Airbnb’s exit from vacation rentals in China amid Covid-19 lockdowns highlights the country’s isolation

Liu Shaopeng’s Airbnb stays in Japan, New Zealand, and the UK were more than just great holidays: they inspired him to become an Airbnb host himself. For two years, I have sublet two apartments in Beijing. He said he loved the platform and befriended many of the 200 guests he hosted in Beijing. After he moved to Shanghai in 2020, Liu wanted to rent out a spare room in his apartment from him, and even planned to offer an Airbnb Experience, a signature feature of the platform that involves guiding visitors on a local activity.

Then, everything went wrong. A months-long lockdown confined Liu to his home. Days before the quarantine finally ended in late May, Airbnb announced it would close its China business and remove around 150,000 listings. “It’s such a pity,” the 33-year-old said. “The entire country is becoming more closed to the world.”

Airbnb’s China exit, and the disappointment of hosts who used the platform, highlights the challenges of operating a foreign platform in the country – and how those platforms provide a unique link to the outside world. The combination of a strict zero-Covid strategy, the government’s tightening control of the internet, and the rise of local monopolies have combined to create physical and digital barriers between China and the wider world. For younger people in the country who grew up feeling like global citizens, it’s been a difficult shift.

China began to open up to the global economy in the late 1970s, allowing the rapidly-expanding middle class to grow accustomed to consumer brands from around the world like Nike, McDonald’s, and Coca-Cola. Shanghai now has its own Disneyland and one of the world’s biggest Starbucks. But things have changed dramatically in recent years. The Great Firewall keeps the Chinese internet isolated, tighter government regulation makes it harder for foreign firms to compete, and now, the zero-Covid policy makes it extremely difficult for anyone to travel in or out of China.

Major tech companies and platforms have also been pulling back from the country. LinkedIn, the last global social network available in China at the time, pulled out last year. This month, Amazon announced it would stop selling Kindle e-readers this month and shut its e-book store next year. And Nike is shutting its popular Nike Run Club App. But even among those names, Airbnb stands out: as a travel site, it was one of the few global platforms that allowed Chinese users to interact directly with people from overseas, both online and offline .

“Many good things are disappearing from this place,” said Hayami Wang, 26, another Shanghai-based Airbnb user. After the pandemic made traveling abroad almost impossible, Wang rented weekend stays on Airbnb in other parts of Shanghai just to meet new people. “The globalized, open, inclusive world seems to be moving further away from us.”

Like many other American tech companies, the San Francisco-based firm once dreamed of winning over China’s massive market. In 2017, chief executive Brian Chesky announced Airbnb’s Chinese name, Aibiying, a similar-sounding phrase that translates as “to welcome each other with love,” and promised to double its investment in China. In 2019, the company’s then-China President Tao Peng said the country could become Airbnb’s biggest source of guests.

The reality turned out very different, and Airbnb failed to go mainstream in China. To older generations, staying at someone’s home or couchsurfing remain alien concepts, while to younger people, hostel chains are cheaper and easier to access. Airbnb was also slow to incorporate the dominant mobile payment methods, Alipay and WeChat Pay. And local rivals, backed by tech giants Alibaba, Meituan, and Ctrip, fought for customers by offering generous subsidies –– a strategy Chinese tech companies often use when trying to establish control of a newly-emerged sector. Airbnb stayed out of that price war, and as a result, rentals in China account for just 1% of its global revenue.

In addition to local competition, foreign tech companies also have to comply with tightening censorship, laws on data security, and in Airbnb’s case, complicated rules around short-term rentals aimed at policing Chinese citizens. The company has faced criticism for sharing user data with the Chinese government and allowing discrimination against suppressed ethnic minorities.

But Airbnb’s commercial failure has also given it a unique identity in the country, as loyal users view the platform as a niche space where they can meet other young, middle-class urbanites keen to share personal stories. While their Chinese competitors increasingly focus on professional guesthouse chains with hotel-style check-in and cleaning services, Airbnb’s users told rest of world that they’ve made friends, shared emotional moments, and formed professional relationships with their hosts or guests.

Summer Xu, a 22-year-old teacher and former host in Beijing, recounted to rest of world how she learned to cope with body-image anxiety from an elderly Finnish host, comforted a guest who was suffering from post-natal depression, and met a Taiwanese gay couple while organizing an art exhibiton tour. Airbnb’s hosts in China, many of them designers and tech workers, would also get together to do sightseeing, handicrafting, and yoga.


Courtesy of Summer Xu

While older travelers in China have long preferred group tours, for younger people, traveling independently and meeting strangers have become part of their identity as open, adventurous global citizens. “It represents something new from other parts of the world,” said Mingming Cheng, a researcher with Curtin University who studies digital marketing and tourism. “It’s the same with Starbucks. Starbucks is also popular among the young generation as well. It’s a bit of a lifestyle identity, rather than the company being better than the local ones.”

Airbnb’s hosts in China like to demonstrate that identity. In their bios, hosts talk about their love for fortune-telling or collecting antiques. Airbnb “experiences” in China include shooting with film cameras, roasting coffee beans, and exploring the “wild” parts of the Great Wall of China yet to be restored for tourists. Liu wanted to launch an “experience” in Shanghai to take tourists from China’s smaller cities to visit the country’s first Costco: a taste of American consumer culture without crossing the Pacific.

Airbnb said it will continue to work for Chinese people traveling abroad. But most middle-class Chinese have not been able to leave the country since early 2020, and there’s no date in sight for when the government will lift stringent border controls aimed at keeping Covid-19 numbers at zero. Immigration authorities recently said they would strictly limit “non-essential” travel, at a time when people in many other parts of the world are traveling again.

After hearing about Airbnb’s exit, Wang, the Shanghai-based user and blogger, asked her social media followers to share their experiences using Airbnb. Several hundred people sent over photos and texts reminiscing about their overseas trips from several years ago. “Thank you Airbnb for bringing this dream to us,” a follower wrote, according to Wang. “But now we all know the tide is receding. The buildings are collapsing. The old dreams were nowhere to be found.”

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