MAH says if Airbnb is not regulated, then it is a threat to us, as it cannot function like a hotel

By D KANYAKUMARI / Graphic By TMR

Hoteliers are facing rising competition from the popularity in Malaysia of Airbnb, the global hospitality app (application), and the want it to be regulated.

The Airbnb app, which allows people to rent out their rooms and is currently not regulated, has taken away up to 20% of the business from conventional hotels by some estimates.

Malaysian Association of Hotels (MAH) president Cheah Swee Hee (picture) told The Malaysian Reserve (TMR) that Airbnb provides unfair competition of hotels because it is not subjected to the same rigorous condition.

“Let me be clear though. If they are not regulated, then they are a threat to us, but otherwise they are just a business model,” he said.

He said Airbnb should not be allowed to offer rooms like a hotel at per day rentals, but should only be opened for longer stays.

“They cannot function like a hotel. Instead regulations should be set for them to fix a minimum stay of at least a month, or three months, for Airbnb accommodations.

“If they do that, it really should be fine for us, because there are people who come here and live for about a month or more anyways. Airbnb just should not be allowed to sell on a nightly basis,” he said.

He added that it was unfair for hotels to have to conform to so many regulations before they can open up their premises for nightly accommodation, while Airbnb can do as it pleases.

“We go through a long tedious process and conform to a lot of regulations. The way we look at it, they get the same benefits we do without having to face the regulations,” he said when met.

Airbnb in an email response to TMR recently noted it had 17,270 listings so far in Malaysia with a growth rate of 130% year-on-year (YoY).

“There has been an inbound guest growth of 248% YoY and an outbound guest growth of 168% YoY.

“Kuala Lumpur (KL) and Penang remain popular with 249% and 201% YoY growth respectively. However, we are seeing increasing inbound growth to Lamut, Cameron Highlands, Ipoh and Port Dickson,” its spokesperson said, adding that Airbnb is helping to democratise tourism and encourage people to explore different parts of the country.

Cheah said hoteliers are not advocating that Airbnb be banned, but just be regulated to provide fair competition to hotels.

“They are a big business model and all we are asking is for them to be regulated. We cannot stop them, but you must regulate them and check what is the supply to the market.

“Because, if you can’t identify the total number of supply in the market — meaning the inventory — it is impossible to know where people go,” he said.

Cheah said MAH fully supports the Ministry of Tourism and Culture’s move to register all premises under Airbnb.

“Through that, we will know the total supply of rooms first. Once that is done, the ministry needs to look into what are the rules they need to follow.

“In my personal opinion though, the ministry should not allow Airbnb to be in residential areas. If it is a SoHo or a commercial building then it is fine, but otherwise, it is really not safe,” he said.

He said MAH’s own findings showed that Airbnb had 5,800 listings in KL alone, in comparison the association can list only 1,000 hotels registered under it at the moment.

Cheah was speaking after the signing of a memorandum of understanding (MoU) between MAH and the Malaysian Association of Tour and Travel to boost the tourism industry in the country last Friday.

He had said with the boom of online bookings, many travel agencies have been going through a challenging time. With the signing of the MoU, a certain percentage of the market segment would be allocated to travel agencies.

“Travel agents and agencies are faced with the issue of securing competitive rates. So, with this collaboration, we will ensure a market segment is kept under travel agents. I believe this will enhance the travel agency business,” he said.

Asked on the allocation of the percentage, however, Cheah said it would depend entirely on the hotel operators.

“It would be up to them as to whether or not they would like to. It also really depends on market segmentation,” he said.

In 2017 alone, Malaysia has welcomed over 27 million tourists arrival up to August. The Tourism Ministry is targeting 31 million tourists in 2017 compared to 26.76 million in 2016. Cheah said the tourism industry is expecting at least 33 million tourists in 2018.