By CY Ming
Airbnb issued a press release on its Malaysian operations stating, “With 1.5 million guest arrivals to Malaysia, Airbnb has generated an incredible RM200.4 million (US$50.2 million) for the Malaysian economy in the last year alone. We look forward to continuing to work closely with the relevant authorities to craft and implement clear and fair regulations governing short-term rentals in Malaysia.”
An Airbnb spokesman said it had worked with over 275 governments worldwide to develop “clear and sensible frameworks” that support home sharing while at the same time addressing local community needs. The spokesman added, “We’ve had meaningful and productive conversations with the Malaysian authorities, who are excited by the prospect of home sharing and the benefits the Airbnb platform is already bringing to local tourism.”
Such politically correct statements remind me of those repeatedly issued by Uber when it first entered Malaysia in 2014, which were swallowed hook, line and sinker by even seasoned journalists and radio talk show hosts.
This time, a local daily described Airbnb as an online hospitality provider but I beg to differ. The hospitality industry encompasses accommodation, and food and beverages provided by hotels and restaurants. Airbnb does not own property to provide such services and is merely an online broker between mostly private residences and guests looking for cheaper options.
This online marketplace provides opportunities for millions of owners and entrepreneurs around the world to rent out private rooms, apartments or houses to tourists for short-term stays.
Airbnb cannot claim to have generated RM200 million for the Malaysian economy last year as most of this revenue was taken away from hotels, which suffered a lower occupancy. At best, Airbnb can be given credit for attracting more visitors to Malaysia as many tourists perceive that costs are much lower at private residences without realising that hotel room rates in Malaysia are relatively low.
No quarter would object to an owner or main tenant renting out spare rooms for short-term guests to defray costs. But it is a different ballgame altogether when whole apartments or houses are used just for this purpose, as the security and safety of the building or neighbourhood would be compromised with strangers entering and leaving unchecked.
Kuala Lumpur City Hall (DBKL) licensing and petty traders management department director Anwar Mohd Zain said there are currently no laws governing Airbnb, and plans to regulate the short-term rental market by 2019 as DBKL has received numerous complaints from the public, mainly from those staying in apartments and condominiums where units are rented out for short-term stay.
Those who make renting out private residences a business should collect tourism tax for the Royal Malaysian Customs Department, and pay income tax to the Inland Revenue Department, with the cooperation of Airbnb. If not, the local authorities are being taken for a ride or still dragging their feet, after being caught flatfooted by disruptive technology.
CY Ming is an FMT reader.
The views expressed are those of the authors and do not necessarily reflect those of FMT.