This article first appeared in The Edge Malaysia Weekly on April 24, 2023 - April 30, 2023
As tourism rebounds and more people go away on vacation, business appears to be roaring for home-sharing platforms such as Airbnb — just one of a number of short-term rental operators that suffered when the Covid-19 pandemic struck three years ago.
Momentum has been regained going by the performance of some short-term-stay hosts. A two-room unit in Petaling Jaya, for example, can fetch a gross income of RM3,000 to RM4,000 a month — much better than long-term rental of RM1,500 to RM2,000 a month.
So for cash property buyers, the income is definitely very decent.
Even if they aren’t cash buyers, the home-sharing operation is still a good source of income for many, including a friend of mine who manages to rake in a net income of at least RM1,000 a month after deducting the monthly bank instalment, utility costs and maintenance fee. The net income earned is based on an occupancy rate of about 90%.
Where my friend’s apartment is located, there are many enquiries from foreigners, especially those from Indonesia, China and South Korea. Some are seeking medical treatment at a hospital located nearby and, thus, the apartment is well placed for a short stay.
Education is another key reason. As the place has a few private universities nearby, some parents take time off to accompany their children on their next phase of life as they embark on tertiary studies. Others — often locals — need a place to stay when they travel for corporate meetings or training.
The reasons people choose a place for short-term accommodation vary, but it is always interesting, especially if you are in the rental business.
The rebound in demand has prompted home-sharing operators to even expand their “network” — that is, they are renting more units within the same development so that they can carry out more of the short-term rental business.
Without owning a property, one also can venture into this segment, and it’s foreseeable that more people will opt to look into the potential of this hotel-like business.
The numbers speak for themselves. Airbnb recorded its first full-year profit in 2022, posting a net income of US$1.9 billion, against a net loss of US352 million in 2021.
According to its data, more travellers across Southeast Asia stayed for longer in 2022, with nights booked across the region doubling in 2022 from 2020. Year on year, longer-term stays in the region of 28 days or more on Airbnb jumped more than 2.5 times last year.
That said, all eyes now are on the specific details of the new Airbnb guidelines, which will be announced by the Ministry of Tourism, Arts and Culture soon. Hotel operators are unhappy with what they see as an uneven playing field and want the government to regulate the home-sharing platform. To be fair, even Airbnb has been urging the government to establish a clear and practical national regulatory framework for short-term rental accommodation.
The sharing concept is certainly a global trend. We definitely cannot stop the development of the likes of Airbnb, but the government needs to find a way to include hotel operators on the home-sharing platform. Just like with Grab and Uber, traditional taxi drivers were unhappy when the ride-hailing start-ups were launched. But after Grab acquired Uber’s Southeast Asian operations in 2017, Grab managed to include some traditional taxi drivers on its platform, creating a win-win solution.
To those who have balik kampong for the Hari Raya holidays or are elsewhere enjoying the festivities, maybe in a short-term rental, have a pleasant stay!
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