HOTELIERS say they are giving the government ample warning that its failure to regulate all forms of short-term rental accommodation (STRA), such as Airbnb, will kill the hotel industry.
Malaysian Budget and Business Hotel Association (MyBHA) president Sri Ganesh Michiel said players were facing tough times.
“Business is very bad. It’s getting worse. In Sarawak, it’s a very serious issue,” he said after attending the MyBHA Sarawak chapter’s annual general meeting this week.
Michiel said the hotel industry has been calling on the federal government to take quick action in regulating STRA and online booking travel agencies without much success.
“We have discussed the issue with Tourism, Arts and Culture Minister Tiong King Sing and until today, we have heard nothing coming out of it.
He said STRA and the online bookings have been an unresolved industry threat for such a long time and now they are affecting their hotel businesses.
The government, he said, should take a leaf out of the Penang government’s policy on regulating STRA in the state.
In May last year, Penang banned all forms of STRAs at residential units.
The ban covered all private residential properties.
Those planning to offer STRAs in the commercial categories must obtain the approval of their respective joint management bodies (JMBs) or management corporations (MCs).
A 75% “yes” vote is required from other residents at an annual general meeting.
The JMBs and MCs are then to collect an annual fee ranging from RM250 to RM500 a year per unit.
The unit must also be registered with the Penang Island City Council (MBPP) and the owner must provide Companies Commission of Malaysia documentation.
Other fees include a one-time security deposit, ranging from RM1,000 to RM3,000 per unit.
Each STRA unit is only allowed to be rented for a maximum of 180 days a year and rental is also limited to three days a week.
Michiel pointed out that right now, there is no such regulation in other states.
The playing field is also uneven, he added.
“We hoteliers have all kinds of rules and regulations to follow. If we don't comply with the rules, we get penalised.
“They (the STRAs) have no such rules and don't get penalised even though they are offering the same service as the hotels.
“We also have to pay all kinds of taxes. They don’t. They just do what they like. That's what you get when there is no control,” he said.
Michiel said business is so bad that “shoplots are even sold via Airbnb”.
He said the mushrooming of online booking travel companies have compounded their problem.
“Too many online players. These companies are normally based outside Malaysia and they now control the hotel booking and reservation market.”
Michiel said in the post-Covid-19 Malaysia, 95% of hotel booking is done online.
“Prior to the pandemic, it was only 60%. Since they control the market, they set the rates for the hotels.”
Michiel said government intervention is needed to help the hoteliers sustain their business.
“If there is no resolution (to the issue), then there will be no more hotels (in the future),” he said.
The bigger four-star, five-star hotel manipulation of their room rates is also adding more woes to the budget hotels, he said.
He said when the bigger hotels lower their rate to stay competitive, it leaves no room for the budget hotels to maneuver.
“If we follow what they're doing and adjust our rate lower, we’ll go under.” – April 21, 2024.
