Airbnb and other Home-sharing businesses have Hotels worried in US


Tired of “sterile hotels,” Brooklyn resident Kelly Dwyer turned to home-sharing site Airbnb three years ago when planning a Southern California trip, finding a Silver Lake apartment that came with two roommates: a dog and a cat.

“It was such a good experience that it sort of pulled me in,” said Duncan, 40, a pet owner and musician. “I can’t remember the last time I stayed in a hotel.”

Hotel executives have long shrugged off Airbnb and other short-term rental websites. The home-sharing businesses weren’t considered a threat to the $176-billion hotel industry because they were believed to primarily serve penny-pinching millennials.

But eight years after Airbnb launched with a single air mattress for rent in a San Francisco loft, the hotel industry is starting to worry that short-term rental sites may pose a serious problem. Not only is the company expanding, there is evidence that competition from rental sites is holding down hotel rates in some areas.

Airbnb, the most popular of the home-sharing sites, has an estimated 2 million listings worldwide, with revenue of about $2.4 billion in the U.S. last year. The business has been valued at $24 billion, higher than the $21-billion valuation of hotel giant Marriott International.

Even more concerning for hotel managers is Airbnb’s torrid growth. In Los Angeles County, Airbnb listings increased 42% in the seven months ended in January, a Times review found. In some neighborhoods, the increase was much larger.

“Hotel companies are going to start paying a lot more attention to Airbnb now that their numbers are as big as they are,” said Jamie Lane, a senior economist for the hotel research arm of real estate firm CBRE.

The industry came out firing recently with a study contending that a growing number of Airbnb landlords are really running “illegal hotels” in major cities, including Los Angeles, which lets them avoid taxes and regulations that hoteliers pay.

If Airbnb is impacting hotels in any way, it’s in the ability to raise rates. — Brandon J. Feighner, director, CBRE hotel valuation and advisory services

That study, by the Pennsylvania State University School of Hospitality Management, concluded that nearly 30% of Airbnb’s revenue in 12 big cities comes from people who rent out their properties at least 360 days a year, drawing an average of more than $140,000 annually.

Traditional hotels welcome competition, said Vanessa Sinders, a spokeswoman for the American Hotel & Lodging Assn., the trade group for the nation’s 53,000 hotels, which commissioned the study. But she added that the growing number of Airbnb properties operating year-round aren’t required to meet the health, safety and cleanliness standards that hotels must maintain.

“Competition in our industry thrives because everyone plays by the same set of rules designed to protect homeowners, guests and communities,” she said.

Airbnb rejects such contentions, saying most of their hosts live in the homes they rent.

“In Los Angeles, 82% of Airbnb hosts in L.A. share the home in which they live, and furthermore, 80% of entire home listings in L.A. are rented for less than 90 days a year,” Airbnb spokeswoman Alison Schumer said.

Hotels and online travel sites clash over booking scams
Hotels and online travel sites clash over booking scams

Nationwide, Airbnb lists about 173,000 units, equal to about 3.5% of the more than 5 million rooms rented out by traditional hotels — not enough to pose a serious threat to the hospitality industry, according to a study by CBRE’s hotel research arm. The study analyzed Airbnb’s operations from October 2014 to September 2015.

The study goes on to say that Airbnb properties have started to pressure hotels to keep rates low in a handful of cities where home-sharing units are plentiful, including Los Angeles, San Francisco and New Yorks.

In Southern California, Airbnb may be keeping hotel rates from skyrocketing in areas such as Santa Monica, Hollywood, Beverly Hills and Marina del Rey, according to CBRE.

For example, hotel room rates around Los Angeles International Airport rose nearly 13% in 2015 over the previous year while rates in the Santa Monica and Marina del Rey area increased only 5.6%, CBRE found.

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In Santa Monica and Marina del Rey, Airbnb has one bedroom listed for every two hotel rooms, the report said. Around the airport, Airbnb has one room listed for every 4.4 hotel rooms.

In addition, Airbnb’s rates around Santa Monica and Marina del Rey are nearly 30% lower than the hotel rates in the same area, according to the CBRE report. Around LAX, the Airbnb rates are 8% cheaper than hotel rates.

“If Airbnb is impacting hotels in any way, it’s in the ability to raise rates,” said Brandon J. Feighner, director of CBRE hotel valuation and advisory services.

Another area in Southern California where hotel rates may be held in check by Airbnb is Venice, where the home-sharing site had 1,741 listings in early January, according to data collected by Inside Airbnb, a site that tracks the company’s short-term rentals.

That figure was 25% higher than the number of listings in May 2015, a Times analysis shows. The tourist-friendly area leads all Los Angeles County neighborhoods for Airbnb listings, ahead of Hollywood and Santa Monica.

Mark Sokol, an owner of the 120-room Hotel Erwin in Venice, said he feels pressure to keep his rates low because too many short-term rentals in Venice have turned into illegal hotels that operate year-round and don’t pay the fees and workers’ salaries of traditional hotels.

“When you have that much supply, it definitely has price pressure,” he said.

Some hotel owners say they don’t worry about competition from Airbnb because only hotels can offer guests the assurance of a clean room, with amenities such as a coffee maker, a television and a comfortable bed.

“Hotels are going to provide a standard hotel experience whereas Airbnb can be an adventure or a nightmare,” said Ken Pressberg, owner of the Orlando, a 95-room boutique hotel near the Beverly Center.

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As young travelers advance in their careers and earn more money, he said he believes they will eventually abandon Airbnb for traditional hotels.

A survey of 1,650 adults by the travel search site Hipmunk found that 74% of millennials have stayed in a home-sharing property for a business trip, compared with just 38% for Gen Xers and 20% for baby boomers.

To lure young people away from short-term rentals, many hotel owners are investing in their properties, such as upgrading Wi-Fi speeds in the lobby, adding electronic tablets in the rooms and offering meals and drinks that are unique to their hotels.

“Airbnb is just another competitor that you have to keep your eyes on,” said Phil Anderson, general manager of the DusitD2 Constance Hotel in Pasadena.

But for many young travelers, the quirky extras found at Airbnb properties are what attract them — extras they won’t find at traditional hotels.

Tasmin Lofthouse, a 22-year-old marketing assistant from Blackpool, England, said she has booked an Airbnb property for her trip to Los Angeles in June because she wants to avoid the “commercialized and touristy” setting of a hotel.

“From what I’ve seen so far, Airbnb hosts are willing to go the extra mile, and some even let you help yourself to any homegrown vegetables or fruit they may have,” she said. “I doubt you’d see that at a hotel.”

 

Hotels and online travel sites clash over booking scams

 

A battle is heating up between online travel sites and U.S. hotels over the best way to book your hotel room.

Like most things in business, the feud comes down to money.

The American Hotel and Lodging Assn., the trade group for hotels in the U.S., is pushing for legislation to crack down on fraudulent online booking sites that trick travelers into paying for hotel rooms but have no relation to the hotels. The group says the scams cost travelers up to $1.3 billion a year.

A coalition of online travel sites isn’t buying it. The sites say the hotel industry is exaggerating the online scam problem to push travelers to book directly on hotel sites so that hotels can avoid paying sales commissions to the online booking sites.

“It’s just a veiled attempt at trying to scare consumers to book directly with the hotel chains themselves,” said Philip Minardi, a spokesman for the coalition of online sites, including Expedia, Priceline and Airbnb.

Hotel chains launch Wi-Fi warHotel chains launch Wi-Fi war

http://www.latimes.com/business/la-fi-hotel-chains-launch-wifi-war-20141226-story.html

The stakes are high in this feud. Travelers make an estimated 480 online hotel bookings per minute in the U.S. Hotels pay third-party booking sites commissions of up to 25% of the room price. Hotels also want travelers to book directly from them so they can pitch future deals and packages and develop guest loyalty.

Hotel industry officials reject suggestions that they are using the scams to scare travelers away from outside booking sites.

“The fact is online scams are hurting consumers and jeopardizing their confidence in the online booking process, while also harming the reputation of hotels,” said Katherine Lugar, president and chief executive of the hotel trade group.

BY Hugo Martin/Los Angeles Times

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Homestays, a booming business HOMESTAYS, once popular in rural areas, have now become big businesses in towns and cities nationwide…

Homestays, a booming business: Homes vs hotels, a study of the industry


Homestays, a booming business

HOMESTAYS, once popular in rural areas, have now become big businesses in towns and cities nationwide.

Thousands of homeowners have discovered how to make money with their properties and avoid paying taxes.

They have joined global home-sharing marketplaces, and just like how Uber has made life for government-regulated taxi drivers difficult, the home-sharing phenomenon is shaving off hotel revenues.

By paying a mere 3% service fee per booking, homeowners – also called hosts – can connect with over 60 million travellers worldwide through online giants like American company Airbnb and Singapore-based HomeAway.

Airbnb’s website has a tool to help homeowners gauge their expected weekly income and according to this, the country’s chart-toppers are those in Langkawi who can make RM2,801 a week, followed by those around Malacca’s Jonker Walk (RM2,495 a week).

Close behind are Penang home-shares in Tanjung Tokong (RM2,494) and Pulau Tikus (RM2,449). In Bukit Bintang in Kuala Lumpur, they can expect to earn RM1,676 weekly, while those near Taman Pelangi in Johor Baru can expect RM2,287 a week.

The above estimated earnings are for apartments or houses catering to groups of five travellers.

There are homeshares even in the hinterlands. They can make an average of RM923 a week in Kota Baru, Kelantan. In Kangar, Perlis, homeshares can expect to collect RM1,619 a week.

Unlike hotel occupancies, the government has no knowledge nor way of tracking these check-ins.

All the payments are transacted via the home-sharing portals’ overseas payment gateways and the earnings are transferred to homeowners through international money wires, PayPal or direct deposits.

Their guests are also “exempted” from the RM2 per room per night heritage tax fee in Malacca and Penang’s local government fee of RM3 per room per night for four-star and five-star hotels, and RM2 per room per night for three stars and below.

“They don’t have to pay corporate or income taxes. They don’t need to collect GST or report their occupancy rates.

“They don’t need to install fire doors or water sprinkler systems. If this goes on, budget hotels can just take down their signboards and become home-share operators,” said Malaysia Budget Hotels Association president P.K. Leong.

He said his association had raised the issue of home-sharing with the government several times and urged them to regulate this business but no action had been taken.

“We estimate about 15% of our business is being siphoned into the home-sharing market. And it’s not really sharing,” he said.

“People are buying residential properties specifically to start short-term rental businesses. We believe this is growing at an alarming rate but we don’t have any way to track them.”

In 2014, Airbnb was reported to have over 800,000 listings worldwide. Now, the company declares on its website that it has over two million.

Five-star resorts contacted, however, do not feel threatened by the home-sharing operators.

Managers in two five-star hotels, who declined to be named, said these setups target budget travellers who come to Penang on business or already know what to do when they come to Penang.

“Our hotel offers a level of service not found in home-shares. It’s a different market,” said one manager. – By Arnold Loh The Star

Homes versus hotels

 

Home-sharing services like Airbnb are becoming a hit among Malaysians. But hotels are urging the Government to regulate such services, claiming that rental of private apartments and studio units is illegal. Noting such calls, the Government is currently discussing how to address the matter.

LIVING rooms instead of hotel lobbies. Apartment units instead of hotel suites. This is the trend today.

More Malaysian holiday-makers are choosing to rent private properties as accommodation on their trips, instead of booking hotel rooms.

They do this using home-sharing services like Airbnb and Singapore-based HomeAway, which offer travellers the option to stay in a local host’s property.
Ranging from single rooms to entire apartment units, guests can book their accommodation from hosts, who list their property on such websites to be leased out for a fee.

Sometimes, the fees are even lower than the room rates offered by hotels.

This is one of the factors that drive the popularity of such services, with the San Francisco-based Airbnb having over two million property listings for rent from local hosts in about 191 countries around the world.

In Malaysia, home-sharing services are also gaining traction among travellers and homeowners, who want to earn some income from offering short-term rentals.

However, the hotel industry in the country is claiming that such services are eating into their business, with some estimating about 5% to 15% of their business being diverted.

Hoteliers are also saying that consumers are not fully protected under such arrangements.

Likening home-sharing services like Airbnb to Uber in the taxi business, hoteliers claim that the hosts are not subjected to the same regulations imposed on hotels and do not need to pay taxes or collect the Goods and Services Tax (GST).

As the industry calls on the Government to regulate such services, the Tourism and Culture Ministry says discussions are ongoing to address the matter while the Urban Wellbeing, Housing and Local Government Ministry is open to feedback on the issue.

Malaysian Association of Hotels president Sam Cheah sees the growing popularity of such home-sharing platforms like Airbnb as a threat to the hotel industry.

“It isn’t a level playing ground because the hosts who are offering their properties for rent are not subjected to the same requirements, including safety standards,” he says.

Cheah points out that the hosts can afford to offer lower rates because their operating costs to run their businesses are smaller.

“They pay domestic usage for quit rent and utility bills. They are not required to adhere to safety requirements such as installing proper fire protection,” he adds.

Cheah explains that hotels also have public liability insurance and protect consumers in the event of negligence or fire.

“We are obligated to protect our customers. But there is no such policy for home-sharing hosts,” he says, urging consumers to be aware of such risks.

Cheah also points out that it is illegal for homeowners to operate a business for tourists and travellers when the property is meant for domestic dwelling.

“It is unfair for residents who are neighbours of such hosts as they will have strangers walking in and out of the premises,” he says.

These tourists will also be using the swimming pool, gym and other facilities meant for residents.

However, Cheah says the association, which consists of 881 member hotels, cannot discount or prevent such a business model from being practised.

“But the Government should regulate such businesses to protect tourists and make it an even playing field for hotel operators,” he says.

If left unchecked and unregulated, Cheah foresees the Government will have a problem dealing with the projected 36 million tourist arrivals by 2020.

“If we do not regulate Airbnb and other home-sharing services, we wouldn’t be able to monitor the industry. We wouldn’t know if we have an oversupply or over-development and businesses may lose out.

“It is just like Uber and GrabCar in the taxi industry. You cannot stop them but you have to regulate them. Then it makes sense,” he says.

Echoing Cheah’s call to the Government to impose regulations, Malaysian Association of Hotel Owners secretary Anthony Wong calls such home-sharing services illegal as hosts are not licensed to provide lodging and insurance for guests.

“It is amounting to making private arrangements and guests who are hurt during their stay are unable to claim insurance for any mishaps.

“As legal entities, hotels have permits to comply with. Our operating costs are expensive and we pay taxes,” says Wong, adding that hotel rates are also competitively priced.

He claims that the emergence of such services and illegal homestays have caused hoteliers to lose about 5% in revenue.

Acknowledging the concerns by hotels, Tourism and Culture Ministry secretary-general Tan Sri Dr Ong Hong Peng says the ministry has received complaints from the industry on the emergence of home-sharing platforms.

“This issue has been acknowledged and discussed extensively by the Special Task Force on Service Delivery and its working group.

“This working group is represented by government agencies such as the ministry, Malaysia Productivity Corporation, the Urban Wellbeing, Housing and Local Government Ministry and the police,” he tells Sunday Star.

Dr Ong adds that the question of regulating home-sharing platforms and conducting enforcement on homeowners under such services comes under the purview of local councils.

In the meantime, the ministry has its Malaysian Homestay Programme, which offers a unique experience to tourists.

“The programme enables tourists to stay and interact with local families who act as hosts.

“Under this programme, families and their houses register with the ministry after completing the homestay training module and following the guidelines,” he explains.

But Dr Ong points out that this is different from merely offering accommodation as it is a community-based tourism programme which offers tourists a lifestyle experience of rural villages.

In 2015, Malaysia attracted 25.7 million tourist arrivals, a decline of 6.3% compared to 27.4 million tourist arrivals in 2014.

For the first quarter of 2016, Malaysia registered an increase of 2.8% in tourist arrivals, which Dr Ong perceives as a positive outlook.

“A strong growth in arrivals is expected for the remainder of this year,” he says.

Former Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan, who was just replaced in a Cabinet reshuffle on Monday, says it is still too early to decide whether to regulate homeowners involved in home-sharing services.

“This will require extensive discussion. The ministry welcomes feedback from stakeholders on this matter, including hoteliers, and will be more than happy to listen to their concerns,” he says.

The issue of regulating or even banning Airbnb and other home-sharing marketplaces is of growing concern.

Recently, it was reported that New York State in the United States may make it illegal to advertise apartments on Airbnb if a Bill is made into law by Governor Andrew Cuomo.

Meanwhile, the German capital of Berlin has stopped tourists from renting entire apartment units using Airbnb and other similar websites. The move bans homeowners from leasing their property to tourists without a city permit.

Japan released national guidelines for home-sharing services, making properties only available for rent if guests stay for a week or longer.

Other places are more receptive towards home-sharing platforms, including London, which amended housing legislation that makes it legal for locals to rent out their homes through websites like Airbnb. –  By Yuen Meikeng The Star

Airbnb: Malaysia is a really ‘exciting growth market’ 

AS more Malaysians open their homes to tourists, Airbnb describes Malaysia as an “exciting growth market”.

Nevertheless, the world’s leading community-driven hospitality company also encourages hosts to familiarise themselves with regulations in their area.

“These can differ from council to council and even street to street, all over the world,” Airbnb tells Sunday Star in an email.

Despite the growth of Airbnb across Malaysia, the company says the traditional hotel sector continues to do well too, with growth in occupancy and room rates.

“We’re proud of the economic benefits Airbnb provides to families, communities and local businesses that otherwise wouldn’t benefit from the tourist dollar,” it says.

Overwhelmingly, Airbnb says its hosts are renting out their homes occasionally, earning a little extra to help supplement their income.

“The vast majority of our hosts across Malaysia are everyday people renting their spare room or home occasionally, not commercial operators,” it adds.

Airbnb also says it has a good working relationship with the Malaysian Government and have partnered with it in the past.

In December last year, it was reported that a pilot project was being conducted in Malacca involving 130 homestays in 11 villages to help them market their business using online listings.

The programme was a collaboration between the Multimedia Development Corporation, the International Trade and Industry Ministry, the Tourism and Culture Ministry and Airbnb.

Airbnb says over 80 million guests have had a safe, positive experience using the platform.

“We help promote positive experiences through a global trust and safety team available 24/7, authentic reviews, verified profile information, and the $1 Million Host Guarantee,” it says.

A check on its website showed that the Host Guarantee will reimburse eligible hosts for damages up to A$1mil (RM3.06mil).

“The Host Guarantee should not be considered a replacement or stand-in for homeowners or renters insurance,” read the website.

Airbnb also has a refund policy for guests if the host fails to provide reasonable access to the booked listing, the listing booked is misrepresented or isn’t generally clean or unsafe, among others.

“Airbnb’s community operates on the principles of trust and respect. Our host and guest review systems demonstrate our commitment to responsible behaviour,” it says.

Meanwhile, some local Airbnb hosts in Malaysia have mixed views about the idea of having the Government regulate their business.

A full-time Airbnb host in Malacca, known only as Chen, says she welcomes such a move as long as it is done fairly and does not overly restrict the business.

“It can be beneficial for both the hosts and guests.

“If we are given licences by the Government, we can even put up signages to advertise our business. And for guests, they would have more protection,” says the 30-year-old lass who rents out one apartment and two townhouses.

Chen, a former marketing manager, quit her job two years ago to become a full-time Airbnb host, calling it her “interest and passion”.

She denies having any opposition from her neighbours in renting out her properties to tourists.

“I informed my neighbours before doing this. While they were initially doubtful, they are now happy I have guests,” Chen adds.

And in the event the Government decides to ban such services, Chen says hosts like herself will transform and adapt to the situation.

“This is the global trend and many are using this business model now. It is important to stay competitive and adapt to the times,” she says.

Another full-time host, Ridzuan Effendy, 29, hopes the Government does not impose regulations on Airbnb.

“Home-sharing services aren’t the same as hotels. Many tourists use Airbnb because the prices are cheaper compared to hotels.

“It is a case of having a willing buyer and seller. It shouldn’t be illegal,” says the former engineer, who lists his properties in Kuala Lumpur.

Related: Travellers drawn to cheap prices

Home-shares annoy neighbours 

BE nice. Buy fruits for your guests or colouring books for their kids and potentially make RM8,000 or more each month renting your apartment or house to short-stay tourists.

Unofficial hotel: At one time, nine of the 28 units of one of the blocks in Halaman Pulau Tikus were available for short-term rentals by medical tourists.>>>

The key performance indicators for home-share operators are the guest reviews on their listings in global marketplaces like Airbnb and HomeAway.

“My guests and I review each other. It’s like Uber (global ride hailing app). You will know your guests’ reputation and your guests will also know yours.

“If anything bad happens, the guests or I can report it to Airbnb and we can be banned,” said an operator in Penang who only wants to be known as Sue, a housewife.

She rents out a house in Batu Ferringhi (RM320 a night) and a condominium unit in Pulau Tikus (RM400 a night) as a host on Airbnb and said her properties were now rated four-and-a-half stars.

The location may seem to be a secondary consideration, with one three-bedroom low-medium cost apartment in Air Itam having a five-star rating on Airbnb.

“It may look like a low-cost apartment from the outside and parking is limited. But it is lovely inside. Love the design and everything,” wrote a reviewer.

From the photos on this listing, the owner had decorated the place with a profusion of wallpaper and the furnishings and paintings within can rival a plush hotel room. There is bed space for up to eight guests and it is only RM150 a night.

But the surge of home-share operators may have inconvenienced neighbours.

Halaman Pulau Tikus management corporation chairman Khoo Boo Eng said his block in Lengkok Berjaya had become the haunt of medical tourists looking for a place to stay while seeking treatment here since several years ago.

He said he had seen medical tourists arrive who were truly sick.

“They shouldn’t be allowed to stay in our residential area. Some of my neighbours are worried that if they had contagious diseases, we would all be at risk,” he said.

He said at one time, nine out of 28 apartments in his block were rented out this way and many unit owners complained about the constant flow of strangers.

“Ours is a small, exclusive residence. We had to install extra security cameras and have a security guard 24 hours a day for our residents’ safety.

“They are making commercial use of their residential properties. We are planning to take them to court and seek injunctions to stop them from renting to short-stay guests,” he said.

Earlier in the week, officials from four departments of the Penang Island City Council (MBPP) carried out a spot check and four unit owners in Birch Regency Condominium in Datuk Keramat were fined RM250 each for operating a business without licence.

They knocked on the doors of 15 units believed to be available for rent on a short-term basis and found four being occupied – two units by Singaporeans, one by Australians and another by Canadians.

Tanjung MP Ng Wei Aik, who was present, said the officers spoke to the foreigners who confirmed they were here on holiday.

However, owners argued that there were no laws prohibiting them from renting out their units for any length of time.

One hurdle they had to go through is the complaints from other condo owners.

“We get many complaints from our fellow residents about these short-stay guests. We’re just doing our duty to maintain the peace in our condominium,” said a condominium committee member.

When contacted, Penang Island City Council Building Department director Yew Tung Seang said there could be a legal loophole that would make it hard for authorities to stop residential property owners from offering short-term rentals.

“Property owners have the right to earn rent and there is a grey area over short-term and long-term rentals.

“But when apartments or houses become like hotels, their operations can become a nuisance for neighbours.

“The council is planning a machinery to control this sort of activity,” he added.

In January, Johor Tourism, Trade and Consumerism committee chairman Datuk Tee Siew Kiong was reported as saying that homestay operators at housing estates in the urban areas in the state would no longer be allowed to use the word “homestay” to promote their accommodation.

He said there were plans to regulate and standardise the homestay segment in Johor.

He said many home owners in the urban areas had converted their properties into homestay facilities to cater to customers looking for a short stay.

In the United States’ New York State, legislators tabled a bill last month to ban the advertising of short-term home rentals of less than 30 days, with fines of up to US$7,500 (RM30,000).

“Every day I hear from New Yorkers who are sick and tired of living in buildings that have been turned into illegal hotels through Airbnb because so many units are rented out to tourists, not permanent residents,” Manhattan assembly-woman Linda Rosenthal was reported as saying last month.

It was reported that New York City has over 40,000 home-share listings and each earns an average of US$5,700 (RM23,300) a month.

Study the homestay industry

 

I REFER to the reports “Home versus hotels” and “Travellers drawn to cheap prices” ( Sunday Star, July 3) and “Govern home-share under new laws” (see above).

It is well known that homestay is popular not only in Malaysia but also all over the world now. I have used both types of lodgings and find pros and cons in both.

Homestays are likened to the Airbnb concept which was launched in 2008 and has experienced rapid growth since then. Statistics show that at the end of 2015, Airbnb hosted eight million guests, chalked up three million nights of cumulative booking, were used by 50,000 renters per night and has a market capitalisation of US$2.5bil. This demonstrates the effectiveness and popularity of the concept used by Airbnb.

However, in the US where this concept began, there is concern among the traditional hospitality industry that it is a threat to their business. There is pressure on the government to either put a stop to Airbnb activities or regulate them. According to a report commissioned by hotel associations in the US, some of the financial effects of Airbnb (focused in New York city but gives a strong indication of what may be happening in other parts of the world too) are:

i) Airbnb is growing because it is less labour intensive and requires lower level of service;

ii) There is no marginal cost for such services as new rooms can be added incrementally (or removed) and overheads are negligible compared to hotels;

iii) Hotels were losing revenue due to loss of room nights. This also had an ancillary effect on other services offered by the hotels such as F&B outlets and business centres; and

iv) Hotels in areas where Airbnb is established have responded to increased competition by reducing their prices.

I also looked up issues of competition in this market which may be a cause for concern. If we look at the homestay concept, what it offers is the opportunity for consumers on the supply side to supplement their income by providing a service via a peer-to-peer platform. It also offers travellers a chance to live like the locals and take part in cultural exchanges.

It is also basically a connection where supply meets demand and other needs such as budget constraints, personalised service, easy accessibility and homely atmosphere and all are rolled into one. Airbnb portrays itself as “a platform that allows the little guy to build up a complimentary industry, one that increases the size of the hospitality pie rather than take a slice from existing business.”

Applying this concept in Malaysia, it is a wonderful way to not only expand our hospitality industry especially in areas where hotel rooms are limited or extremely expensive but also allow locals to interact (people from the peninsula going to Sabah and Sarawak and vice versa, for example) or foreigners a chance to live like the locals.

This would in turn generate a multiplier effect on the local economy as other services such as restaurants, laundry, cleaning or transport would be required to support the homestay service. Besides all these, it would put money in the pockets of local residents and also support small businesses outside the hotel districts.

Will the homestay industry be a threat to the hotels? From a competition point of view, there may be some concerns (especially to budget hotels) but these could easily be overcome with careful formulation of policies and guidelines.

As consumer demand has shifted, the markets are or may be different, and it is ultimately up to the consumer to choose where he wants to stay.

Hotels are mainly located in the city or town centres and offer better services, amenities and standards. On the other hand, homestays and Airbnb serve up lodging options that cater to a more local and less touristy experience. Hotels and Airbnb/ homestays operate differently so there is room for both to coexist as long as they are after different customers.

Having said that, regulators and policy makers in Malaysia need to carefully study the implications of introducing regulations to homestay or Airbnb users from the supply side. Many countries have taken steps to address the issues emerging from the rapid rise of Airbnb and homestays. It would be useful for the Malaysia Competition Commission (MyCC) to commission a study on the effects of such concepts on the hospitality industry in Malaysia. This will then give the policy makers some empirical studies to formulate the required guidelines or regulations.

Competition is always threatened when there is a threat to the sharing economy (as in Uber versus the traditional taxi service). The sharing economy is where industry can collaboratively make use of under-utilised inventory via fee-based sharing. The market is always uncertain and nervous when a new marketplace is created, which in turn increases the difficulty of defining the market in competition law. The way businesses are being done and change in consumers’ tastes all merit a thorough study before any action is taken to manage a growing industry.

Two factors have arguable given rise to the rapid growth of peer-to-peer platforms – technology innovations and supply side flexibility. A win-win situation is always possible. If competition is distorted, as in when people buy into residential property to turn it into a business venture, that is when the authorities could step in.

By SHILA DORAI RAJ Founding and former CEO Malaysia Competition Commission

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BDS, the Beidou Navigation Satellite System from China


https://www.youtube.com/embed/4cjicmbU138

https://www.youtube.com/embed/Ra3X5ukQmNw

China launches 23rd BeiDou satellite into space – CCTV News – CCTV.com English

http://t.cn/R5SsGFc


China eyes Silk Road countries for its Beidou satellite system

18 satellites to launch for BDS by 2018

China on Thursday vowed national efforts to complete its Beidou satellite navigation system to serve global users by 2020, with priority going to countries involved in the new Silk Road initiative.

The current goal of developing China’s BeiDou Navigation Satellite System (BDS) is to “provide basic services to countries along the land and maritime Silk Roads and in neighboring regions by 2018, and to complete the constellation deployment of 35 satellites by 2020 to provide services to global users,” said a white paper released Thursday by the State Council Information Office.

A “globalized” BDS would have “positive and practical significance” in terms of connectivity around the globe, especially the interconnection between China and Southeast Asian countries under the Silk Road plan, known as the Belt and Road initiative, Huang Jun, a professor at the School of Aeronautic Science and Engineering at Beihang University, told the Global Times on Thursday.

In line with the Belt and Road initiative, China will jointly build satellite navigation augmentation systems with relevant nations and promote international applications of navigation technologies, the white paper states.

To fulfill the 2018 goal, the country plans to launch some 18 satellites for the BDS by 2018, Ran Chengqi, BDS spokesperson, told a press conference on Thursday.

“In priority Chinese cities such as Beijing and Urumqi in Northwest China’s Xinjiang Uyghur Autonomous Region, as well as low latitude countries like Thailand, the BDS is capable of offering a positioning accuracy of better than five meters,” said Ran, who is also director of China’s Satellite Navigation System Management Office.

Since 2015, the country has sent up seven more satellites into space in support of the BDS, including five navigation satellites and two backup satellites, Ran added, citing Sunday’s launch of the BDS’ 23rd satellite – a backup satellite – as an example.

In 2020, the BDS might offer different positioning accuracy choices and could provide centimeter-level accuracy under certain requirements, said Lu Weijun, a BDS expert at Beijing University of Posts and Telecommunications.

Unique features

Despite being a late starter compared with the US-developed GPS, China’s BDS has unique features, Huang said, citing the BDS short-message communication service as an example.

“The short-message communication service is mainly useful in places with insufficient ground and mobile communication capabilities, such as deserts, seas and disaster areas where communication facilities have been destroyed,” Lu told the Global Times.

More than 40,000 fishing vessels along China’s coastline have been equipped with the BDS application terminals, Ran said, adding that they also provided better communication for islands near the coastline.

The BDS short-message communication service is mainly handled by five Geostationary Orbit (GEO) satellites, Lu said. Located above China, the five GEO satellites mainly serve a coverage area of Chinese territories and the Asia-Pacific region” and “could be used to locally enhance the signal in wartime, when other satellites might have been closed.”

An independently designed global navigation and positioning network would also contribute to national security, Huang said.

Industrial chain

China is developing chips, modules and other basic products based on the BDS and other compatible systems, and fostering an independent BDS industrial chain, the white paper noted.

“By the end of April, the BDS technology has been applied to more than 24 million terminals and over 18 million mobile phones,” Ran said.

It is expected that by the end of this year, up to 50 million mobile phones will have been installed with domestic chips that will be compatible with three satellite navigation systems, namely the BDS, GPS and Russia’s GLONASS, Wang Hansheng, vice president of Olink Star, a Beijing-based company that makes navigation satellite system products, told the Global Times.

By Ding Xuezhen Source:Global Times

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Smartphones going modular


A near-final prototype of Google’s Project Ara. – Photo : ©Google ATAP

https://www.youtube-nocookie.com/embed/Mo4GeSil9fU

There has been much talk of modular smartphones this spring, after LG released its G5 handset and Google presented a near-final version of its Project Ara.

Modular smartphones differ from regular mobiles thanks to their “building block” design, made up of various interchangeable modules containing different hardware components. These can be switched quickly and easily to boost performance or replace faulty parts.

The current wave of modular smartphones draws on a concept created by a Dutch designer, Dave Hakkens, whose Phonebloks mobile is based on a set of small modules (processor, hard disk, camera, etc.) that can be easily changed and updated.

Once assembled, they form a smartphone with varying levels of performance and functionality, a bit like a desktop PC. As well as making savings for users, a modular design can also help counter planned obsolescence in smartphones.

This idea inspired Google’s Advanced Technology and Projects group (ATAP), who went on to develop Project Ara. Initially presented as a similar project to Phonebloks, comprising almost as many modules as a smartphone has components, the handset evolved, little by little, into a slightly less ambitious prototype presented at the last Google I/O conference in Mountain View, California.

It now takes the form of a smartphone with just six interchangeable modules, including a second display, a camera, memory, a speaker, etc. The screen, processor and RAM are all grouped together in one core block that cannot be modified. A developers’ kit is due to be released in the fall ahead of a planned consumer launch in 2017.

Another smartphone based on the same idea hails from Finland. However, the PuzzlePhone hasn’t been the focus of anywhere near as much media attention as Google’s concept.

This modular mobile only has three interchangeable blocks: one for the display, another for the battery and one main system block housing the processor, memory and camera. It should go on sale before the end of 2016.

The only modular smartphone currently available to buy is the LG G5, unveiled at the 2016 Mobile World Congress in Barcelona, Spain, back in February.

This handset has a slide-out bottom for changing the battery in just a few seconds. As well as its removable battery, additional interchangeable elements can be added to the phone, such as camera and audio modules. The LG G5 is out now priced at around $650.

Check out Project Ara in this video below:

https://www.youtube-nocookie.com/embed/aWW5mQadZAY
Sources: AFP – RelaxNews

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World’s first Quantum communication satellite to be launched in China against hackers


China is poised to become the first country to send encoded information from space that cannot be hacked. Scientists are making final adjustments to China’s first quantum communication satellite. The project chief describes it as a revolution in communications.

China will launch its first experimental quantum communication satellite in July, according to the Chinese Academy of Sciences.

 

China is poised to become the first country to send encoded information from space that cannot be hacked. Scientists are making final adjustments to China’s first quantum communication satellite. The project chief describes it as a revolution in communications.

A quantum photon cannot be separated or duplicated, which means if someone tried to decode information, the encryption would change, and the receiver would know that his letter was opened by someone.

Scientists hope the new technology will protect China from future cyber issues. In 2015, cases involving information technology in China rose by more than 120 percent, according to survey by a non-profit cybersecurity institution. China plans to use its quantum satellite system to cover the planet by 2030.

On the ground, China is also building its own quantum information sharing network for use in national defense and security. At some point, China plans to connect the ground network to the quantum satellite system.

It has taken five years for Chinese scientists to develop and manufacture the first quantum satellite. In June, it will be transported to the Jiuquan Satellite Launch Center in southwest China for final preparation and launch in July., 2016

China wins space race to launch world’s first ‘quantum communication’ satellite in fight against hackers

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China start-up ‘Little Red Book’, Xiaohongshu valued at US$1bil


Colour of success: A Chinese actress dressed as a Red Guard and holding a ‘Little Red Book’ performs in front of a portrait of the late Chairman Mao Zedong at a restaurant in Beijing Xiaohongshu says its name has nothing to do with Mao’s famous tome. — Reuters

HONG KONG: The “Little Red Book” has become a symbol of capitalist success in Communist China.

E-commerce start-up Xiaohongshu, which means “Little Red Book” in Chinese, has raised US$100mil from Tencent Holdings Ltd and other investors at a valuation of about US$1bil, two people familiar with the matter said.

The online shopping site co-founded in 2013 by Charlwin Mao, which connects overseas merchants with local buyers, becomes China’s newest billion-dollar startup. It also attracted investment from Genesis Capital and Tiantu Capital in its latest round, the people said, asking not to be identified because the matter is private.

The funds will help bankroll the Shanghai-based startup’s expansion. Xiaohongshu — which calls itself RED and stresses its name bears no relation to Mao Zedong’s book of quotations – works by letting its mostly younger female users post pictures of favorite products. It then connects them with sellers abroad of everything from Body Shop anti-dandruff shampoo to Lotte peach liquor.

Its fundraising comes as venture capital firms grow more cautious about valuations in China, an economy forecast to grow this year at its slowest pace in a quarter-century.

Genesis Capital is a late-stage investment firm founded by Richard Peng Zhijian, who oversaw Tencent’s investment unit. Genesis and Tencent didn’t respond to e-mailed queries. Calls to Shenzhen-based Tiantu’s general line went unanswered. Xiaohongshu co-founder Mao said he couldn’t immediately comment.

Three-year-old Xiaohongshu claims 17 million registered users on its LinkedIn page and had attracted investment previously from GGV Capital and Zhen Fund.

It specialises in cross-border e-commerce, marketing foreign brands to increasingly wealthy local shoppers.

That’s a market forecast to reach 6.5 trillion yuan (US$1 trillion) by 2016, the state-run Xinhua News Agency cited the Ministry of Commerce as saying in March.

It didn’t elaborate on that figure.

The company says its name has nothing to do with Mao’s famous tome, considered one of the most-printed works in history and known to English-speakers as the “Little Red Book.” The late Communist leader’s book is called “Hong Bao Shu” or “red treasure book” in Chinese. “Why isn’t your website called ‘Little Black Book,’ ‘Little Blue Book,’ ‘Little Purple Book’ or ‘Big Red Book’?” reads a question posted by Xiaohongshu in a section of its website sketching out its origins. “We don’t know. But anyway, our name isn’t because of Hong Bao Shu.” — Bloomberg

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Chinese scientists aim high with space gravitational wave project


Gravitational wave detection proposal in the works

 

Chinese scientists are proposing a space gravitational wave detection project that could either be a part of the European Space Agency’s eLISA project or a parallel project.

The announcement of the discovery of gravitational waves in the United States on Thursday by the Laser Interferometer Gravitational-Wave Observatory has encouraged scientists around the world, with China set to accelerate research. Gravitational waves are tiny ripples in the fabric of space-time caused by violent astronomical events.

Scientists from the pre-research group at the Chinese Academy of Sciences disclosed that the group will finish drafting a plan for a space gravitational wave detection project by the end of this year and will submit it to China’s sci-tech authorities for review.

The Taiji project will include two alternative plans. One is to take a 20 percent share of the European Space Agency’s eLISA project; the other is to launch China’s own satellites by 2033 to authenticate the ESA project.

“Gravitational waves provide us with a new tool to understand the universe, so China has to actively participate in the research,” said Hu Wenrui, a prominent physicist in China and a member of the Chinese Academy of Sciences.

“If we launch our own satellites, we will have a chance to be a world leader in gravitational wave research in the future. If we just participate in the eLISA project, it will also greatly boost China’s research capacity in space science and technology.

“In either case, it depends on the decision-makers’ resolution and the country’s investment,” he said.

The draft will provide different scenarios with budgets ranging from 160 million yuan ($24.3 million) to more than 10 billion yuan.

“Although I am not sure which plan the decision-makers will finally choose, I think the minimum budget of 160 million yuan should not be a problem for China,” Hu said.

The Laser Interferometer Space Antenna’s gravitational wave observatory was the EAS’ cooperative mission with NASA to detect and observe gravitational waves. The project, proposed in 1993, involved three satellites that were arranged in a triangular formation and sent laser beams between each other.

Since NASA withdrew from the project in 2011 because of a budget shortfall, the LISA project evolved into a condensed version known as eLISA.

On Dec 2, the European Space Agency launched the space probe LISA Pathfinder to validate technologies that could be used in the construction of a full-scale eLISA observatory, which is scheduled for launch in 2035.

“Currently, all the operating gravitational wave detection experiments worldwide are ground observatories, which can only detect high-frequency gravitational wave signals,” said Wu Yueliang, deputy president of the University of the Chinese Academy of Sciences.

“A space observatory, without any ground interference or limitation to the length of its detection arms, can spot gravitational waves at lower frequency.”

On February 11, scientists from the Laser Interferometer Gravitational-Wave Observatory in the US confirmed they had detected gravitational waves caused by two black holes merging about 1.3 billion years ago. This was the first time this elusive phenomenon was directly detected since it was predicted by Albert Einstein 100 years ago.

LIGO, currently the most advanced ground facility for gravitational research, includes two gravitational wave detectors in isolated rural areas of the US states of Washington and Louisiana.

“Metaphorically speaking, if the research into gravitational waves is a symphony, the discovery of the LIGO experiment makes a good prelude by proving that the hypothetical wave does exist. But I believe the other movements will mostly be composed of new discoveries from space observatory devices, because the low and middle band — which can only be detected from space — is the most extensive source of gravitational wave,” said Hu, the CAS physicist.

Meanwhile, the Taiji project of the Chinese Academy of Sciences has competitors in China. Sun Yat-sen University in Guangzhou, Guangdong province, proposed the Tianqin project in July. That project will receive a 300 million yuan startup fund from the local government to initiate a four-step plan to send three satellites in search of gravitational waves and other cosmic mysteries.

Li Miao, director of the Institute of Astronomy and Space Science, said it was still too early to tell the specific direction of the future of the university’s Tianqin project.

“The major gravitational wave research program in China is the cooperation with eLISA, which is led by professor Hu Wenrui,” Li was quoted by Guangdong’s Nanfang Daily as saying.

“The reason that eLISA made progress rather slowly was that the member states in Europe held different opinions as to whether gravitational waves exist. Now this has been proved to be true, which will greatly accelerate the pace of research in and out of China,” Li said.

China Daily/Asia News Network

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