Airbnb’s Policy Recommendations for Post-COVID Economic Relief
The outbreak of COVID-19 has clearly had a painful impact on the Malaysia tourism industry, including our Malaysian host community in the near-term.
Airbnb applauds the Malaysian government’s efforts to provide robust economic relief for businesses and individuals affected by the pandemic.
In particular, we welcome the incentives dedicated to the tourism sector in the fourth round of Malaysia’s stimulus package, PENJANA, including the tourism tax exemption from 1st July 2020 to 30th June 2021 and the allocation of RM1 billion PENJANA Tourism Financing (PTF) facility to finance transformation initiatives by SMEs in the tourism sector.
As the government is developing the short-, medium- and long-term economic recovery plan, we encourage the Malaysian government to continue ensuring the inclusion of small and micro-entrepreneurs involved in the tourism industry through new business models and platforms in its support and relief responses.
To further build on the Malaysian government’s existing measures supporting the tourism sector’s recovery, Airbnb has proposed to the Malaysian government several policy recommendations for consideration to help everyday people and small business operators whose financial security has been put at risk by the COVID-19 epidemic.
We have asked the government to consider the following:
- Include STRA hosts in key incentives. Given the significant role short-term rental accommodation hosts play in driving Malaysia’s tourism industry, we recommend extending several key incentives dedicated for businesses in the tourism sector under the economic stimulus packages to Short Term Rental Accommodation (STRA) hosts (both individuals and SMEs). These incentives include:
- The postponement of tax instalment payments to affected businesses in the tourism sector beginning 1 April 2020 to 31 December 2020
- RM1 billion PENJANA Tourism Fund (PTF) facility to finance transformation initiatives in the sector
- One-off payment of RM600 and personal income tax relief of RM1,000 on expenditure related to domestic tourism until December 2021
- Digital vouchers of up to RM100 to all Malaysians for domestic tourism purposes to be enabled for Airbnb bookings
- Extend the moratorium on loan repayments. As many affected Airbnb hosts rely on booking income to help pay their mortgage, we also encourage the government to consider extending the moratorium on loan repayments at least until December 2020.
- Unlock the potential of the sharing economy. The special incentive allocated to players in the sharing economy, specifically to the e-hailing industry, is a welcomed plan. We also request the government to consider extending the one-off cash assistance being provided to e-hailing drivers to Airbnb hosts.
Airbnb is committed to supporting the Malaysian government in weathering this health and economic crisis and taking care of our community of Malaysian hosts, many of whom are ordinary individuals and micro hospitality entrepreneurs, and guests.
Since the start of the global pandemic, we activated our Extenuating Circumstances policy globally, allowing guests and hosts to cancel reservations penalty-free. Airbnb employees have donated USD $1 million from their own pockets to kickstart a Superhost Relief Fund for hosts struggling to make ends meet. Totalling USD $17 million, USD $9 million of which contributed by Airbnb’s founders, the Fund has allowed eligible hosts who are facing financial difficulties to receive grants of USD $5,000.
The innate desire for humans to travel and explore will never go away, and we believe Airbnb’s platform will enable more people-to-people exchange than ever before when travel rebounds. Airbnb and our community will continue to play an important part in the tourism sector in Malaysia in the years to come, and we stand ready as a committed partner to the Malaysian government to create and implement policy solutions to support the travel and tourism economy, together with our Airbnb community.
Below are the specific details of Airbnb’s key policy recommendations to the Malaysian Government.
- Extension of the key incentives under the economic stimulus packages to STRA hosts, both individuals and SMEs
Airbnb calls on the government to extend the following tourism related incentives announced in the first stimulus package to all businesses in the tourism industry, including businesses and individuals operating in new business models and platforms:
|Postponement of tax instalment payments to affected businesses in the tourism sector beginning 1 April 2020 to 31 December 2020.||This incentive was introduced under the first stimulus package (1 April to 30 September) and it is now further extended under the fourth economic package (1 October until 31 December).
Despite their active roles as players in the tourism industry, Airbnb hosts are currently not entitled to the tax deferment as it is not considered as one of the businesses in the tourism sector. Airbnb hosts are excluded because the short-term residential accommodation (STRA) activity is yet to be regulated in Malaysia.
Instead, Airbnb hosts are only entitled to enjoy the shorter period of tax deferrals of 3 months given to all SMEs under the second stimulus package beginning 1 April 2020.
Airbnb submits that the incentive should be extended to Airbnb hosts, and those involved in STRA activity be considered as “businesses in the tourism sector”. Such a move is crucial to enable all players to utilize the much-needed incentives to support and revive their businesses. This is also to ensure that the policy intention of the stimulus package is achieved, which is “to assist businesses and individuals in the tourism businesses most adversely affected” by the pandemic, despite their business model.
|RM1 billion PENJANA Tourism Financing (PTF) facility will be made available to finance transformation initiatives by SMEs in the tourism sector||Although the details on the implementation of PTF will be announced in July 2020, Airbnb understands that its hosts will be excluded from the incentive due to the unregulated nature of STRA activities.
Airbnb submits that the incentive should be extended to Airbnb hosts, and other unregulated players in the industry. Such a move is crucial to enable all players, who had contributed tremendously to the Malaysian economy before the pandemic hit, to utilize the much-needed incentives to support and revive their businesses.
Airbnb further submits that PTF should be extended to non-SME players, including the individual hosts as their income was also severely affected during the pandemic. As individual business operators, individual hosts may not be entitled to benefit from incentives allocated to SMEs. Cash handouts could provide some financial relief at the time of difficulties.
|One-off payment of RM600 each to taxi drivers, tourist bus drivers, tourist guides and registered trishaw drivers||Airbnb submits that the incentive should be extended to the individual hosts as their income was also affected during the pandemic. As individual business operators, individual hosts may not be entitled to benefit from incentives allocated to SMEs. Cash handouts could provide some financial relief at the time of difficulties.|
|Personal income tax relief of up to RM1,000 on expenditure related to domestic tourism until December 2021||Airbnb calls on the government to utilize all channels and work with all the players to drive a collective effort to revive the tourism economy. To this end, Airbnb submits that the personal income tax relief on expenditure related to domestic tourism should include the expenditure on Airbnb bookings.
The extension of this incentive to Airbnb bookings will help to boost local tourism as travelers are presented with more options to suit their preference. In total, 4.0 million guests stayed with Airbnb in Malaysia last year, representing 8.8 million guest nights with an average length of stay in Airbnb accommodations of 2.2 nights. 65% of Airbnb guests were domestic.
|All Malaysians will be eligible for digital vouchers for domestic tourism of up to RM100 per person for domestic flights, railway and hotel accommodation.||Airbnb submits that the use of digital vouchers for domestic tourism must be extended for Airbnb bookings.
The extension of this incentive to Airbnb bookings will help to boost local tourism and better support small entrepreneurs in local communities as travelers are presented with more options to suit their preference. In total, 4.0 million guests stayed with Airbnb in Malaysia last year, representing 8.8 million guest nights with an average length of stay in Airbnb accommodations of 2.2 nights. 65% of Airbnb guests were domestic.
- Extension of moratorium on loan repayments and the cash handouts
Given the current challenges faced by the tourism players, and based on the projection that the global tourism industry might take a while to recover, Airbnb calls on the Malaysian government to consider extending the existing moratorium on loan repayments beyond the initial six month period, at least until December 2020.
Airbnb hosts are already benefiting from this incentive as many of them rely on the income from Airbnb activities to pay mortgages. The extension of the moratorium will provide the necessary relief to the hosts from their financial obligations, especially for those whose income depends largely on the proceeds from the hosting activities on the Airbnb platform. Given the prolonged nature of the pandemic, Airbnb also encourages the government to provide additional cash handouts to individual business operators in the tourism sector including individual Airbnb hosts.
- Unlocking the potential of the digital and sharing economy in the hospitality sector
Airbnb welcomes the Malaysian government’s plan to facilitate greater utilization of digital economy tools in the ‘new normal’. Airbnb also applauds the specific economic incentive allocated to the players in the sharing economy, specifically to the e-hailing industry. As Airbnb activities are also driven by the sharing economy model, Airbnb submits to the government to consider extending the one-off cash assistance of RM500 to 120,000 e-hailing drivers to Airbnb hosts.
Moving forward, Airbnb calls on the government to further encourage efforts to unlock the potential of the sharing economy in the hospitality sector. Such an economic model is a powerful engine that can enable individual Malaysians to earn a livelihood. Malaysia is already well-placed to embrace the sharing economy given the high internet penetration rate of 90%. As Malaysia is a major tourist destination, Airbnb believes that more Malaysians should participate in the sharing economy in the hospitality sector to tap on its economic potential.