Rental cap on Airbnb will stifle tourism growth

LETTER | The growth and future health of local tourism is of critical importance to Malaysia’s economy. Tourism contributes more than 14.9 percent to Malaysia’s economy - higher than the global average of 10 percent - and employs more than one in five workers.

The Malaysian government understands how important tourism is and is committed to growing it. The Malaysia Tourism Transformation Plan 2020 is an ambitious plan to grow visitor arrivals to more than 36 million and tourist receipts to RM168 billion by 2020. From the outset, the government has been clear-eyed about the scale of this challenge. They recognise that tourism is becoming more competitive and travellers preferences are changing.

While real progress has been made, recent tourism figures reinforce there is more to be done. In 2018, the number of international tourist arrivals into Malaysia fell from 25.9 million in 2017 to 25.8 million - short of the target of 26.4 million. A bright spot for Malaysian tourism has been the continued growth of short-term rentals with more travellers, including Malaysians, choosing to stay in them. Globally, more than 500 million guest arrivals have checked into an Airbnb and new research has found more than 78 percent of Malaysians would consider staying in a short-term rental.

The Malaysia Productivity Corporation is currently considering how best to regulate this growth engine of the tourism industry. The Malaysian Association of Hotels is using this process to call for a new cap on the number of nights a short-term rental could be booked. There are a number of challenges with a rental cap. 

First, it runs contrary to the goal of growing tourism, and the commission's work on reducing unnecessary red tape and enhancing competitiveness and innovation. Restrictive caps would mean less choice of where to stay for travellers. Less choice means fewer travellers and growth. It would also put Malaysia at a significant disadvantage relative to other countries which are supporting short-term rentals.

Put simply, a cap on short-term rentals would be a cap on tourism.

Second, caps don’t suit Malaysia’s unique needs. While caps may be suitable for cities suffering from over tourism or housing affordability issues, Malaysia has the opposite problems; it needs to grow tourism and has a glut of housing.

Third, restrictive caps would hurt the local families and businesses that currently benefit from short-term rentals. More Malaysians than ever are choosing Airbnb to earn extra income or afford a domestic holiday, and both would be harder with caps. Caps would also threaten jobs in local restaurants and shops who benefit from short-term rental guests. In 2017, retail and food were far and away the biggest employers in tourism accounting for two-thirds of all tourism employment in Malaysia.

The fact is the association’s plan does not support tourism growth but instead protects the interests and profits of their members.

In stark contrast, the local Airbnb community stands ready to help grow and future-proof Malaysian tourism. Our message to the Malaysia Productivity Corporation is simple - if you want to grow tourism, support short-term rentals. 

We have worked with governments across the world to craft fair and reasonable rules for short-term rentals which help grow tourism. We are committed to doing the same in Malaysia and look forward to continuing to work collaboratively with the government on developing the right rules for Malaysia that grow tourism.

Mich Goh is Airbnb’s head of public policy for Southeast Asia.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.