The importance of regulating short-stay homes in Malaysia

  • Malaysia
  • Saturday, 06 Apr 2019

Does the home-sharing business really affect the hotel industry in Malaysia?

If it’s up to the travel and hospitality stakeholders in Malaysia, regulation on short term accommodations (STA) in the country is long overdue. Concerted calls have been made repeatedly to put the home-sharing industry under scrutiny.

Thus, there is some form of relief that a proposal from the Malaysia Productivity Corporation (MPC) to the Government is already underway.

Malaysia Association of Hotels (MAH) chief executive officer Yap Lip Seng said a regulatory framework would ultimately benefit tourists.

“STA or home-sharing in Malaysia at this point is as good as trying your luck. There’s no independent check and balance. There’s no independent review or feedback system in existence.

“Where would a guest with a problem (lodge an official) complaint to? Nowhere,” he said, adding that tourists deserve to be protected.

While MAH has been one of the biggest detractors of the home-sharing economy, Yap took on a more diplomatic tone when commenting on the future of STA in Malaysia.

“We are participating actively in the efforts to draw up regulations, but our intention is not to ban STA entirely. We believe there is a place for such a business model, and we are not against technology,” he said.

MAH’s stand, according to Yap, is that regulations are needed for all genuine stakeholders – not just home-sharing.

MAH chief executive officer Yap Lip Seng said its not hoteliers' intention to ban home-sharing entirely.
Matta President Datuk Tan Kok Liang said there have been much leakage in taxation when it comes to STAs.
MyBHA president PK Leong said the growth of STA will be detrimental towards budget hotels in the country.

“Many would assume that the hotel industry is sore with the home-sharing disruption, but the truth is, the overall tourism industry is what’s affected. The industry functions as an ecosystem, and home-sharing is where the leakage is,” he said, alluding to the loss of revenue in tourism taxes.

It’s a sentiment echoed by Malaysian Association of Tour and Travel Agents (Matta) president Datuk Tan Kok Liang. Calling it a “long overdue issue”, he said there has been much leakage in taxation when it comes to STAs.

“STA platforms make use of borderless digital commerce to circumvent the country’s taxation policies resulting in a loss of much-needed income to the nation,” he said.

Tan is also pessimistic about the contribution of STA towards the tourism economy, noting that home-sharing is usually catered towards cost-conscious travellers.

“Encouraging STA operations in the name of boosting tourist arrivals will have adverse effects in the long term. Tourist arrivals in the next few years is not expected to be on a double digit increase (percentage wise) and hotels are recording somewhat lower occupancy due to loss in market share to cost-conscious and budget travellers,” he shared.

If the aforementioned scenario persists, Tan said Malaysia may have difficulty attracting hotel investments.

“Once the budget and hotel industry loses its shine, it will be difficult to attract high-end tourists and MICE groups to Malaysia – tourism is not just about headcount, it’s also about yield,” he said.

Meanwhile, Malaysia Budget Hotel Association (MyBHA) president P.K. Leong said the growth of STA will be detrimental towards budget hotels in the country. He highlighted the fact that tourists who stay at STA don’t pay the tourism tax.

“We can’t stop people from earning an income, but it has to be fair to all. They must be subjected to all taxes as budget hotels too,” he said.


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