Airbnb responds to criticism from business mogel Heinecke

Asia: Airbnb has responded to a letter to the Minister of the Interior Bangkok by hotel and business mogel, Bill Heinecke, in which he castigated the short-term rental platform’s stance as “irresponsible” following its partnership with Thailand’s government.

Airbnb first partnered with the Thai government in July 2018 to boost overall hospitality standards in the country, however Minor Group chairman and Group CEO Heinecke said he was “concerned that such collaboration could send a wrong message in respect of the regulatory decision on short-term rental in this country”.

The letter from Heinecke is as follows:

“Your Excellency,

“As one of the world’s leading travel destinations, Thailand’s policies should be up-to-date as those of the top destinations in the world. Minor International has been working with various government officials and agencies under different administration for several years in efforts to move the policies forward.

“Regarding the recent news coverages on the partnership between the Interior Ministry’s Department of Local Administration (DLA), Government Savings Bank (GSB) and Airbnb in an effort to promote and train homestay operators nationwide, I am very concerned that such collaboration could send a wrong message in respect of the regulatory decision on short-term rental in this country.

“Despite the direct benefits which go in line with the government’s directions to promote second tier cities, I believe there are many other avenues that the government can operate. Safeguarding the interest of residents in private properties as well as tourists and protecting the image of Thai tourism should be top priorities.

“To recap the outstanding issues, Airbnb operates without a hotel licence and does not comply with fire safety, security, and privacy standards at the expense of the residents and hotel operators. Many countries such as Japan, the Netherlands, Germany, Singapore and several US states amongst others have enforced law regulating Airbnb’s commercial practices. The most recent incident was the protest of French hotel groups against the new partnership between the International Olympic Committee and Airbnb for the Paris 2024 Summer Olympics Games. French hoteliers have long opposed Airbnb as the industry-disrupting platform, citing that the home rental platform is taking advantage of minimal oversight to undercut their business. In Thailand, we have not seen any concrete action taken by the Thai government to protect the public interest and those of the many major investors in the hotel industry in a meaningful way.

“Moreover, it is still at best unclear whether Airbnb pays due taxes on its income derived from Thailand. Registered hotel operators pay corporate income and tourism taxes to Thailand which go towards tourism infrastructure. Airbnb earn a commission when room owners rent out rooms. There are allegations made by various media, industry experts and academic sources that these commissions are not taxed by the Revenue Department and hence do not contribute to the public interest of the country.

“The abovementioned matters are detrimental to our tourism and economy at large. While they have not been sufficiently addressed, such collaboration by our government or state agencies with Airbnb sends an incorrect message to the public and to the world, and is equivalent to the policy makers’ nod of approval towards these corporations’ practices.

“Minor International would like to call for a strong commitment, proactiveness, and consistency of the government in creating a level playing field in the tourism sector and protecting the public interest against the destructive commercial practices of Airbnb.

“It is important to note that the difficulties to control, regulate, and monitor these home-sharing activities are putting the country’s tourism at risk. An accident involving tourists may damage the host country’s reputation. This is more important in Thailand than in most places because tourism is such an integral part of our economy. A clear regulatory framework for Airbnb and other similar activities should be issued. They should be subjected to the same standard, tax system, safety requirement and other regulations as those that applied to hotel operators,” added Heinecke.

Requesting its right to reply, Airbnb responded to the letter by Heinecke with its own statement by the head of public policy for Southeast Asia, Mich Goh:

“While we agree new rules for short-term accommodation need to be developed, we strongly disagree with some of the policies and incorrect claims put forward by Minor Group.

“It is particularly disappointing to see such a big hospitality company oppose a partnership designed to help local Thais start their own legal homestay business.

“Airbnb wants to be a good partner to government and we are working hand in hand with various departments to empower local communities and promote tourism in emerging destinations.

“Through our partnerships, we have delivered workshops in places like Saraburi and Nakhon Si Thammarat to help locals start their own homestay business, which have included an overview of what rules hosts must follow and how they can host in the most responsible manner possible.

“We have also listened to local communities and authorities and suggested balanced and forward-looking regulatory principles for short-term accommodation in Thailand.

“We look forward to working closely with local authorities to develop regulations that work and ensure local communities share in more of the benefits of tourism.

BACKGROUND INFORMATION:

“Airbnb’s proposed regulatory principles include:

“Simple and online national-level registration – A simple, swift and online registration system for short-term accommodation to ensure compliance and promote high safety standards.

“Differentiated regulation – A differentiated – rather than one-size-fits-all – approach to regulation which distinguishes between the various types of short-term accommodation activity. For example, regulations should differentiate between someone sharing a room in their home, their own home occasionally or someone with a vacation rental for full commercial purpose.

“Industry-wide approach – There should be an industry-wide approach to regulation and close cooperation between all industry participants and regulators in implementing regulations.

“Tough but fair rules for bad behaviour – The overwhelming majority of hosts and guests are good neighbours and respectful travellers, but there should be penalties that target extremely rare instances of bad behaviour.

“Airbnb follows the rules and pays all the tax we owe in the places we do business. Our community-based model where hosts keep up to 97 per cent of the price they charge means the overwhelming amount of money generated by our platform stays with local hosts in local communities.

“Our community-based model also means local communities share in more of the benefits of tourism. Our modelling shows the local Airbnb community of hosts and guests generated over THB$33.8 billion in estimated direct economic impact in Thailand in 2018, and on average Airbnb guests say 46 per cent of their spending occurs in the neighbourhoods where they stay,” added Goh.

Airbnb also announced a partnership last May with the Government Savings Bank [GSB] to help train up hospitality entrepreneurs for the future.