The 2,000-member strong Malaysia Budget Hotel Association said many of the 100,000 people working in the industry could lose jobs next year.

It said operators have been forced to reduce staff to cut down overheads, adding that 10 budget hotels had ceased operating in Kuala Lumpur in 2017.

Adding to the burden are taxes in different forms “while Airbnb operators are free from any form of taxes”.

“Of course we cannot compete in terms of price with them. We are losing money,” the association’s president PK Leong told FMT.

He said Airbnb operators were offering rooms at least RM40 to RM50 cheaper than budget hotels.

Leong said the once flourishing business started taking a nose dive in 2013 when Airbnb started gaining popularity in Malaysia as it was even cheaper than budget hotels.

He added Airbnb operators ran businesses from their homes and were free from tourism tax, sales and services tax (SST), licence permits and personal taxes.

“They are enjoying the benefits while we have to pay for every single thing. It makes more sense for us to close down our commercial premises and run Airbnb too,” he said.

He urged the government to start charging Airbnb the same taxes imposed on budget hotels so that they would all be on an equal footing in doing business.

In 2018, budget hotel operators had asked the government to exempt them from the tourism tax as customers on a budget felt the pinch of an additional RM10 per night.