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Budget hotels badly hit by Airbnb

 | April 21, 2017

MyBHA president blames regulatory authorities for uneven playing field.

pk-leong-airbnbtKUALA LUMPUR: The Malaysia Budget Hotel Association (MyBHA) has complained of unfair competition from the Airbnb online service, blaming the regulatory authorities’ failure to ensure an even playing field.

“It doesn’t make sense that we have to comply with all sorts of regulations and they don’t,” MyBHA president PK Leong told FMT. “I might as well close my business, buy apartments and run Airbnb.”

He pointed out that Airbnb operators were paying only residential rates for utilities, whereas licensed budget hotels were paying “all sorts of regulatory expenses” and incurring high costs, “such as the goods and services tax, minimum wages, commercial rates for utilities and so on”.

He said this was why budget hotels were not profiting as much as they should.

Budget hotels are rated three-star, two-star, one-star, three-orchid, two-orchid or one-orchid. An outlet’s rating depends on its services rather than the number of rooms it has or the room prices it charges.

Leong said he doubted the projected arrival of 31.8 million tourists to the country this year would translate into good times for budget hotels.

He proposed that Malaysia emulate Singapore, which passed a law in February making it illegal for home owners to rent out entire apartments and rooms for less than six months.

Failure to act on the matter would come at a cost to the economy, he added.

He said MyBHA had around 2,000 members, including those trying to get their licences.

On average, a budget hotel has 15 employees, comprising managers, receptionists, housekeepers and maintenance workers.

“So MyBHA members alone employ some 30,000 people, who in turn contribute to the economy,” Leong said.

He estimated that there were currently 4,000 licensed and unlicensed budget hotels that were not members of the association. “So you can imagine how many people are being employed in the industry.”

Last August, a news report quoted an official of the urban wellbeing, housing and local government ministry as saying that Airbnb was considered legal.

While Uber is being regulated, what about Airbnb?

Hotel association wants Putrajaya to regulate Airbnb


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