Skift Take

Airbnb co-founder Nathan Blecharczyk's recent ascension to the post of chairman of Airbnb China and now Hong Ge's departure as head of its China operation are all part of the housecleaning the company feels it needs in the strategic market. Despite all the swagger about Airbnb's growth, it's obvious from the latest changes that the trajectory of the company's China position wasn't going according to plan.

In a blow to Airbnb Inc., the head of the company’s China business has left four months after taking the top job there.

Hong Ge, a former software engineer at Facebook and Google, told colleagues he was leaving the company for another opportunity. His departure reflects the struggle Airbnb faces in China, where protectionist laws and fierce competitors have long humbled tech giants such as Uber Technologies Inc.. Just this month, its government forced Airbnb and other home-sharing companies to cancel bookings in Beijing’s city center in the lead up to the Communist Party Congress.

Airbnb has long regarded building a brand in China as vital, as affluent millennials travel more than ever before. It spent years raising money and preparing the groundwork to tackle local rivals Xiaozhu and Tujia, which just raised $300 million. While the company has offered properties there since 2013, this year Chief Executive Officer Brian Chesky renamed the service “Aibiying” and pledged to double investment in China. It now complies with controversial laws that give local authorities access to users’ information.

In an email sent to colleagues, Ge didn’t elaborate on his reasons for leaving but reflected extensively on Airbnb’s breakneck pace of expansion in past months. Its offices have grown from 30 people to more than 120 in Parkview Green in Beijing, while total listings had doubled to 140,000 from 70,000 a year ago. Airbnb’s on track to double room-nights of Chinese origin to 8 million in 2017, and Ge also pointed out his team reduced instances of fraud from over 8 percent of gross bookings to less than 2 percent.

“It’s a very tough decision for me to leave behind all of what we have built together. But hey, it’s a small world. I will still be in the Internet industry,” he wrote. “I’m sure our paths will cross again in the future.” Ge didn’t respond to messages sent to his WeChat social media account.

Airbnb had searched unsuccessfully since 2015 to recruit a business chief for China, before finally promoting Ge from within. On June 1, Chesky told employees Ge would report directly to him. “This marks the end of what began as an external search for a China President,” he wrote. “As we met with candidates, it became clear that the best person to lead China was already inside our building.”

Ge was well-regarded by other executives in China’s shared housing space, including at rivals, who saw him as a potent mix of local know-how and Western expertise. On Oct. 21, Chesky sent another email: “Hong Ge, our VP of China, is stepping down to pursue opportunities outside of Airbnb.”

Cheksy told employees that Airbnb co-founder Nathan Blecharczyk would be spending half his time on the China business and making monthly trips there. That management change was unexpected, two people familiar with the matter say. A team of senior executives, including Vice President of Employee Experience Beth Axelrod, descended on Airbnb’s Beijing office at the time of the announcement, they said, asking not to be identified discussing internal matters.

An Airbnb representative declined to comment.

Kum Hong Siew, who runs Airbnb’s business in the rest of the Asia-Pacific region, will now play an even more prominent role, though his portfolio is becoming unwieldy. He’s the deputy general counsel for the Asia-Pacific, the head of business for the region, and now the steward of the company’s operation in China. Siew has worked at Airbnb since 2012, when he joined after a nearly four-year stint as Yahoo’s general counsel for Southeast Asia.

–With assistance from David Ramli


©2017 Bloomberg L.P.

This article was written by Olivia Zaleski and Eric Newcomer from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].


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Photo credit: The next domino just fell in China as the head of Airbnb's China operation departed after a few months on the Waldo Swiegers / Bloomberg