shanghai and creeping restrictions throughout Beijing, have been devastating to the economy.
However, Airbnb anticipates a rebound in outbound tourism from China once Covid-19 restrictions ease and borders reopen.
Airbnb reported in its recent earnings report that bookings hit a new high in the first quarter of this year, indicating that travel demand that had been stifled by the Covid-19 pandemic is now resuming.
Bookings for accommodations and travel "experiences" at Airbnb surpassed 102mln in the first three months of this year, setting a new quarterly record, the company said in an earnings release.
"Guests are booking more than ever before," Airbnb told shareholders in a letter.
"Looking ahead, we see strong sustained pent-up demand."