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Home » TOURISM NEWS » Malaysia Urged to Regulate New Unlicensed Short-Term Rentals Threatening Visit Malaysia Year 2026 and Tourism in Kuala Lumpur, Penang, Langkawi, and Across the Nation Tuesday, June 3, 2025Malaysian tourism leaders have expressed serious concerns over the proliferation of unlicensed and unregulated short-term rental accommodations (STRA), warning that these illegal operations threaten the integrity and success of Visit Malaysia Year 2026 (VMY 2026). The president of the Malaysian Budget and Business Hotel Association (MyBHA), Dr. Sri Ganesh Michiel, highlighted that the growing presence of apartments, condominiums, and private residences converted into transient lodging without proper licensing has created a parallel illegal accommodation economy that undermines legitimate hoteliers and tourism operators who invest heavily in complying with regulations.This unregulated sector operates outside any legal framework, evades licensing fees and taxes, and lacks mandatory safety inspections, creating unfair competition and significant risks. Dr. Ganesh stressed that if the government fails to act promptly, the sustainability of Malaysia’s tourism industry and the reputation of its flagship campaign VMY 2026 will be at risk.Safety concerns are a major issue, as unlicensed accommodations often do not comply with fire safety or health standards, posing potential dangers to tourists. Furthermore, the unchecked transient occupancy causes disturbances in residential neighborhoods, eroding community welfare. Additional challenges include loss of tax revenues for local councils and the federal government, distorted market pricing disadvantaging law-abiding hotels, and weak consumer protection exposing travelers to scams and unsafe conditions.Despite numerous complaints and discussions, unlicensed accommodation listings continue to be promoted and transacted openly via online travel agencies (OTAs), classified websites, and increasingly on social media platforms. This pervasive presence in digital channels complicates enforcement efforts.To address these challenges, MyBHA has called for the establishment of a high-level inter-ministerial task force led jointly by the Housing and Local Government Ministry and the Ministry of Tourism, Arts and Culture. The task force would be responsible for introducing and enforcing regulations on all short-term rental accommodations and empowering local authorities to consistently uphold these laws without adversely impacting legitimate hotel businesses. It would also set minimum safety and operational standards for all accommodation providers.In addition, the association urges the Digital Ministry and Communications Ministry to hold digital platforms and OTAs accountable for verifying the licensing status of listings on their portals. Proposed measures include the introduction of digital governance standards, legal penalties for platforms facilitating illegal listings, and tools to prevent social media from becoming a black market for unlicensed accommodations, such as blacklisting, banning, and removal of non-compliant properties.MyBHA’s concerns reflect wider challenges for Malaysia’s tourism sector, particularly with VMY 2026 being a critical campaign designed to attract global visitors and stimulate the economy. The success of this initiative depends on preserving the quality and safety of travel experiences and ensuring a level playing field for all accommodation providers.The issue is also significant for the global travel industry, as unregulated short-term rentals present challenges worldwide. Malaysia’s approach to tackling illegal lodging through robust regulation and enforcement could serve as a model for other popular tourist destinations grappling with similar concerns.Travelers, especially international tourists, benefit from stricter regulations that protect them from unsafe or fraudulent accommodations and ensure consistent quality standards. Travel agencies, OTAs, and tourism operators must adapt to evolving regulatory landscapes to maintain trust and provide safe, reliable options.In summary, Malaysia’s government is urged to act swiftly to regulate short-term rentals, safeguard consumers, support licensed operators, and uphold the integrity of Visit Malaysia Year 2026. A collaborative, multi-agency approach with clear enforcement and accountability measures is key to achieving a sustainable, competitive, and safe tourism environment.Tags: compliance, digital platforms, hospitality, Kuala Lumpur, langkawi, malaysia, penang, regulation, Safety, STRA, Tourism, Travel
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