[Malaysia] ATTIA Meets Penang Government over Proposed Short-Term Rental Limits

On 15th September, the Asia Travel Technology Industry Association (ATTIA) and travel platforms raised concerns over Penang’s proposed Short-Term Rental Accommodation (STRA) Guidelines with the Penang State Government.

Download our Media Statement here.

The Asia Travel Technology Industry Association (ATTIA) and its members spoke with representatives from the Penang State Government (Local Government Division) on 15 September 2022, regarding the proposed Short-Term Rental Accommodation Guidelines for Strata Properties in Penang (‘Garis Panduan Pengoperasian Tempat Inap Persendirian Di Skim Hartanah Berstrata’).

With leading online travel agencies (OTAs) among its members, ATTIA expressed deep concern over the proposed Guidelines, which would severely restrict the ability of short-term rental accommodation (STRA) hosts to accommodate guests in strata properties in the state of Penang. At a time when Penang is trying to recover its valuable tourism industry, such policies would stifle tourist arrivals, and also send mixed signals about Penang’s commitment to attracting tourists and digital nomads.

To ensure that the STRA sector is properly managed, ATTIA recommends that the Penang State Government adopt a robust regulatory approach, which will provide certainty to regulators, industry participants and local communities alike. The new system should be underpinned by a mandatory Code of Conduct and a digital registration system.

ATTIA is encouraged by the Penang State Government’s willingness to make “justified amendments” in response to concerns raised by ATTIA and its members. Additionally, ATTIA was invited to share further recommendations on STRA policy, which could help adapt international best practices for a Penang context. ATTIA looks forward to sharing its detailed recommendations shortly, and hopes that the State Government will keep the door open to needed improvements.

Concerns that were raised at the meeting include:

Infeasibility of ‘night limits’: We highlighted our concern with the ‘night limits’ prescribed in the Guidelines, which would limit a host’s ability to offer accommodation to 180-days annually, and limit individual bookings to 3-days. As STRA guests typically make longer bookings and spend larger amounts within local communities, such limits would cause Penang to miss out on the digital nomad and sustainable travel wave. In addition, such limits would severely disincentivize hosts from starting their businesses, and therefore curtail the availability of STRA to begin with. They also contradict the national efforts to develop digital nomad hubs in different cities, including Penang as part of the DE Rantau program.

STRA should be allowed by default: The proposed Guidelines would effectively disallow STRA unless express permission is obtained. However, we argue that STRA should be allowed by default in both commercial & residential properties (on both the island and mainland). Without a default allowance, the impracticalities of conducting voting means potential voting sessions could occur on an innumerable basis. By imposing these onerous licensing requirements, large swathes of potential STRA hosts would also be deterred from hosting entirely. Through a 75% vote, building residents can rely on the existing Strata Management Act (SMA 2013) to pass by-laws on whether STRA should be restricted in specific buildings.

Manual and lengthy approval process: The proposed Guidelines include a host registration process which involves several manual steps, thereby increasing the administrative burden for hosts as well as local authorities. Crucially, hosts in strata buildings will have to secure at least 75% approval from residents at an AGM before they can begin hosting. The vast majority of hosts are individuals, and these barriers could make it challenging for bona fide hosts to comply. We instead propose a streamlined digital registration process, which would allow local authorities to gather more meaningful and updated data on STRA, while supporting greater compliance.

Does not address noise and nuisance issues effectively: We believe that any noise or nuisance issues would be more effectively addressed through close coordination with STRA platforms, rather than guidelines that disallow STRA activity thus limiting Penang’s broader tourism activity and potential. This could include a ‘Code of Conduct’ style of self-regulation involving collaboration with STRA platforms – which would determine and enforce norms, rules and responsibilities expected of STRA hosts and guests.

About the Asia Travel Technology Industry Association (ATTIA)

ATTIA represents companies operating in the travel and tourism sector in the Asia-Pacific region, with technology and innovation at their core. Our Members include Agoda, Airbnb, Booking.com, Expedia Group, Amadeus, Travelport and Skyscanner. Visit asiatraveltech.org for more information.