Unregulated Rentals Online Sales Of Illegal Stays Threaten Visit M Sia 2026 Group

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A hotel association has raised concerns about the authorities’ lack of control over unregulated short-term rental accommodations and unchecked online sale of unlicensed lodgings ahead of Visit Malaysia 2026 (VM2026).
Malaysia Budget and Business Hotel Association (MyBHA) president Sri Ganesh Michiel claimed that lax regulations have led to a “parallel and illegal” accommodation economy.
“Unlicensed and unregulated short-term rental units, including apartments, condominiums, and private residences converted into transient lodging, operate outside of any legal framework, do not pay licensing fees or taxes, and are not subject to safety inspections.
“These entities also undermine legitimate hoteliers and tourism players who have invested significantly in complying with national and local laws and regulations,” he said in a statement.
The lack of control over these types of accommodations, he said, threatens to derail VM2026’s aspirations to reintroduce Malaysia to the world as a premier, safe and sustainable destination.
Sri Ganesh expressed concern over the lack of oversight, which has led to numerous issues, including distorted market pricing that is disadvantageous to law-abiding hotel operators.
He also warned that tourists face safety risks due to such entities’ alleged non-compliance with fire, safety, and health regulations, while weak consumer protection leaves travellers vulnerable to scams and unsafe premises.
No tax revenue
Besides residential communities grappling with disturbances caused by unchecked transient occupancy, he added that local councils and the federal government are also missing out on tax revenue.
Sri Ganesh also sounded the alarm over the “explosive growth” of online travel agencies promoting unlicensed accommodations, including via websites and social media such as Facebook, TikTok and Instagram.
“MyBHA finds it unacceptable that global and local digital platforms are profiting from illegal listings with no accountability or verification mechanisms in place.
“These platforms, driven by profits, have turned a blind eye to the presence of unlawful listings and are enabling illegal businesses to thrive while ignoring the harm caused to consumers and the licensed industry,” he added.
ADSHe stressed that Malaysia cannot afford to allow illegal operators to profit from government-funded tourism campaigns while licensed hotels are left to bear the burden of compliance, fees, taxes, and inspections.
“This situation penalises the honest and empowers the unscrupulous, sending a dangerous message to the tourism industry and damaging Malaysia’s international image,” he lamented.
Task force needed
As such, he called for the formation of a high-level inter-ministerial task force led by the Housing and Local Government Ministry and the Tourism, Arts and Culture Ministry.
The task force, Sri Ganesh said, should introduce and enforce immediate regulations for all short-term rentals.
It should also empower local authorities to consistently and firmly enforce regulations and laws without negatively impacting licensed and registered hotel businesses, he added.
Sri Ganesh said the task force should also establish minimum safety and operating standards for all accommodation providers.
He called for the Digital Ministry and Communications Ministry to also be roped in on such efforts.
In particular, he said the Digital Ministry and Communications Ministry should enforce legal responsibilities for verifying accommodations’ licensing status before allowing listings, while also introducing digital governance standards and penalties for platforms enabling illegal trade.
“Many countries around the world have already begun taking firm action to regulate short-term rentals due to their impact on housing affordability, community well-being, and the formal hospitality sector.
“Singapore, New York, Amsterdam, Barcelona, and Tokyo have introduced strict licensing requirements, limitations on the number of rental days, and enforcement mechanisms to curb illegal short-term rental activities.
“These global efforts reflect a growing recognition of the need to balance tourism growth with fair competition and sustainable urban development - an approach that Malaysia must also consider in addressing the challenges posed by unregulated operators,” he added.
DPM Ahmad Zahid HamidiIn November last year, Deputy Prime Minister Ahmad Zahid Hamidi said new guidelines to regulate short-term rentals would be presented to the cabinet soon.
Zahid reportedly said the guidelines will simplify licensing, ensure legal compliance, and address community concerns such as noise, parking shortages, and waste.
He said then that the short-term rentals are expected to drive tourism growth, with projections of 35.6 million tourist arrivals by 2026. - Mkini

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