Industry players want Airbnbs regulated as hotel rate hikes loom
Published on: Thursday, December 07, 2023
By:
FMT, Natasha Busst
Malaysia Budget and Business Hotel Association president Sri Ganesh Michiel says Airbnb rates will not be affected by the sales and services tax hike as they are not registered as businesses. (AFP pic)
PETALING JAYA: Industry players are urging the government to swiftly regulate Airbnbs as hotel prices are expected to rise by 30% next year.
Malaysia Budget and Business Hotel Association (MyBHA) president Sri Ganesh Michiel said that Airbnbs pose a significant threat to the survival of the hotel industry.
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He said that as the sales and services tax (SST) is increasing from 6% to 8% next year, hotels need to raise their rates to cover rising operational costs.
However, Airbnb rates will not be affected by the tax hike as they are not registered as businesses, he said.
“Airbnbs pay residential rates for electricity, water, and WiFi, so they can sell rooms at cheaper rates.
“Due to this, customers will tend to choose these types of accommodation. But these places are illegal. They don’t have business licences and there are no laws governing them,” he told FMT.
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On Nov 3, Malaysian Association of Hotels president Christina Toh said that hoteliers in Malaysia might raise room prices by 30%, owing to the increase in SST next year.
The increase in SST rate announced by Prime Minister Anwar Ibrahim on Oct 13 will come into force on Jan 1, 2024.
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Malaysian Tourist Guides Council president Jimmy Leong said Airbnbs had disadvantaged the Malaysian tourism industry.
“On one hand, hotels need to increase their revenue so that they can set some funds aside to ensure that they can refurbish and maintain their facilities.
“But on the other hand, when prices get too high, customers will run to Airbnbs, resulting in a drop in hotel occupancy,” he told FMT.
He said the government should examine the legality of Airbnbs as these establishments might lead to a loss of revenue through taxation, ultimately impacting the tourism industry.
“If we look at neighbouring countries like Singapore and even in Penang, Airbnbs are not allowed to operate.
“They’re not supposed to be businesses in the first place, and because they are mushrooming everywhere, they are affecting legally run businesses. The government needs to look into this matter,” he told FMT.
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