KUALA LUMPUR (Nov 13): This year, we saw the wider Asean tourism ecosystem take bold efforts to make a post-Covid comeback. In Malaysia, we witnessed the government issue a digital nomad visa and put emphasis on cultural and heritage tourism in the recent Budget 2024 announcement. These efforts will improve Malaysia’s attractiveness to global travellers.

Malaysia's attractiveness as a travel destination is also enriched by its diverse and appealing range of accommodation options, which include short-term rental accommodations (STRA). In response to the rising interest of both domestic and international tourists in authentic, locally-rooted experiences, STRA has emerged as a significant component of the local tourism landscape. Post-pandemic travellers are no longer merely in search of a place to stay; they want to find accommodations that offer distinctive unique experiences and memories.

To take advantage of this travel rebound, more Malaysians are turning to hosting, which in turn has become an economic lifeline for everyday Malaysians. Indeed, the UCSI Poll Research Centre found that 89% of Malaysians are concerned about cost-of-living issues. As people continue to grapple with rising costs and inflation, many have embraced STRA as a way to earn additional income. This has directly supported the growth of micro-entrepreneurship in the tourism industry, which has empowered people to utilise unused properties to support themselves and their families.

Moreover, STRA has the potential to support Malaysia’s long-term economic growth. Firstly, STRA could help reduce the country’s significant property overhang problem, which is pronounced in prime areas such as Kuala Lumpur and Selangor. According to the National Property Information Centre, there were 26,872 excess residential property units nationwide by the first quarter of 2023 (valued at RM18.31 billion). By enabling property owners to generate income from their residential units through STRA, locals will be incentivised to purchase unsold units, thereby reducing the severity of the overhang.

Additionally, STRA contributes to the attraction of long-stay travellers in Malaysia by providing remote work-friendly amenities, such as dedicated workspaces, kitchens, and laundry facilities. Given Malaysia's aim to welcome 18 million international tourists in 2023, long-term travellers can play a pivotal role in supporting the country's efforts to revive its tourism economy. In this manner, STRA effectively complements traditional hotel accommodations, broadening the spectrum of available lodging choices and catering to the diverse preferences and needs of travellers.

The Asia Travel and Technology Industry Association (ATTIA) recently provided detailed recommendations on Malaysia’s draft national STRA guidelines, which are currently being developed by PLANMalaysia under the Ministry of Local Government Development. Our recommendations call for a regulatory approach which balances the benefits of STRA with rules that further promote responsible hosting and guest travel.

For example, we have recommended the establishment of a centralised digital registration system for STRA properties, and a mandatory code of conduct for all hosts and guests. This would introduce clear rules to foster transparency and accountability towards helping ensure a positive guest experience while maintaining community harmony. A similar mandatory code of conduct has already been implemented in New South Wales, Australia.

One aspect of STRA which is not often recognised is the influence of reviews and ratings on the popularity of individual stay options. Because each STRA property and host is unique, potential guests often rely on reviews and ratings from previous guests. In a highly competitive STRA environment, this serves as a vital feedback loop for STRA owners, and helps to ensure that standards are consistently high. This is on top of the already rigorous quality control and complaint measures rolled out by individual STRA platforms. With this culture of accountability and self-regulation, individual STRA hosts are incentivised to continuously improve.

Tourists today are more informed and discerning than before. With access to a wealth of information at their fingertips, they are fully capable of making informed decisions on their accommodations. Our social-first world today helps empower them to choose lodgings that meet their needs best — whether it is affordability, the ability to accommodate larger group sizes, or unique amenities.

As a key part of Malaysia’s tourism landscape, STRA allows tourists to choose from a diverse range of accommodation options at different price points, ranging from boutique homestays to family-friendly properties. This variety will ultimately help Malaysia create an even richer tourism landscape, casting the net to a broader spectrum of tourists.

The rise of the digital nomad trend further reinforces the importance of greater accommodation choice. The DE Rantau digital nomad visa programme is a clear indication of the government’s commitment to embracing this wave of remote workers and freelancers. Imposing harsh rules or bans on STRA would risk hindering the growth of this market and the potential economic benefits.

We must acknowledge that STRA is not a niche industry. It is now an increasingly important driver of the broader Malaysian tourism sector. From an economic perspective, STRA activities support numerous tourism-adjacent businesses in local economies (such as cafes, restaurants, and tourism services), and open up new destinations in Malaysia to tourists without the need for significant investment.

Ultimately, a balanced regulatory approach with collaboration between the government, STRA platforms, and the wider tourism industry will only stand to benefit all stakeholders. To put this into practice, the government could consider the formation of an industry-government working group on STRA, and initiate discussions on a code of conduct framework for STRA. Success for the tourism industry lies in co-existence, not exclusion, as we work towards fostering a robust and diverse tourism industry.

Chris Kerin is the managing director of the Asia Travel and Technology Industry Association (ATTIA). The ATTIA represents companies operating in the travel and tourism sector in the Asia-Pacific region, with technology and innovation at their core. Its members include Agoda, Airbnb, Booking.com, Expedia Group, Amadeus, Travelport, and Skyscanner.

Eric and Elvin Wong are the president and vice-president of the Malaysia Homestay Operators’ Association (MHOA), which represents homestay and short-stay operators across Malaysia. The MHOA helps its members ensure exceptional guest experiences through training programmes and advocacy in Malaysia’s accommodation sector.

Ivan Chong is the president of the Malaysian Vacation Rental Services Management Association (MVR). The MVR provides education, networking, professional development and a platform to make a difference for the short-term rental market in Malaysia and Asean countries.