Some Musings On Corporate Travel Planning In Asia

Introduction

You may associate business travel with a lot of stress even if you might not actually go on the trip. This is because you might have to plan your bosses’ or colleagues’ trips at short notice. Corporate travel planning certainly involves a great deal of hassle, from booking flights and accommodations as well as minimizing costs for your company. Even travel arrangements to neighboring Southeast Asian countries may give you headaches because each Southeast Asian country has its own set of government regulations and unique hospitality environment. On a regional basis, traditional players such as hotels and travel agencies still continue to grace the hospitality landscape for many a business traveler. To make things even more complex for you in booking a suitable accommodation for your or your co-workers’ business travel needs, the emergence of Airbnb has greatly revolutionized the hospitality industry in Southeast Asia and in the world by introducing more competition for traditional hotels as well as providing more accommodation options for travelers. While you cannot get rid of the necessary evil of corporate travel planning, your pre-arrangements will be a lot less stressful if you know the unique dynamics of the hospitality landscape in the various Southeast Asian countries.

Government Regulations

The laws governing the short-term home-sharing/rental market in Southeast Asia have been comparatively fluid and have taken into account (in varying degrees) the interests of various pockets of society. Notably, the authorities in densely populated Southeast Asian cities like Singapore and Bangkok have voiced their concerns for the security and peaceful living of residents in private housing estates in the said cities. Moreover, Airbnb accommodation options pose as viable threats to existing hotel options in these cities. Therefore, in order to safeguard the interests of traditional hotels, the Singapore and Thai authorities have imposed limits regarding short-term rentals. For example, Singapore has deemed short-term rentals (3 months or less) as illegal in 2019, after four years of discussions with Airbnb representatives.Similarly, the Thai authorities and groups such as the Thai Hotels Association (THA) regard the Airbnb business model as an unwelcome threat to Thailand’s tourism and hotel landscape. As a result, the Thai government has cracked down on short-term offers for rent in areas like Phuket where there is the travel and hotel industry remains a major part of the economy.

To make matters even more complicated, one would have to consider the Hotel Act and the Condo Act in Thai law to better understand the befuddling legal terrain surrounding short-term accommodation rentals in the Kingdom.

Some people think that the Hotel Act contains terms that are ambiguous and therefore regard short-term rentals as illegal hotel operations. Nonetheless, the Hotel Act stipulates that illegal hotel operations only happen when someone has more than three units in a building. Consequently, the argument goes that if one lets out one room by Airbnb, one would not violate the law. That being said, condominiums regularly refer to the Hotel Act and its less-than-transparent terms to discourage owners from renting out their property through online platforms like Airbnb. If condominiums were to go one step further and explicitly ban short-term rentals in their own rules, then short-term rentals would be criminalized. However, if there is no mention of the prohibition of room rentals in the respective condominium rules, then renting out one’s room would not go against the law.

Additionally, Myanmar’s 1947 Immigration Act stipulates that foreign visitors on tourist visas must stay in hotels. Yet, there are Myanmar listings on short term letting platforms, exposing property owners and guests to fines and penalties if caught.

However, fret not if you want to have a more “authentic local experience”, for not all is dismal. In countries with relatively young and entrepreneurial populations like Vietnam, business-minded homeowners have rented out rooms to entire apartments to short-term guests coming to the country. In fact, many Vietnamese (especially in larger cities like Ho Chi Minh and Hanoi) have embraced the concept of the “sharing economy” to earn extra income, as testified by the growth of companies like Airbnb and Luxstay who offer short-term rental properties in Vietnam. Corresponding to the increase in supply for accommodations for guests who visit Vietnam is the increase in demand of travelers to Vietnam for cheaper and “more local” experiences while they are in the country.

Similarly, Airbnb has regarded Malaysia as its “fastest growing market” in Southeast Asia in 2018 given that no specific government law (besides the state of Penang) has been passed or proposed to regulate or legalize the Airbnb industry.

A similar rosy situation for Airbnb and other short-term rental businesses applies to the Philippines where government regulations permit the flourishing of alternative accommodations to traditional hotels. Yet, various groups within Philippine society, such as hotel associations, have urged the government to impose the same hotel tax on these private short-term rental property owners.

Cambodia, Laos and even Bali in Indonesia have rather relaxed rules surrounding short-term letting.Therefore, if you happen to travel to Indochina, Indonesia, the Philippines or Malaysia, you would have a lower chance of running into the law when you rent an Airbnb or home-sharing property for a few nights.

View From The “Bottom Up”

Besides governmental, top-down regulations in the hotel and short-term rental industry in Southeast Asia, let us look at the dynamics from the bottom-up in this fluid industry that either complements or complicates matters for government authorities.

Entrepreneurial property owners throughout the region have leveraged on the sharing economy facilitated by platforms such as Airbnb to earn some extra income. Very often, such entrepreneurial initiatives tie-in with calls for sustainable local tourism to support local economies in these countries.

For instance, around 96% of the short-term home-stay supply in Vietnam comprises entire properties and single rooms! In countries like Thailand where the authorities regulate short-term leasing of homes, people have registered their properties on short-term rental platforms without necessarily meeting the required criteria for hotels and tourist accommodations. Sometimes, these gig home-rental providers often misrepresent the conditions of their rooms and properties in order to lure guests to stay, much to the chagrin of the guests themselves when they arrive in person and see their accommodation different from what was shown on the Internet.

Prospects on Business Travel in Southeast Asia

A report done by Google and Temasek stated that more than $30 billion in annual online travel spend is in play in Asia. The boom of Asia’s corporate travel industry due to Southeast Asian economies as well as China and India have led to projected spending on business travel to $900 billion by the year 2015, a $500 billion increase from this year.

Bearing the above statistics in mind, it looks like travel prospects bode well for property owners participating in short-term leasing to foreign guests in Southeast Asia, save for existing or future government regulations that may or may not cripple profits from such short-term leasing.

That being said, on the part of the business traveller himself/herself as well as those involved in corporate travel planning, current challenges continue to hamper smooth-sailing and low-stress travel experiences. With back-to-back business travel schedules leading to a work-life imbalance, jargon-filled and mind-boggling travel policies, and a lack of local language translators in the destination country, it is no wonder why the business travelers of today might avoid the possibility of too much business travel, if any at all.

Nonetheless, the entrepreneurial DNA of many Southeast Asians that led them to rent out properties on short-term leases via platforms like Airbnb has also spurred many of them to develop innovative solutions to existing pain points in the corporate travel and travel management industries. Creative ideas that have morphed into viable realities involve, but are not limited to: user-friendly mobile payment platforms, Agile-inspired travel management platforms as well as new options for alternative accommodations. Such solutions reflect the adaptation of the travel industry to focusing on consumer experiences in the twenty-first century.

“To serve the Queen of Heaven is already to reign there, and to live under her commands is more than to govern.” — St. Jean-Marie Vianney

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