Sharing economy

Airbnb says tougher guest house laws will create ‘lose-lose’ situation for Hong Kong’s residents and local tourism sector

Home-sharing operator says the city is taking a hardline approach to issue that could restrict options for travellers visiting Hong Kong

PUBLISHED : Wednesday, 11 July, 2018, 7:00am
UPDATED : Thursday, 12 July, 2018, 11:02am

Fighting an uphill battle, Airbnb has warned of a “lose-lose situation” for Hong Kong’s tourism sector and homeowners if a tough amendment bill against illegal short-term rentals and unauthorised guest houses is eventually passed into law.

The leading home-sharing platform made the warning on Tuesday as the Home Affairs Bureau was due to table an amendment bill to the city’s legislature on Wednesday for first and second readings.

“We really urge the government and the Legislative Council to reconsider the amendments to the bill,” said Mike Orgill, Airbnb’s public policy director for Asia-Pacific.

“The new amendments will certainly restrict the ability of Hong Kong people to share their homes. It will restrict … the kind of choices travellers want from Hong Kong: unique, authentic and local experiences. I think overall it’s a lose-lose situation.”

Orgill cited a survey commissioned by Airbnb and conducted by global measurement company Nielsen on more than 800 respondents in June, saying 77 per cent opposed what they called the “restrictive” law, while 65 per cent of Hongkongers said they would be interested in sharing their home on Airbnb if legislation permitted it.

Under the Hotel and Guesthouse Accommodation (Amendment) Bill, the Hotel and Guesthouse Accommodation Authority would be empowered to crack down on short-term home rentals and unlicensed hotels and guest houses.

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A strict liability offence would be introduced to hold the owners of premises criminally liable if there was evidence showing their flats were used for the illegal trade without a statutory defence. Maximum fines for operating unlicensed guest houses would be increased from HK$200,000 to HK$500,000 and imprisonment increased from two years to three years.

The authority would also be able to apply for a search warrant to allow officers to break into and raid flats suspected of being unlicensed holiday rentals.

Under the current law, premises that offer sleeping accommodation for a fee for a period of less than 28 days must be licensed.

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The government move is backed by hoteliers as they called for tougher sanctions on Airbnb users. Currently about 9,000 properties from 5,000 hosts in the city are listed as temporary lodgings on Airbnb. Most were flats with each host getting about HK$25,000 (US$3,180) in rental income in a year on average. Last year the average rental period of Airbnb lodgings was about 40 nights in Hong Kong.

Last year, about 450,000 visitors used Airbnb for accommodation in the city, and the firm said this generated HK$2.6 billion in economic activity.

Orgill said they had met some officials and made two submissions but the government refused to accept their views.

“The Hong Kong government is really the hardliner here,” he added. “It takes probably the most conservative and restrictive attitude I’ve seen anywhere in the region.”

But he vowed to continue to reach out to officials and lobby for lawmakers’ support as he criticised the bill as unfair for failing to take homestay lodgings into consideration.

“The bill is based on a public consultation which took place four years ago and no longer serves as a reliable and fair ground for the amendments,” he said, adding that they hoped the government would conduct an updated consultation and include home-sharing lodgings as a new category for regulation.

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Tourism sector lawmaker Yiu Si-wing argued that Hong Kong was not suitable for running home-sharing businesses due to the densely-populated environment.

“For short-term rentals, the flats need to be installed with fire safety and security devices,” he said. “These things are not easy as the premises owners need the approval of other owners living in the same building. Home-sharing will create neighbourhood nuisance and safety issues.”

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A bureau spokesman said the existing law already regulated premises operating homestay lodgings through home-sharing platforms. But Orgill said it took more than 400 days to obtain a licence which is not conducive to a home-sharing model.

“Airbnb has also proposed the introduction of a ‘risk management scheme’ to determine the risk level of the premises by the size of the residence, the maximum number of guests per stay, and the maximum number of nights per stay,” the spokesman explained.

“In fact, the Office of Licensing Authority under the Home Affairs Department has always adopted a flexible and pragmatic approach in processing licence applications, and will specify safety requirements taking into account the scale of operation and the type of premises,” he added.