Airbnb: Proposed STRA guidelines detrimental to Penang’s tourism economy

In its latest response to the Penang government’s proposed STRA guidelines, the accommodation platform has shared detailed feedback and recommended new guidelines focused on a balanced and simple regulatory approach

Kuala Lumpur, 18 January 2023 — Following the Penang government’s announcement to regulate local short-term rental accommodation (STRA) last July, Airbnb today said that it has shared detailed feedback and policy recommendations with Penang’s executive committee on its current proposed guidelines. This closely follows Airbnb’s Penang Untuk Semua initiative launched last year.

Aimed at empowering local residents, these recommendations are focused on a balanced and simple approach towards regulating STRA, and are shaped by regulations that have been effectively adopted by global jurisdictions around the world. For strata buildings with commercial titles which are already zoned for commercial activities, Airbnb’s proposed recommendations call for STRA to be allowed by default in all strata buildings. For strata buildings with residential titles, building residents should be able to continue using the existing Strata Management Act 2013 (SMA 2013), to collectively decide with a 75 percent vote via their Joint Management Body (JMB) or management corporation if any conditions or restrictions around STRA should be implemented.

Airbnb has also suggested introducing a simple and low-cost online authorization portal to ensure the registration process for Hosts is straightforward and accessible. The current proposed guidelines by the Penang Government require an onerous process via which all Hosts must have registration with the Malaysian Companies Commission (SSM) and submit physical forms to apply for additional licenses from local authorities. 

More specific recommendations by Airbnb in response to the Penang government’s proposed STRA guidelines, include:

• Do away with a suggestion on cap on booking nights, as this severely limits guest travel  and undermines ongoing efforts to promote Penang and Malaysia as a preferred Digital Nomad Hub. The Penang government is currently looking to implement a 180-night cap, and a 3 day per week guest occupancy limit.
• Allow all tax-paying residents in Malaysia to engage in short-term rental, and maximize the economic benefits from the home sharing economy. The Penang government is proposing that short-term rental can only be conducted by Malaysians, and registration with the Malaysian Companies Commission (SSM).

Mich Goh, Airbnb’s Head of Public Policy for Southeast Asia, India, Hong Kong and Taiwan, said: “We strongly believe that as tourism gradually recovers, STRA and Airbnb’s community of Hosts and guests will be a key driver for Penang’s tourism industry, and more broadly the Malaysian economy. The current guidelines proposed by the Penang government in July 2022 pose severe constraints on domestic and international travel to Penang; and will be detrimental to the state’s tourism industry and long-term economic growth.”

“Robust regulations that address key issues while appropriately recognizing and embracing STRA as part of the tourism industry will go a long way to help Malaysia capitalize on the benefits of home sharing, as the country gradually recovers from the impact of the COVID-19 pandemic and the current property overhang. More keenly, it will help everyday Malaysian Hosts with a passion for home sharing make ends meet and offset rising costs of living,” added Goh.

Michael Goh, former JMB Chairman for Penang condominium Tropicana @ 218 Macalister, shared, “From my experience, noise and nuisance issues in strata buildings can be resolved through effective JMB management instead of blanket guidelines that aim to reduce STRA activity. STRA should be allowed by default, and residents and JMBs can enact further by-laws if desired. If strict guidelines are implemented, we can expect a ripple effect of fire sales of units and idle buildings, and job losses for businesses supporting STRA. Many of us homeowners, condominium JMBs and local businesses have seen how a thriving STRA economy benefits locals and visitors, and how it can be effectively managed in strata buildings. I strongly urge the local government to come up with better and much fairer guidelines for all parties involved.”

Airbnb has previously urged the Malaysian Government to consider and support a national regulatory framework to ensure that STRA rules are uniform across the country. A national system would reduce the administrative burden on Hosts and state authorities, and encourage compliance with the STRA legislation.

Prior to the COVID-19 pandemic in 2019, STRA activities on Airbnb in Malaysia contributed to  USD125.9 million (RM 553.2 million) in Penang’s gross domestic product and  supported 5,900 jobs. Airbnb guests spent a total of RM4.4 billion in Malaysia, which included accommodation, transport and supporting local restaurants and retail stores.