The Malaysian Insight

HOTELIERS are looking forward to the government’s move to standardise rules and regulations covering hotels and other accommodation services, including Airbnb, to create a level playing field.

Home-sharing platform operators, however, have expressed concern as they offered different sorts of accommodation compared to hotels, and suggested that a single set of rules may not apply for all.

Putrajaya’s plan to standardise the rules and regulations follows complaints from hoteliers that their home-sharing rivals are eating into their business by offering cheaper deals without offering any hotel experience.

They also said home-sharing platforms such as Airbnb are not governed by the same regulations, licensing and taxes as hotels.

Following this, Housing and Local Government Minister Zuraida Kamaruddin said last week that the move to standardise the hotel sector and other alternative providers will be finalised by year-end.

Several Airbnb hosts, however, said it is unfair to impose the same set of regulations on them as on hotels.

Grace How, founder of Project Uchi, a fusion hostel based in SS2 in Petaling Jaya, Selangor, said the Covid-19 pandemic had made it impossible to implement a standard set of rules on all accommodation providers.

“With the pandemic now, everyone is affected, including Airbnb hosts. There is no levelling of the playing field if the field has been inactive.

“Rules and taxes will also be irrelevant now and are inappropriate to impose given the current situation,” she said.

Instead of urging Airbnb hosts to “play fair” and lowering the stream of travel income in this country, How urged hoteliers to up their game and research customer trends on travel accommodation.

“Hotels are standardised and have star-rated expectations while Airbnb is for the adventure and experience. Both are valuable options for customers,” said the 31-year-old How.

She said there are also big Airbnb players who are capable of competing with hotels.

“I am aware of the big players of Airbnb in Malaysia, where they sign tenancy for 10-20 units in the city centre and hire several maids to clean up.

“These big players are operating on a big scale, and are not practising the hosting culture and are violating the tenancy contract where they ‘sublet’ to short stay travellers and disrupt the neighbourhood meant for residential use.

“Do you equate these big players to guesthouse owners or hostels who host backpacking travellers?”

How said the government must specify which types of accommodations are disrupting the already weakening hoteliers instead of putting everything under one label.

Thirty-three-year-old Erik Yean manages 30 homestays in Mesahill Nilai through Agoda, Booking.com, Expedia and more.

After finding it difficult to find a tenant for his studio in Seri Kembangan, he ventured into the home-sharing business for a solution to cover his housing loan.

With the discovery that he could earn up to three times the average monthly rental by doing a homestay, he found no interest to revert to long-term tenancy.

Yean was managing his own house as a homestay for five years before doing it for his neighbours in Nilai.

“When I bought another condo at Nilai Mesahill, I decided to offer my services to my neighbours to help them cover their loans and bring in additional income.

“It is indeed an unfair advantage that as homestay operators we do not need to come out with any capital (if done on a profit-sharing basis with other owners).

“If it is my own house as a homestay, the capital is not as high as a hotel. The ministry can make regulations according to their best judgment but it is indeed not as straightforward to level the playing field.

“There is also a reason why the sharing economy is the future,” he said.

‘Don’t tax us’

For homeowners who only rent out a single home, they do not think the government should implement any rules or tax for Airbnb.

“For myself, I am not doing Airbnb full time and I do not really treat it as a business.

“I do Airbnb simply because I got an extra space, so why not utilise the empty space?” said Bonny Ng, 39, who listed his Port Klang apartment in 2019.

Tiong Wen Ni, 34, who has been in the home-sharing business since 2016, also asked if the government is more keen on protecting corporations or the individual house owners.

“For me, the proposal looks more in favour of hotel operators than the many individual house owners who only wish to earn some passive incomes.

“I do not think we can compare an apple to an orange. There is no way we can earn more than hotel operators, nor will we even threaten their positions as they are offering more than room service.

“For example, they have conference halls for events and seminars, as well as buffet and catering services,” said Tiong.

Victoria Home chief financial officer, Wong Chea Hao, said there have been efforts from the Tourism, Arts and Culture Ministry and Kuala Lumpur City Hall to register Airbnb operators for the past two years.

“At Victoria Home, we are in the business of both Airbnb serviced apartments as well as boutique hotels, and we have obtained the necessary licenses and contributed to the tax submissions.

“Similar to the effort to regularise e-hailing drivers, we see the efforts to regularise the Airbnb operators as a positive move from the government.

“This provides greater security and confidence to the general public and consumers that the Airbnb industry is here to provide modern alternative accommodation options to consumers,” Wong said.

Victoria Home is a property management group managing more than 300 homes and hotels in Malaysia.

“We feel strongly that the Airbnb operators and hoteliers should come together to allow tourism in Malaysia to flourish with high-quality offerings to capture higher inbound arrivals and receipts.”

Timely move, say hoteliers

Malaysian Association of Hotels chief executive officer Yap Lip Seng welcomed the move to regulate home-sharing operators, saying that it is timely.

“Home-sharing providers at the moment are not taxed, whether it is on the customer, the service provider platform or the host of the home,” he told The Malaysian Insight.

“We expect the standardisation to bring positive impact by reducing leakages from the industry, ensuring transparency, as well as giving clarity for both operators and customers.

“It would only be fair for the entire tourism industry,” Yap said.

Other hotel owners echoed this sentiment.

Gareth Lim, the chief executive officer of Ormond Group, which owns Ormond Hotels, MoMo’s and Tune, was supportive of the initiatives to ensure a level playing field.

“This is not just from a financial or tax perspective but also to ensure that providers of accommodation adhere to the health and safety regulations for the wellbeing of all guests,” he said.

Ties between MAH and Airbnb have been frosty and came to the fore when the association on February 15 urged Airbnb to suspend operations immediately to help the government contain the spread of Covid-19.

MAH said the lack of registration information, guest services and support, emergency preparedness and basic standard operating procedures by the home-sharing platform posed critical risks to the country’s crisis management, leaving its citizens vulnerable to external threats.

Airbnb hit back in a letter to the Health Ministry saying that Putrajaya should censure MAH for using the Covid-19 outbreak to run a campaign against the short-term rental accommodation industry.

Yap revisited this issue by saying that there was an urgent need for regulations to ensure providers such as Airbnb fulfill basic regulatory and safety requirements.

“Platforms like Airbnb have repeated many times that they are willing to cooperate with the government on tax collection for many years but until today not a single sen has been contributed,” he said.

He also said a public consultation was held on October 9 last year 2019, by the Malaysian Productivity Council (MPC) under the authorisation of the Malaysian Tourism Board to get public opinion on short-stay Airbnb regulations in Malaysia.

“A regulatory framework drawn up with the Malaysian Productivity Corporation last year has yet to be adopted by policymakers and regulators,” Yap said.

Yap also said the home-sharing business model was not licensed and worked without permits.

“They are not in compliance with employment laws, or any laws for that matter, on top of the added risk at the moment with Covid-19 on the loose.” – September 30, 2020.