The Accommodation Business: New Regulations or New Nuisance?

Ever since the tourism industry started to rebound, accommodation businesses have been accelerating to fulfil the travel needs of domestic and international guests. Profit is substantially generated from revenge spending and open borders. The question is, how has the business operation improved with the subsiding of COVID-19?

Zainal Zikri, Founder of MyRehat shares his insight on managing an accommodation business in 2023.

What is it like being a host?

Whether you run a hotel, home-sharing or any business related to accommodation, you must have gone through some struggles in the last two years. Been there, done that. And if your business survives the disruption, hopefully you are starting to enjoy a decent return on investments (and resilience). 

MyRehat has hosted thousands of guests in our lovely properties and it has been a wonderful experience (except for that 1% of guests from hell :P). We love providing tips on what to do and where to eat around our accommodations. As with everyone in the hospitality business, we too have ups and downs, but having passion and patience is a must and it is the major reason we are still going strong.

States’ New Regulations

If you are running a home-sharing or now the preferred term – short-term rental accommodation (STRA), new changes are coming which will affect us in this industry. Compared to 2019 when MyRehat first started, regulations were less likely to hamper the growth of the business. Now that the pandemic mode is over, new regulations will be imposed which might be a huge inconvenience.

The Penang Rules

Penang recently became the first in the country to propose new rules for STRA in strata buildings which will take effect on residential and commercial titles buildings in the state. The new guidelines also suggest limiting the length of guest stays to a maximum of only 3 days and a host can only rent his or her home for a maximum of 180 days per year.

However, Airbnb has urged the state government to reconsider and adopt a less aggressive approach. This is to not discourage tourism progressive pick up and job growth in the near future.

The KL Rules

In a recent online seminar organised by Kuala Lumpur City Hall (DBKL), it was deliberated that STRA can only be permitted if 75% of strata scheme owners agree to allow it in an apartment building. 

Votes will be cast via a balloting system during AGM and only those who do not have any arrears of maintenance fees can cast their ballot. The strict regulation will also pressurize management bodies to take action against owners who rent out their properties for STRA activities.

Condominiums’ New Guidelines

Since many have realised the monetary value of STRA activities, some condominiums start to exercise their authority by charging expensive fees to operate in their building. This will probably be the biggest factor hindering STRA for new players compared to the states’ regulations.

For example, hosts are required to pay a high amount of security deposit and additional administrative fees for each property unit. Some properties are restricting the utilisation of car parks or mailboxes which will add to the host’s operational costs.

Still want to be in this business?

If your answer is YES, be ready to remain adaptable and pivot with creative ideas to enhance your business. 

Barriers to entry for new operators are wide and there are places where the new rules and regulations have yet to be applied. You just need to work a lot harder to find these gems.

It may not be so bad, as these rules may lead to professional hosts operating in this business with better services and higher-quality accommodations. Fingers crossed! 

Stay tuned for our next article as we will provide a more in-depth review of a property MyRehat operates at.

In the meantime, browse our website which features great homes, food and activity options for a more curated local experience. Don’t miss out on an exclusive discount when you book your next stay at!