Airbnb causing money to flow out of Malaysia, local hoteliers claim

MAHO President Tan Sri Teo Chiang Hong and MAHO council members blow out candles during the MAHO 21st Anniversary Dinner in Petaling Jaya July 11, 2019. — Picture by Ahmad Zamzahuri
MAHO President Tan Sri Teo Chiang Hong and MAHO council members blow out candles during the MAHO 21st Anniversary Dinner in Petaling Jaya July 11, 2019. — Picture by Ahmad Zamzahuri

PETALING JAYA, July 12 — Money from tourists staying in Malaysia is leaving the country through disruptive accommodation platforms like Airbnb, the Malaysian Association of Hotel Owners (MAHO) president Tan Sri Teo Chiang Hong said last night.

He said that the US online hospitality broker is exempt from the tourism tax imposed on the domestic hotel industry because Airbnb’s South-east Asian regional office is in Singapore.

“Besides the outflow of money from the country, this also means the burden of paying the tax falls upon the established hotel chains,” he said in his speech at MAHO’s 21st anniversary dinner at Hotel One World here last night.

The federal government introduced the RM10 tax in September 2017 as a means to increase tourism revenue. Established hotels charge each foreign tourist the amount per night of stay while Malaysian tourist are exempt from payment.

Teo noted that Airbnb recently recorded a 100 per cent increase in its year-on-year business growth for Malaysia alone in 2018.

“This means they are taking up to 15 per cent of the total room occupancy nationwide, which poses further challenges for the hotel industry,” he said.

Teo said MAHO hopes the government will stop collecting tourism tax from them once the departure tax at airports kicks in.

“It makes no sense to keep it as the tourism tax is only collected from four- and five-star hotels and not from accommodations such as homestays.

“It would be fairer for everyone in the industry for the departure tax to be imposed instead. If the government wants a meaningful source of income, then the departure tax is the best option,” he said.

However, Airbnb told Malay Mail that its year-over-year growth from July 1, 2018 to July 1 this year was 73 per cent, and that its estimated direct economic impact on Malaysia for 2018 is approximately RM3 billion.

The government, both when it was under Barisan Nasional and now under Pakatan Harapan, have been considering taxing Internet-based commercial entities, including Airbnb.

Airbnb’s South-east Asia, Hong Kong and Taiwan general manager Mike Orgill has said the company welcomes Putrajaya’s proposal to tax its services along with other online firms.

However, Orgill called for a fair tax structure, and indicated Airbnb is willing to sit down with the authorities so that all sides will benefit.

The departure tax, to be paid by all outbound air passengers, was supposed to start June 1 but has since been deferred.

Tourism and Culture Minister Datuk Mohamaddin Ketapi concurred with Jelebu MP Datuk Jalaluddin Alias in the Dewan Rakyat yesterday for the departure tax to be postponed as it could negatively impact the Visit Malaysia 2020 campaign.

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