The Asia Travel and Technology Industry Association (ATTIA) represents companies operating in the travel and tourism sector in Asia-Pacific, with technology and innovation at their core. Our members include Agoda, Airbnb, Booking.com and Expedia Group.
The continuous innovation of travel and technology delivers significant benefits for economies, communities, businesses, and travellers across the Asia-Pacific region that positively impacts livelihoods, living standards, workplace opportunities and quality of life for citizens in the region.
ATTIA seeks to promote a deeper understanding of the policy issues that stand at the intersection of travel and technology. ATTIA serves as a resource and a catalyst for closer collaboration and information-sharing for the development of aligned industry/government priorities and vision for travel and tourism in the Asia-Pacific region.
Today, global travel is changing dramatically, as more and more consumers opt to book their own travel online and seek a wider set of choices that suit their needs. Increasingly, travellers are considering alternative accommodations, including short term accommodations (STAs), for their trips. STAs are often preferable for groups, families, and extended stays, and for travellers looking to stay in areas not serviced by traditional hospitality providers. STAs are also an excellent way of spreading the economic benefits of travel and tourism to small enterprises and local communities.
ATTIA believes that any short-term accommodation regulatory framework should promote a fair, transparent, and competitive market. STAs are typically provided by individuals or SMEs that may lack the time, resources, and capabilities to navigate complex paperwork and administrative processes. Simple, streamlined models, on the other hand, increase compliance and do not create unnecessary and cumbersome barriers for individual citizens and SMEs to enter the market. ATTIA believes the following set of four principles can enhance governments’ thinking around short-term accommodation regulations. In essence, regulations should aim to be simple, inclusive, consistent, and fair. To explain:
- SIMPLE: Regulations should be user-focused, easy to understand, and efficient to implement. Regulations should be simple, contain minimal red tape, facilitate oversight, and encourage compliance.
- INCLUSIVE: Regulations should permit a broad spectrum of short-term accommodations, from a spare bedroom to an entire vacation rental home. Broad and flexible regulations will help meet the demand and market realities of each jurisdiction.
- CONSISTENT: A simple, uniform, consistent approach prevents the risk of over-regulation and driving the short-term accommodation industry underground as accommodation providers could migrate towards non-compliant online marketplaces or social platforms.
- FAIR: Regulations should not discriminate against hosted or unhosted short term accommodations to the exclusion or detriment of the other. All types of accommodations add value to the tourism industry by meeting the needs of different types of travellers – and often reflect the different types of accommodations available in different markets.
ATTIA has seen similar policy levers included in the different regulatory frameworks introduced by governments around the world. The effectiveness of these levers varies, depending on the characteristics of each jurisdiction, but from our members’ collective experience in working with these governments, we have also derived key learnings on the best practices in leveraging these tools. Here are some of the most relevant ones:
PLATFORM LICENSING: Registration and licensing are the responsibility of hosts, not platforms.
Short-term accommodations are offered by many different kinds of online platforms – some small, some large, some local, some international, etc. As a result, it is extremely difficult to monitor and license every relevant player. The unintended consequence of requiring licenses for platforms could lead to responsible platforms being punished, while giving excessive freedom to those that do not comply, creating an uneven playing field. Onerous registration processes and overregulation of the industry could either force the industry underground or kill it off entirely. It is more effective and more efficient to require registration and licensing from hosts instead.
HOST REGISTRATION: A simple and online process encourages compliance.
Registration is a reasonable enforcement mechanism to ensure the STA industry grows safely and sustainably. The most successful registration systems implemented around the world are simple, national, and online, and therefore see high host compliance rates. Onerous registration processes and over-regulation of the industry, however, could either force the industry underground or kill it off entirely. For example, Portugal has a national portal to facilitate hosts’ registration for STR license and French cities have easy-to-use online portals to simplify the registration process for hosts.
NIGHT CAPS: Arbitrary night caps are ineffective and difficult to implement.
Around the world, arbitrary caps on the number of nights for which a property is permitted to host guests have been proven counterproductive to the growth of the STA industry. While caps may be appropriate in the context of a housing-constrained market, the cost of time and resources for governments to enforce a cap on nights outweigh the benefits. Alternative policy levers like tiering the registration fees that hosts pay based on their levels of hosting activity are easier to enforce and generate additional revenue for the government.
HOSTED & UNHOSTED STAs: Regulations should not discriminate between different types of STAs.
Regulatory frameworks should not discriminate against either hosted or unhosted STAs to the exclusion or detriment of the other. The hosted-vs.-unhosted distinction is an ineffective regulatory tool and it is very hard to ensure compliance in practice. Without highly detailed reporting and tracking, major investment in IT systems, and intrusive practices such as spot checks on hosted properties to ensure there is a host on site, a system making this distinction will be difficult to manage effectively.
STA REGULATORY FRAMEWORK EXAMPLES
Portugal serves as an appropriate reference as governments consider their STA framework. Portugal reformed its tourism laws and reduced red tape for all sectors of the industry, including the STAs. As a result, in October 2019, the World Travel & Tourism Council (WTTC) commended the Portuguese government for recognizing the importance of the tourism industry to the overall economy. The Travel & Tourism sector in Portugal grew 8.1% in 2018 — the highest rate across all of Europe.
The Portugal framework is especially effective because it is simple, inclusive, consistent, and fair.
- SIMPLE: Portugal residents who want to host are required to give an online notification at the federal level for income tax purposes. Hosts can manage their accommodation profile, including activation, changes, and account closure on the Portuguese local accommodation site.
- INCLUSIVE & FAIR: Anyone who is a resident of Portugal can share their properties, in whole or in part, with no night caps.
Given the Portuguese government’s intention for tourism growth, the framework was optimized for that purpose and specifically designed to reduce red-tape and allow for as many people to participate in the industry as possible.
Many markets have good features. ATTIA members would be happy to discuss best practices.
ATTIA partners with governments across APAC to grow tourism, including collaborating on fair regulations to attain that purpose. We look forward to continuing this dialogue across the region to ensure that we can continue to work together to help the APAC governments strengthen their tourism sectors.