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Airbnb surviving in Taiwan despite regulations, hotels' objections

2019/02/04 11:56:21

By Chen Wei-ting and Joseph Yeh

Millions of travelers around the world, including in Taiwan, have been using the online accommodation rental platform Airbnb, a San Francisco-headquartered company whose services have been growing in popularity since it was founded in 2008.

According to Airbnb's latest survey that gave data for 2017, the company now has more than 15,000 members in Taiwan, with some 1.3 million visitors using the service, generating annual tourism revenue of NT$13 billion.

The southern city of Tainan is the fastest growing Airbnb market in Taiwan, registering an annual increase of 74 percent in the number of guests in 2017, the survey indicated.

Meanwhile, some 1.1 million Taiwanese travelers used Airbnb services overseas in 2017, an annual growth of 50 percent, the survey showed. Gina Tsai (蔡文宜), head of Public Policy for Airbnb Hong Kong and Taiwan, said travelers are looking for accommodation that is cheaper and more distinct than regular hotels, a trend that has been driving Airbnb's success.

People are seeking a more in-depth and authentic travel experience that would allow them to explore local cultures, and staying in an Airbnb can help make that possible, she told CNA in an interview late last year.

Tsai said the Airbnb business is beneficial not just to guests but also to operators and the areas in which the units are located.

Statistics show that Airbnb guests spend about 50 percent of their travel budget at shops and restaurants near their place of accommodation, she said.

(Gina Tsai, right)

However, there are no laws in Taiwan governing short-term accommodation at establishments other than licensed hotels and homestay facilities.

There are also strict standards relating to homestay accommodation, which include safety inspections and restrictions on the size of the facility.

According to the Regulations for the Management of Home Stay Facilities, the term "homestay facility" refers to accommodation services that are operated as a family sideline business, using spare rooms in an owner-occupied residence to provide visitors with a local living experience.

Unlicensed facilities, including Airbnb accommodation, are subject to a maximum fine of NT$500,000 and are required to shut down, the regulations stipulate.

The many facilities in Taiwan listed on the Airbnb website, however, fall into a technical crack in the law, according to Taiwan's Tourism Bureau.

It said that because the Airbnb company is registered in San Francisco, Taiwan authorities cannot force the removal of listings on the website, although unregistered accommodation services in Taiwan are illegal.

In many other countries and cities around the world, including Japan, Berlin and Vancouver, new laws are being drafted to legalize short-term rental and to regulate the sharing economy model, which will benefit both tenants and homeowners, according to Tsai.

In Japan, for example, short-term rentals were legalized in June 2017 in anticipation of a spike in demand for accommodation during the 2020 Olympics, she said.

Under Japan's new law, property owners are required to register their short-term rental units with the relevant government authority and are not permitted to host more than 180 overnight stays per year in total, Tsai said.

(Airbnb Tokyo office)

Hiroya Masuda, Japan's former Minister of Internal Affairs and Communications, told CNA during an interview in Tokyo late last year that the law cleared up some gray areas in the short-term rental business.

Airbnb accommodation is a phenomenon that the government has to recognize, Masuda said.

In Taiwan, Tang Wen-chi (湯文琦), an official at the Tourism Bureau, said that for a short period of time in 2017, the bureau was considering allowing services such as Airbnb to legally provide short-term accommodation but ran it into strong protests from hotel and homestay operators and eventually dropped the idea.

Ringo Lee (李奇嶽), a spokesman for the Travel Agent Association of the R.O.C. Taiwan, said such opposition arose because of the struggle hotels and homestays have been facing due to the dwindling number of visitors from China, which was Taiwan's main source of tourism for many years.

"What the government needs to do is try to attract more foreign visitors to Taiwan before opening up to Airbnb," said Lee, who runs a homestay business in Yilan.

He said he is all for diversifying accommodation services but increased competition at this time would cause the closure of more hotels because Taiwan currently does not have the high volume of tourists as Japan and such countries.

Annual foreign tourist arrivals in Japan increased from 8 million in 2012 to 20 million in 2018, while in Taiwan the number has remained around 10 million for the past four years, according to Lee.

Since the Democratic Progressive Party government took office in May 2016, visitor arrivals from China have declined sharply, dealing a blow to Taiwan's tourism, he said.

The Taiwan government said its response has been to focus more on other sources of foreign visitors.

While arrivals from China have declined, the Tourism Bureau has been diversifying its marketing in line with the Taiwan government's New Southbound Policy, according to Huang Yi-ping (黃怡平), a section chief at the bureau's International Travel Division.

In 2018, Huang said, 25 percent of foreign visitor arrivals to Taiwan were from the 18 countries in Southeast Asia, South Asia and Oceania listed in the southbound policy.

The annual increase in arrivals from Southeast Asia last year was 20 percent, with the number of visitors from the Philippines, in particular, surging 50 percent, and from Vietnam 30 percent, she told CNA.

The number of travelers from elsewhere in Asia, including Japan, Hong Kong/Macau and South Korea, also increased in 2018, although China remained Taiwan's largest source of tourism, Huang said.

Arrivals from long-haul travel markets such as Canada and Europe have also been on the rise, recording an annual growth rate of 6-16 percent in 2018, she said.

According to Japan's Masuda, the worry about the impact of short-term rentals such as Airbnbs on the established hotel industry might be unwarranted and market forces should be allowed to prevail.

He said that since the legalization of short-term rentals in his country, hotel bookings have not been affected as projected, but he did not elaborate.

"What the (Japanese) government is doing is simply providing incentives to attract more visitors to a certain place, but it up the market mechanism to decide how to keep those visitors," Masuda said.