STAs still unregulated and operate below radar of the law, as well as pandemic SOPs, with zero checks and balances to determine they are safe to inhabit

by LYDIA NATHAN / pic by AFP

THE hospitality industry including short-term rentals (STAs) and hotels have been left reeling from the impact of the pandemic, and many wonder whether the sector has the ability to bounce back once borders reopen and vaccinations settle the dust.

Globally, Airbnb Inc has become a huge name but with such a high cancellation rate, it is nearly impossible to operate a company that largely relies on travel and tourism, which also meant a huge loss in the last year for the platform.

The Malaysian Association of Hotel Owners (Maho) CEO Yap Lip Seng said the success of STAs like Airbnb has always hinged on its minimal operating expenses, which is almost none when unoccupied.

According to Yap, while property owners may argue the need to service loans, it is however relative to capital gains on the investment whereby in Malaysia, not all of it is investment-based ownership.

“The impact on these short-term rentals is also minimal because it bears zero compliance cost.

“The business model allows it to rebound easily because of the minimal operating and fixed costs involved,” he told The Malaysian Reserve (TMR) recently.

As of now, STAs are still unregulated and operate below the radar of the law, as well as pandemic standard operating procedures (SOPs), with zero checks and balances to determine they are safe to inhabit.

“While we foresee there will be demand for alternative accommodation, it must be regulated in the future to ensure the interests of guests and tourists are protected, as well as to prevent more leakages from the tourism industry and its stakeholders.”

Additionally, he said like any commercial property or outlet, cleaning, sanitisation and disinfection are of utmost importance due to the pandemic, but not all follow the same strict, stringent processes.

Yap said on safety and hygiene, hotels will score well because of their stringent SOPs and regulatory compliance.

“Unfortunately, this also translates into higher operating costs for hotels because of the processes it must undergo.

“Nonetheless, they will still receive guests opting for short-term rental due to budget concerns, taking a risk on safety and health.”

Another Maho spokesperson agreed that the public’s perception is most likely to be more favourable towards hotels compared to short-term rentals because of the former’s standards of safety, health and service towards guests.

“Due to the pandemic and the current environment, hotels have undertaken a disinfection and sanitisation programme, ‘Clean & Safe Malaysia’ with certification and an audit by various reputable organisations,” the spokesperson told TMR.

According to the spokesperson, because short-term rentals operate more through personal management, it may not practice similar SOPs or have performance indicators on hygiene and safety to adhere to.

“Property maintenance is sometimes not up to par, whereas hotels undergo inspections by the Fire Department, food and beverage outlets undergo auditing by local authorities and a rating by the Ministry of Tourism, Arts and Culture.

“STAs may not be able to comply with the strict SOPs for travel and tourism amid Covid-19. How the properties have been maintained so far of course have to be taken into consideration, as this will definitely incur large costs.”

The spokesperson added that this also has to do with how STAs are not regulated, licensed nor subject to enforcement, which makes the playing field unfair since hotel operators are under such rules.

“Licensing and compliance to regulations framework for STAs was developed in 2019 and meant to be implemented in 2020, but unfortunately was cut short due to the pandemic.

“It does not seem like it is being given much attention at this point,” the spokesperson said.

Despite all these, Airbnb Malaysia said it is committed to working with the government and the industry to drive tourism recovery in the country.

“We will continue to remain focused on how we can help local communities get back on their feet in the long term,” it told TMR.

The platform declined to comment on what strategies or plans it has in the pipeline to reach the goal of assisting communities to recover from the pandemic.

Rather, it said it has made it easier for people to become hosts by simplifying the process into 10 simple steps.

“This will make it easier for Malaysians to not only earn extra income through hosting, but make a valuable contribution to their local economy.”

Airbnb Malaysia added that there has been a lot of enthusiasm for travelling once Malaysians are able to, as proven by a survey by YouGov.

“Travel with immediate family was the No 1 reason for domestic travel among Malaysians where 60% of respondents said they plan to connect with immediate family for their first trip, followed by friends.”