Online travel platforms raise concerns with Penang government over short-term rental plans

Media statement to be attributed to: Chris KerinManaging Director, ATTIA

SINGAPORE, October 6, 2022 /PRNewswire/ — The Asia Travel Technology Industry Association (ATTIA) and its Members recommendations submitted to the Penang State Government (Local Government Division) on October 6, 2022about the proposal Short Term Rental Guidelines for Strata Properties in Penang (“Garis Panduan Pengoperasian Tempat Inap Persendirian Di Skim Hartanah Berstrata”). This follow a counseling session between ATTIA and Penang officials on September 15, 2022where we were asked to submit detailed recommendations.

With major online travel platforms such as Airbnb, Agoda, Booking.com and Expedia among its members, ATTIA expressed deep concern about the draft guidelines, which severely restrict the ability of short-term rental accommodation (STRA) hosts to house guests in properties in Penang. At a time when Penang is trying to recover its valuable tourist industry, such policies would stifle tourist arrivalsand also send mixed signals about Penang commitment to attract tourists and digital nomads.

Main recommendations of ATTIA

To ensure that the STRA sector is properly managed, ATTIA recommends that the Penang State Government take a strong regulatory approach, which will provide certainty for regulators, industry players and local communities. Our main recommendations are:

  • (a) Allow building residents to decide whether STRA should be prohibited: Current guidelines would prohibit STRA strata unless approved by JMB/MC. We argue that STRA should instead be allowed by default in commercial and residential properties. With a 75% vote, residents can already use the Strata Management Act 2013 to pass bylaws on whether STRA should be restricted in specific buildings based on local needs (for example, setting the maximum number of nights one guest can stay).
  • (b) Mandatory Code of Conduct: Instead of imposing strict restrictions on the STRAs in the properties of the strata, introduce rules for hosts and guests with a code of conduct. This could set minimum standards for the behavior of hosts and guests to combat noise and nuisance.
  • (c) Digital check-in system for guests: A centralized digital registration system could be introduced to make registration (and renewals) clear and simple for new hosts.

By following these best practices, Penang could offer an STRA system that meets international standards. It will even make more attractive and competitive for tourists and digital nomads – especially when Malaysia tries to attract such travelers (for example, with the DE Rantau program).

ATTIA’s alternative recommendations

However, if the above recommendations are not possible, ATTIA at least calls on the Penang State Government to review these alternative recommendations:

  • (a) Not imposing the 3 day per week limit for STRA strata: We especially oppose this arbitrary limit. Since STRA customers typically make longer bookings and spend more money within local communities, these limits would result in Penang miss out on the wave of digital nomads and sustainable travel. Moreover, it almost seems unable to properly enforce “night limits”given the number of ongoing STRA transactions.
  • (b) Allow STRA to run by default: Imposing a blanket ban on STRA strata would only increase the administrative burden for both hosts and local communities. This is especially true as the proposed processes include manual documentation and would require hosts to endure lengthy JMB/MC voting and verification processes.
  • (c) Remove the requirement that only Malaysian citizens can host: We believe that each owner has unique experiences to share with visitors to Penang. The requirement would exclude taxpaying regular residents in Malaysia who are not citizens to share accommodation. It would also be difficult to fully enforce this policy, as non-citizens or permanent residents could simply find a proxy to register on their behalf.

Ultimately, the majority of STRA hosts are individuals, not businesses. These barriers would make very difficult for genuine hosts to comply. Instead of excluding tourism, it is better to tackle problems such as noise and nuisances in work more closely with STRA platforms to address the root causes.

About Asia Travel Technology Industry Association (ATTIA)

ATTIA represents companies operating in the travel and tourism sector in the Asia Pacific region, focused on technology and innovation. Our members include Agoda, Airbnb, Booking.com, Expedia Group, Amadeus, Travelport and Skyscanner. Visit asiatraveltech.org for more information.

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