Data from hosting service provider Airbnb shows that in the third quarter of 2022 (3Q 2022), Kuala Lumpur was the world’s second most popular destination for international travellers who opt for residential-style accommodation over hotels, surpassing popular tourist hotspots such as Bangkok and Sydney.
For domestic travellers, Ipoh claims the top spot on the list of most popular destinations, followed by Kuching, Kuala Lumpur, Kota Kinabalu and Genting Highlands.
The market for Airbnb has been growing steadily over the last few years. An Oxford economics report noted that Airbnb contributed more than RM3.9 billion to Malaysia’s gross domestic product (GDP) in 2019.
It is therefore no surprise that hosting can be a lucrative source of income.
A 2022 survey commissioned by Airbnb found that 43% of Malaysian homeowners have considered hosting to take advantage of this demand.
It also indicated that 60% of existing Malaysian hosts felt that it had helped them avoid foreclosure and eviction.
A match made in heaven?
The supply of space for short-term stays in Malaysia appears to match the demand quite adequately, indicating that there is a high number of people prepared to host travellers at their homes.
However, to be listed, hosts must be able to tick all the boxes.
The top three features searched for nationwide are breathtaking views, golfing and pool.
There is also a new shift in the way people travel post pandemic, Airbnb general manager for India, Southeast Asia, Hong Kong and Taiwan Amanpreet Bajaj told FMT Business.
“A recent YouGov survey we commissioned indicated that more Malaysian guests are looking for unique stays, and long-term stays that support remote working,” This is attributed to the government’s DE Rantau programme, which is encouraging remote work among locals and foreigners.
The Airbnb Iceberg
Like most things, hosting on Airbnb is not as simple as it seems. Homeowners keen on this opportunity should be acutely aware of the challenges of hosting and regulations surrounding short-term accommodation (STA).
The slew of red tape starts with taxation. A host is required to collect a RM10 tourism tax for every foreign visitor staying at his property. He must also report his earnings through Airbnb for income tax purposes.
For their own benefit, hosts should also screen guests given that their property is at the mercy of potentially unruly travellers.
Damage to property or theft can be major issues if the premises are misused for parties. The cleaning up will be a nightmare.
It falls upon the host to procure the necessary insurance. Although Airbnb offers its own complimentary “Air Cover”, specific requirements must be met for a host to be eligible to make claims for any damage caused.
On top of that, each state has a different set of regulations regarding hosting and the types of property that can be rented out.
In most cases, the decision to allow hosting is delegated to the joint management corporation’s (JMC) authority under the Strata Management Act 2013. The JMC is given the authority to impose a one-off penalty of RM200 on hosts violating its by-laws.
Penang state housing committee chairman Jagdeep Singh Deo announced in March 2021 that Airbnb could only operate in a building if 75% of its residents agree to it at an annual general meeting of the unit owners.
This was in response to 226 complaints to the JMC about short term accommodation, and pressure from the Malaysian Association of Hotels in Penang. As a result, more emphasis is now being placed on long-term rentals, which can be seen in the DE Rantau programme.
“We look forward to the implementation of fair and practical short-term rental accommodation (STRA) guidelines that will enable micro-tourism entrepreneurs and STRA providers, many of whom are everyday Malaysians, to continue welcoming travellers with top-notch Malaysian hospitality,” Bajaj added.