Unwelcoming sharing economy

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Leading hotelier says it is impossible to wipe out illegal accommodation completely given the difficulty in regulating online home rental platforms

“It is very difficult to regulate them, in my opinion; it is difficult for the government to completely crack down [on illegal accommodation],” said the president of the Macau Hoteliers & Innkeepers Association, Chan Chi Kit.
Business Daily discovered that one of the popular Chinese short-term home rental sites – Xiaozhu.com – has some 52 listings in Macau, with the majority located in the NAPE area.
The Director of Macao Government Tourism Office, Maria Helena de Senna Fernandes, reiterated last month that accommodation provided by online home rental sites such as Airbnb, is considered illegal given the current legal frame.
According to the related clause, lawbreakers are subject to a penalty ranging from MOP200,000 (US$24,875) to MOP800,000, while tenants of illegally operated inns would be penalised MOP3,000.

Not a threat
During the recent Golden Week, tourists said that the 5-star Parisian Hotel Macao room price hit MOP2,000 per night, Business Daily reported previously. Chan said room prices during this year’s longer than usual National Day Golden Week had increased by 10 per cent year-on-year, but noted that the price was lower last year.
He explained that the high room price during holidays depended upon the level of occupancy rate and that hotels’ price strategies differed.
Asked whether illegal accommodation would impact the city’s hotel industry given the average price stood at around RMB460 during normal days, according to the listings prices on Xiaozhu.com, Chan said the high occupancy rate of local hotels is a sign of no impact, while saying that there is still business for these unlicensed inns.
“There are too many visitors coming, the [MSAR] Government is always doing something but are they able to crack down on all of them? I don’t think so,” said Chan. “Many Chinese tourists would be willing to live in these houses given the low  prices.”
Chan further said that on normal days some of the city’s 5-star hotels would provide great offers.
“Like Sands – they are promoting MOP599 per person with two-way ferry tickets, so a room for two people meaning MOP1,200 and its 5-star hotels; for 2-star hotels they offer MOP500 to MOP600 per room,” the president pointed out.
Meanwhile, with the recent release of the Macao Tourism Industry Development Master Plan estimating that visitor growth would at least reach 33 to 35 million by 2025, Chan said the growth of hotel room supply is faster than the growth in number of visitors thus “the competition within the hotel industry would get fiercer and the level of price movement would get narrower.”

Legalising online home rentals
“I think it would be very difficult for the government to legalise online home rental sites,” said the hotelier, while adding that the government has a strong stance of not revising the legal system for hotel operation.
Noting that there are several consortiums from Hong Kong who are interested in investing in the hostel business in Macau, the president said that the industry had previously discussed with the government about lowering the standard requirements in the clause to allow the operation of hostels.
“They [the government] just don’t [want to lower the standards] . . . [with] all hotel rooms consisting of a maximum of two beds in one room and every room must have a window,” said Chan.
In Mainland China, there are several home rental sites such as Tujia.com, Xiaozhu.com, Mayi.com and Muniao.com, with the transaction value reaching RMB8.78 billion in 2016, according to data gathered by iResearch based in Mainland China.
Airbnb, the U.S.-based home rental online platform also stepped into the Chinese market in August 2015, focusing on the overseas travel market.
“I think Macau has its own vision of tourism,” said Chan. “Meaning they won’t introduce [hostels or online home rental] just because other places have it.”