According to media reports, the government is studying possible amendments to the Hotel and Guesthouse Accommodation Ordinance, which may have a huge impact on the local business of short-term lodging rental platform Airbnb.
Simon Lee Chao-fu, convenor of the Sharing Economy Alliance, talks to the StartUpBeat platform of the Hong Kong Economic Journal (HKEJ) on how such amendments to the ordinance could affect the operations of short-term lodging rental platforms.
HKEJ: Do you think amendments to the Hotel and Guesthouse Accommodation Ordinance would affect the business of Airbnb?
Lee: The answer is a clear yes. There has always been “short-term tenancy” in Hong Kong, like those in Cheung Chau and Tong Fuk on Lantau Island.
The government hopes to rely on such amendments, which would enable the use of, say, a captured screenshot of online images as prima facie evidence for submission to the court to sue the lessor of the lodging, the online platform used, and even the tenant or guest.
But short-term tenancy has been going on for many years; it will be hard to eliminate.
Even after the amendments are passed, the short-term lodging rental operators can switch to other channels to lease their properties, such as through WhatsApp.
Things will then get less transparent and that could have some negative consequences. I don’t think amending the ordinance is the right thing to do.
HKEJ: In the past, landlords used Airbnb to lease their vacant homes to others on a short-term basis. What about now?
Lee: Airbnb has gradually evolved from a short-term rental platform to a tourism platform. Its services are no longer limited to listings of short-term lodging facilities.
The company has rolled out a new option of hosting unique experiences on Airbnb. This is to share with guests one’s experience, passion, expertise, or special things in the community. Or one can also host for a non-profit cause. This new option allows travelers to integrate into the life in their respective destinations.
So now, even people with extra free time can be a source of making money. This is what gig economy is about.
HKEJ: There are currently a few licensed hotels and guesthouses on the Airbnb platform that start to operate holiday flats under their own brands. As the whole platform is getting bigger, does this mean greater difficulty in regulating the business?
Lee: It’s just the opposite. The larger the platform, the easier it is to regulate, and the more cost-effective.
HKEJ: Airbnb has been in Hong Kong for quite a while. I’ve heard of some negative views from Hong Kong’s hotel industry but those are not strong. I’ve also known of complaints from neighbors. What’s your view on this?
Lee: If fire safety is the key issue, projects such as subdivided flats in industrial buildings should be forbidden on platforms like Airbnb.
As far as regulatory requirements are concerned, the government should only deal with the most basic aspects, such as fire safety, and let industry participants take care of the rest.
HKEJ: Some suggest Airbnb start with village houses in Hong Kong. What do you think?
Lee: There were some people suggesting partnership between Airbnb and licensed hotels or guesthouses, as well as between Uber and Hong Kong’s taxi industry. This is apparently wrong because asset structure would affect economic behavior. The local taxi industry has its unique characteristics; it has problems such as cabbies refusing or selecting passengers.
Likewise, if certain places could only be leased out, I believe the result would be twisted. If Uber can only hail taxis for users, the undesirable acts of taxi drivers would remain unchanged. If Airbnb can only list village houses, that will also affect the ecology of the platform. I consider this direction inappropriate.
Note: The views expressed in this interview are personal opinions of the industry professional and do not necessarily reflect those of HKEJ.
The full article appeared in the Hong Kong Economic Journal on Oct. 27
Translation by Jonathan Chong with additional reporting
[Chinese version 中文版]
For the complete video interview, please visit http://startupbeat.hkej.com
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