Airbnb or hotel? A short guide for business travellers

The emergence of travel marketplaces like Airbnb has dramatically revolutionised the global hospitality industry. However, each country has its own set of laws covering the short-term rentals.

Airbnb or hotel? A short guide for business travellers

Corporate travel planning involves tasks ranging from booking flights and accommodations to minimising costs for your company. This can become stressful, even if you’re not the one doing the actual travelling. You might have to plan your bosses’ or colleagues’ trips on their behalf, and on short notice.

Aside from possible work-travel envy, making travel arrangements to neighbouring Southeast Asian countries can become a headache for another reason. Each country has its own set of government regulations and unique hospitality environments, so what works in one country may not necessarily be acceptable in another.

Regionally, traditional players such as hotels and serviced apartments still comprise the bulk of confirmed travel arrangements. But the emergence of travel marketplaces like Airbnb has dramatically revolutionised the global hospitality industry. They introduce more competition for traditional hotels, and list more (and more budget-friendly) accommodations for travellers.

Various strategies and tools are available to ease the downsides of corporate travel planning. But for the “unglamorous” aspects of business travel that you can’t control (in this case, short-term rent in Southeast Asia), you can lessen your stress by learning more about what’s going on—and then planning accordingly.

Government regulations

The laws covering the regional short-term home-sharing/rental market have been comparatively fluid. These have also taken into account (in varying degrees) the interests of various pockets of society.

Notably, authorities in Singapore and Bangkok are concerned about residents’ security and peacefulness in private housing estates. Moreover, Airbnb’s accommodations listings are viable threats to the existing hotel options in these cities.

To protect the interests of traditional hotels, the Singaporean and Thai authorities have imposed limits on short-term rentals. Despite spending close to four years in talks with Airbnb, short-term rentals continue to be illegal in Singapore, as per the Planning Act which was amended with effect from 30 June 2017.

Similarly, the Thai authorities and groups such as the Thai Hotels Association (THA) consider the Airbnb business model “a disruption to [the country’s] hotel and tourism industry.” So the government cracked down on short-term rentals in Bangkok and tourist hotspots like Hua Hin.

The Land of Smiles also implemented the Hotel Act and the Condominium Act. While the guidelines are clear for standard hotel and condominium operations, it’s not as clear-cut for those in the middle ground. So if you’re caught unaware while making travel arrangements, what was originally a simple accommodation booking could become a legal nightmare.

According to regional property blog Dot Property, the Hotel Act says that “illegal hotel operations” (basically, short-term rentals) occur when someone rents out more than three units in a building. So under the current law, those renting out just one room aren’t breaking it.

All good, right? Not quite. Condominium administrations regularly refer to the Hotel Act to discourage owners from renting out their properties online. The Condominium Act also enables them to ban short-term rentals outright if they issue terms related to it, and the majority of the residents agree to them.

Additionally, Dot Property notes that Myanmar’s 1947 Immigration Act requires foreign tourists to stay in hotels. Even if there are homestay listings for Myanmar on short-term letting platforms, “both renters and stayers could face fines or other punishment if caught.”

Relaxed rules elsewhere

If you want to have a more “authentic local experience” by staying in a citizen’s residence or rental property, don’t worry! The search isn’t over yet. There are other places in Southeast Asia where you can include short-term rentals in your corporate travel planning (as long as your company allows it).

In countries with relatively young and entrepreneurial populations like Vietnam, homeowners rent out rooms and entire apartments to short-term guests. In fact, many Vietnamese (especially in larger cities like Ho Chi Minh and Hanoi) have turned to the “sharing economy” to earn extra income. Consider this: around 96% of the short-term homestay supply in Vietnam comprises entire properties and single rooms!

The growth of short-term-rental marketplaces like Airbnb and Luxstay in the country can attest to this shift. And with this increase in affordable accommodations comes an increase in demand among travellers in Vietnam for cheaper and “more local” experiences.

Similarly, Airbnb has called Malaysia its “fastest-growing market” in Southeast Asia in 2018. While this is great for tourists and property owners, this fast growth has also spotlit shortcomings in current Malaysian laws regarding short-term accommodations (STAs). As of April 2019, proposals are being made to regulate the industry, including designating “allowable rental days” and securing prior approval from political groups.

The Philippines also gives Airbnb and other short-term rental marketplaces plenty of leeways. Current government regulations allow locals to offer alternative accommodations to tourists. However, various industry groups, such as hotel associations have urged the government to create and impose laws to limit short-term rentals and protect customers from false promises and scams.

So if you’re doing corporate travel planning for destinations like Vietnam, Malaysia, and the Philippines, your odds of breaking rental laws significantly go down. Cambodia, Laos, and Indonesia are excellent options for tourism and short-term rent as well.

The bottom-up view

Also, remember that your short-term travel arrangements will be affected by factors not yet covered by the law.

As Southeast Asian property owners have dived into the sharing economy to make money, initiatives calling for sustainable local tourism and economies have popped up. The main question regionally is how to implement fair regulations without depriving anyone of potential long-term income.

The growing global sharing economy is good for sustainability (in terms of owning and buying less while adding to overall economic growth). But the rising competition for rentals can force people to create fraudulent listings for quick cash. Their guests would then be annoyed to see their accommodations as different from what they saw and what they were promised online—and be forced to spend more than expected on hotel rooms.

Concrete answers are direly needed. And a speedy compromise will benefit business travellers, tourists, and tourism-service providers alike.

Prospects on business travel in Southeast Asia

Google and Temasek’s 2018 report on Southeast Asia’s growing internet economy stated that more than $30 billion in annual online travel spend is in play in Asia.

With that in mind, the conditions are suitable for property owners in the region to provide short-term accommodations for foreign guests. However, they must keep existing and future laws in mind to avoid legal hot water—and crippled profits.

For business travellers or those doing corporate travel planning for their colleagues, the aforementioned challenges could prevent a low-stress travel experience from happening. Prior research on and awareness of local developments can ease the overall pressure of making travel arrangements, and lead to finding a home away from home.

One more thing: Both short-term rental entrepreneurs and business travellers can benefit from other developments in the travel sector. These include user-friendly mobile payment platforms, and agile-inspired travel management platforms that can handle travel bookings, expense reporting, and data-supported insights of every employee during their trips.