The Malaysian Insight

WITH the  industry reeling amid the Covid-19 pandemic, hosts on the Airbnb platform are starting to offer medium- to long-term leases to lessen their financial burden.

The Malaysian Insight learnt that owners of homestays and holiday rentals are employing various methods to attract tenants amid the movement-control order (MCO) period.

Primary tenants are now those from overseas who are stranded due to the closure of borders, said Airbnb Vivo sales and marketing head Hei Hui Xin.

“Tourists came to travel but due to the MCO, they could not return to their home countries and had to rent accommodations here.

“For those from another state, the situation is the same. Maybe they came to Kuala Lumpur for work and then were stuck here because of the MCO,” Hei said.

Owners are also willing to reduce their prices during the MCO so the property could be leased out quickly, she said.

Sleepy Bear director Ong Xun Rui agreed, saying empty units don’t generate income, hence the company is helping clients lease out their properties.

“Now, Airbnb also offers medium- to long-term leases, not just short term. Some even rent up to a year. Basically, the owner leaves the property to us to manage and we make adjustments according to the situation.

“Previously, Airbnb catered to tourists but we cannot generate income now. We will change the business model quickly to avoid a situation of zero income,” Ong said.

Hei said she was managing 25 Airbnb units, all in the Klang Valley. The owners previously thougth of reclaiming their properties from the company due to the pandemic.

“I met two owners who were considering it. But before that, we would explain the situation to them clearly and let them decide,” she said.

Domestic tourism

Ong said many property owners are using Airbnb to generate side income and the pandemic means many are in trouble, with some pulling out entirely.

“Frankly speaking, running an Airbnb is just like running a coffeeshop, if there’s no business then the best way out is to just close shop. Otherwise you’d still have lots of expenses.”

Airbnb primarily focuses on the tourism market but the pandemic and ensuing travel restrictions that followed led to plummeting occupancy rates in the last three months.

Ong, who founded and had since been running the company for five years, said Airbnb business will be reduced by 50% as long as Malaysia’s borders remain closed and tourists barred.

Areas heavily dependent on tourists are hit hard by the restrictions, such as Johor.

“In the Klang Valley, for example, let’s say the property is in Petaling Jaya, then the situation is not as bad because the area is focused on business tourism and that is recovering.

“But in Kuala Lumpur, there is a lot of supply and the market there is focused on tourists, so recovery has been slow. Now, owners are using low prices to attract renters and this has led to fierce competition,” Ong said.

Domestic tourism is also slow, with most people primarily travelling to visit their family or relatives, she said.

Hei, meanwhile, said there were zero bookings during the MCO but now under the recovery phase, there are one or two enquiries a day.

“There are still no bookings, maybe domestic tourism will recover in about a month.”

The Covid-19 situation, however, is still uncertain and many people still dare not venture out and more time is needed for people to regain confidence, she added. – June 19, 2020.