Airbnb Appoints Head of China Operations After Long Search

(Bloomberg) -- After a long search for an executive to run operations in China, Airbnb Inc. named an existing executive, Hong Ge, as vice president in charge of its business in the world’s second-largest economy.

Hong will report to Airbnb Chief Executive Officer Brian Chesky, the vacation-rental company said in an emailed statement Thursday. “Hong has unparalleled knowledge of our product and what it needs to be in China, combining a deep technical expertise with an understanding of the local market,” Airbnb said.

Hong’s job will be to help Airbnb crack what could be its toughest market to date. The company has spent years raising money and preparing the groundwork for expansion into China -- a country whose local players and laws have humbled tech giants ranging from search giant Google to ride-sharing service Uber Technologies Inc.

Late last year, Airbnb began storing data relevant to its China operations on local servers to comply with controversial digital security laws that give local authorities access to the information. While the company has offered properties there since 2015, Chesky officially launched its service at a glitzy Shanghai media event as part of a whirlwind tour through Asia.

A Yale University graduate, Hong has previously worked in software engineering roles at Facebook Inc. and Google. His Linkedin profile lists Beijing has his current location. Airbnb has been slow to pick someone to take on the leadership role with Chief Financial Officer Laurence Tosi spending much of his time leading the nascent China subsidiary.

“As with all things related to our China plan,” Tosi said in December, “we are moving extremely slowly, carefully and ­deliberately.”

Airbnb’s biggest challenge will be home-grown rental platform Tujia, which is backed by Ctrip.com International Ltd. -- China’s largest online travel agent. The company has been consolidating the local market and boasts 400,000 properties as well as an additional 300,000 via its low-cost sibsidiary Mayi. Tujia is valued at over $1 billion and told Bloomberg in April it was in the midst of raising an extra $300 million to fund an expansion of its operations.

Another rival, Xiaozhu, is also rapidly expanding and has recently branched into targeting business travelers. The company differentiates itself from rivals by offering services to hosts such as renovation work and cleaners.

But all of China’s players operate in legal gray area due to the lack of specific regulations to govern the sector. Laws often differ between provinces and can rapidly change, as seen in the ride-hailing space; despite the industry gaining the ability to operate legally from the central government last year, many of its drivers could be forced off the road under laws being enacted in several major cities.

To contact Bloomberg News staff for this story: David Ramli in Beijing at dramli1@bloomberg.net, Olivia Zaleski in San Francisco at ozaleski@bloomberg.net.

To contact the editors responsible for this story: Mark Milian at mmilian@bloomberg.net, Jillian Ward

With assistance from David Ramli, Olivia Zaleski