Good time to invest in property now


Better upside: (from left) Knight Frank Sdn Bhd international project marketing (residential) senior manager Dominic Heaton-Watson, Knight Frank Asia-Pacific research head Nicholas Holt, Sarkunan and capital markets executive director James Buckley at the event

KUALA LUMPUR: The slowdown in the local property market has bottomed out, with prices seen picking up later this year, according to property consultancy firm Knight Frank Sdn Bhd.

“We predict a stable rate in 2017 and we will possibly see better upside towards the end of the year or early next year,” Knight Frank managing director Sarkunan Subramaniam said.

“The market has had a few years of contraction and we feel that this year, what will clear up one of the major concerns of most investors is the political uncertainty,” he said at the launch of Knight Frank’s 2017 Wealth Report here yesterday.

According to the report, “political uncertainty” was among the top concerns of its respondents in Asia at 25%.

“We’re going to have elections possibly this year. Once they have cleared, there will be positive movement in the market and that’s why I feel now is a good time to buy property in Malaysia.

“Once the elections are out, the economy will generally start picking up and sentiments will improve. Capital will also start coming in,” he said.

According to the wealth report, potential fall in asset values was the highest concern among its Asian respondents at 30%, followed by rising taxes and tighter controls on capital movement at 28% and 27% respectively.

Going forward, Sarkunan said affordable homes would primarily drive the local property market.

“Affordable homes will still be a driver to an extent, but medium-to-high end properties will also pick up again. Also, when the mass rapid transit (MRT) lines come into the city, it will drive the commercial market there as well.

“We’ve had a lot of decentralisation push over the last 10 years and the MRT will bring office workers to the city.”

Sarkunan pointed out that locations with light rail transit (LRT) and MRT lines, such as Damansara Heights, have bucked the trend in terms of condominium values.

“Prices have actually increased compared with some of the other areas in Malaysia. Transport hubs or transport-orientated developments, such as Kota Damansara, have also seen improvements in prices.”

The Knight Frank 2017 Wealth Report tracks the value of luxury homes in 100 key locations worldwide, including 19 destinations from Asia Pacific.

According to the report, values rose globally by 1.4% on average last year, compared with 1.8% in 2015. Asia was the second best performing world region last year, with prices rising 5.1%.

Australasia was the strongest performing world region with prices rising 11.4% year-on-year.

Source: BY EUGENE MAHALINGAM The Star/ANN

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Protecting house buyers’ interest


I REFER to the reports “Court: No power to grant extension” and “A fair and right judgment, says housing developer” ( The Star, Feb 28 – Developer has to compensate buyers for delays of projects, Court says).

The High Court decision declaring as ultra vires (beyond one’s legal power or authority) the Housing and Local Government Minister’s granting of a one-year extension of time (EOT) to developers to complete a delayed housing project and thus denying house buyers liquidated and ascertained damages (LAD) provided for under the sale and purchase agreement is timely, sound and indeed meritorious. It is hoped that the decision would be maintained should the minister decide to appeal it.

The Housing Development (Control and Licensing) Act 1966 was enacted for the protection of home buyers.

The long title of the Act (paragraph stating Parliament’s intent for the Act) says: “An Act to provide for the control and licensing of the business of housing development in Peninsular Malaysia, the protection of the interest of purchasers…” This makes clear that the housing development business is regulated to ensure that the protection of home buyers’ interest is paramount.

Two eminent judges, the late Tun Mohamed Suffian, former Lord President of Malaysia, and the late Tan Sri Lee Hun Hoe, the longest serving Chief Justice of Borneo, stated this in two landmark cases respectively.

Suffian LP (Sea Housing Corporation v Lee Poh Chee): “To protect home buyers, most of whom are people of modest means, from rich and powerful developers, Parliament found it necessary to regulate the sale of houses and protect buyers by enacting the Act.”

Lee Hun Hoe CJ (Borneo) (Beca (Malaysia) Sdn Bhd v Tan Choong Kuang & Anor): “The duty of observing the law is firmly placed on the housing developers for the protection of house buyers. Hence, any infringement of the law would render the housing developer liable to penalty on conviction.”

Respectfully, it is submitted that the decision to grant the developer of a housing project extension of time and thus deny the home buyers’ statutory rights to LAD ought to be exercised with diffidence. The decision, if any, ought to be made with the Act’s long title in mind, namely, “for the protection of interest of purchasers”.

In doing so, some aspects to consider are:

> In granting EOT, how will home buyers’ interest be protected?

> LAD is agreed monetary payment for home buyers’ losses for delay in completion of a housing project. Is denying home buyers’ the LAD by the EOT tantamount to protecting their interest?

Although Section 11(3) of the Act states that the developer under “special circumstances” may apply to the Controller of Housing for EOT, it is submitted that Parliament and the long title of the Act surely did not intend LAD to be wiped out by “a stroke of a pen”.

To avoid doubt, “special circumstances” would mean act of God or natural disaster, for example earth quake or tsunami, and not business or economic related challenges or hardship.

The above view would make legal sense of Section 11(3).

Again, the High Court decision is lauded.

Home buyers’ interest is of paramount importance under the Housing Development (Control and Licensing) Act 1966. The Controller of Housing’s or Minister’s decision, although seemingly made “by a stroke of a pen”, must materialise or recognise this intent. Failing to do so would be ultra vires the Act.

May the redeeming light of the Housing Development Act (Control and Licensing) 1966 continue to shine effervescently and protect effectively home buyer’s interest for many years to come.

This letter is dedicated to the National Housebuyers Association, its great team of lawyers, professionals and volunteers for their sterling and pro-bono efforts to speak up for and preserve home buyers’ interest.

Source: ROBERT TAN,  Home buyer and author of Buying Property From Developer: What You Need To Know And Do, Petaling Jaya

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Leaving a legacy by buying a house first before a luxury car …


 

DURING big festive celebrations such as Hari Raya Aidilfitri, Deepavali and the recently celebrated Chinese New Year, it is common to see families with a few generations gathered together.

Our grandparents, parents, uncles and aunties would talk about the legacies left by our ancestors, and the stories often attract a lot of attention whether from the young or old.

Perhaps, the topic of leaving a legacy is something worth sharing as we embark on a brand new year.

For years, I have been touched by the catchy tagline of a renowned Swiss watch advertisement, “You never actually own a (the watch brand), you merely look after it for the next generation”.

While most of us can relate to the thought, not all of us can indulge in such luxurious watches or be interested in buying one. However, at some point in time, we may be looking at buying a property to pass down to our younger generations.

Whenever the topic of leaving a legacy is brought up, I would recall the lesson that I learnt from my late father. My father embarked on a long journey from China to Malaysia at the age of 16. With years of hard work and frugality at his peak, he managed to own a bus company, the Kuala Selangor Omnibus Co.

Other than his bus transport business, he only invested in his children’s education and real estate. He financed seven of his eight sons to have an overseas university education, and when he passed away, he also left four small plots of land in Klang and a company which had 34 buses.

As I look back now, what my late father invested in unintentionally was very beneficial to me when I came back from my studies as an architect. With the land he handed down and the knowledge he equipped me with, I intuitionally got myself involved in small real estate development, and later founded my property development company, Sunrise, in 1968.

Many people have thought of leaving a legacy. The crucial questions often asked are, when should we start planning for it, and how should we go about it?

For financial planning and investment, I always believe that the earlier we start, the better off we are. The same goes to leaving a legacy.

If you plan to buy a property, it is advisable to start earlier as it is more affordable to buy it now as compared to 10 or 20 years down the line especially with rising costs and inflation in mind. You can start with what you can afford first and focus on long-term investment.

It is proven that property prices appreciate over a period of time, especially when we plan to hand over assets to the next generation that easily involves a 20- to 30-year timeline.

As a developing nation which enjoys high growth rate, Malaysia’s property values will also appreciate in tandem with the economic growth in the long run.

Nowadays, we often hear youngsters comment on the challenges of owning a house due to the rising cost of living. I believe that besides starting with what you can afford, it is also important to plan your financial position wisely and to differentiate between investment and spending.

Investing in properties, commodities, shares, etc. is also a form of savings which can help to grow your wealth and to leave a legacy. On the other hand, money spent on luxury items may depreciate over time from the day you buy them. If we can prioritise investment over expenditure, it is easier and faster to achieve our financial goals.

So, if you haven’t already started to plan, do consider leaving a legacy by buying a house first before a luxury car, branded bags or expensive gadgets, as the latter are considered ‘luxury’, not necessity.

Even if you may not have a spouse or children at this point in time, it’s better to start now than later, as our financial commitments tend to grow bigger as we progress into the next stages of our lives.

Most of us hope our lives matter in some way that can make an impact on our loved ones. The idea of leaving a legacy can take many forms, such as equipping the younger generations with knowledge and values, or leaving them fond memories.

Those are all important to work on and they leave a footprint to those lives you touch. If you are also planning to hand over physical gifts, always remember to start earlier with what you can afford, and focus on long term investment.

By Food for Thought Alan Tong

Datuk Alan Tong has over 50 years of experience in property development. He was the world president of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

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Singaporeans on buying sprees for Penang prewar houses; Residents see red


Singapore sweep continues

 Republic’s real estate hunters snapping up houses outside Penang’s heritage enclave.

GEORGE TOWN: Singaporean real estate hunters with a taste for prewar properties in Penang are still on buying sprees, says an NGO.

They are snapping up houses that are located just outside the state’s heritage enclave as these properties are not accorded heritage protection by Unesco, according to George Town Heritage Action.

The biggest buyer appears to be World Class Land (WCL), which is building the tallest residential skyscraper in the planet’s southern hemisphere.

Called Australia 108 because of its 108 storeys, the Melbourne development is expected to be completed in 2019.

WCL has since December 2013 reportedly snapped up 236 prewar houses in Penang, totalling more than 250,000sq ft – the equivalent of 26 football fields.

Recently, it applied to build a 46-storey condominium tower in Gurdwara Road, just 200m from Komtar after buying 37 prewar properties in that area.

Its latest block buy appears to be 26 prewar houses on Penang Road and Bertam Lane, also across from Komtar.

The properties were owned by six descendants of Tunku Kudin (1835- 1909), the great grand uncle of the late first prime minister, Tunku Abdul Rahman Putra Al-Haj, for nearly 100 years.

The offer from WCL was about RM980 per sq ft, totalling RM21mil.

Tengku Abdullah Tengku Mahadi, 61, who collected the monthly rent from the tenants on behalf of his 92-year-old father, said the deal was sealed in Thailand through one of the six heirs who spoke for all of them.

“All the heirs are in their late 80s and 90s. It will cost too much to develop the land ourselves.

“We didn’t really feel like selling. We know the new owner will change the whole place but we are all old and don’t want to stand in the way of development,” he told The Star.

He said the heirs only earned about RM50 per month from each unit when the Rent Control Act was in force.

After it was repealed in 1997, they raised the rent to about RM600 and it had stayed the same since.

WCL lawyers have sent eviction notices to the 60-odd tenants who have until end November to move out.

A subsidiary of Aspial Corporation Ltd, WCL has completed many projects in the island republic and Australia.

Aspial chief executive officer Koh Wee Seng is listed by Forbes this year as the 43rd richest man in Singapore.

George Town Heritage Action has been vociferously against the state government’s apparent lack of control over the alleged WCL buying sprees.

“This company’s business model is to buy the properties, evict the tenants, renovate or rebuild, and then drastically increase rentals,” said its co-founder Mark Lay.

At a press conference yesterday, he showed a list of 236 properties purportedly bought by WCL through several subsidiaries.

Totalling more than 250,000 sq ft, these include rows of old houses along 19 roads, including Dato Keramat, Macalister, Transfer and much of the Seven Streets precinct (known locally as Chit Tiau Lor) near Komtar.

Lay warned that if the state government allowed “one company to accumulate more than 230 prewar houses, it will kill diversity and people’s moral rights to the city”.

“Our concern is also socio-cultural. Any company can damage the fabric of George Town when they have a monopoly,” he added.

In June, The Star reported that Singaporean companies typically raise rentals by 400% to 500% after sprucing up the old houses.

In response, Penang Town and Country Planning Committee chairman Jagdeep Singh Deo had said that the state cannot interfere with free enterprise.

By Arnold Loh The Star/ANN

Penang residents see red over Singaporeans snapping up properties

 

GEORGE TOWN: Public anger in the state is on the rise as Singaporeans continue to buy up pre-war houses here by the blocks.

NGOs and netizens are reacting negatively following The Star Online’s Facebook posting of the news yesterday.

Many are calling for stricter measures to limit foreign buying, but Penang Citizens Chant Group legal adviser Yan Lee warned that it would be useless as foreigners could sidestep such restrictions by simply forming Malaysian shell companies with local directors who are proxies or trustees.

“The corporate veil will shield them from these simple stop-gap measures. Instead, these measures end up keeping out individual foreigners who earnestly want to own property here because they just want to live in Penang.

“The Penang government is more concerned about collecting development charges. The more it allows development, the more money it collects,” he lamented.

Yan Lee was commenting on cooling measures here since 2012 that prevent foreigners from buying landed property of less than RM2mil on the island and RM1mil on the mainland.

For stratified property, the cap is not less than RM1mil both on the island and the mainland.

There is also a state approval fee of 3% over the purchase price.

State Town and Country Planning Committee chairman Jagdeep Singh Deo said in a statement yesterday that statistics had shown that these measures had reduced foreign buying of Penang property by about 50% since 2013.

George Town Heritage Action held a press conference on Thursday to reveal that Singapore developer World Class Land (WCL) had acquired 236 pre-war houses in and around the heritage zone totalling about 250,000sq ft, equal to 26 football fields.

According to the annual report of WCL’s parent company, Aspial Corporation Ltd, the properties are held by six Malaysian companies – WCL (George Town) Holdings, WCL (Magazine), WCL (Macallum), WCL (Noordin), WCL (Bertam R) and WCL (Bertam L).

In the Companies Commission of Malaysia’s online portal, there are also company records of WCL (Malaysia) and WCL (Penang).

By Arnold Loh The Star/ANN

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Money lost under the shadow banking: loan sharks Ah Long


 

IN my previous article, I shared the impact of high credit card interest rate that many have overlooked and hence, overspent. Interestingly, there are loans outside the confines of financial institutions that affect the mass. These loans are largely unregulated and therefore, more painful in terms of financial burden and emotional stress when the loan and interest cannot be repaid on time.

Every now and then, I will receive text messages from unknown contacts offering loans at “attractive” rates. A check with my close associates indicates that I am not alone in receiving such messages. These messages and those stickers offering loans on the streets share the same traits, i.e. easy loan with no pre-qualification required. Example – “Borrow RM1,000, and return RM200 monthly for six months”.

At first glance, it seems like the interest rate for the loan is 20%. However, as the repayment period is only six months, it is actually 40% per annum! This rate is 11 times higher compared with the average fixed deposit rate of 3.5% per annum in the market.

These loans are offered mostly by unlicensed moneylenders, otherwise commonly known as “loan sharks”. According to a news article published in The Star recently, the interest they charged are mostly counted based on monthly or even daily rest basis.

It is learnt from the article that people usually borrow between RM1,000 and RM10,000 at an interest rate of 0.5% to 1% per day. This works up to about 15% to 30% monthly. When the loan is defaulted, another 5% is added as a late repayment penalty.

It therefore becomes evident that the borrowers of such loans face immense problem repaying their loans. They will generally end up borrowing from other moneylender to cover their existing loan which will lead them to more debts. Imagine the emotional stress from harassment when they are unable to serve the interest.

Sadly, this loan with its easy application process and low requirement attracts people who are financially desperate, regardless of professional or income group.

Bank Negara has announced that Malaysia’s household debt-to-gross domestic product (GDP) ratio has increased from 86.8% to 89.1% as of 2015. We have one of the highest household debts in the region without including the unregulated loans from these “moneylenders”. I wonder how this “shadow banking” or “off balance sheet transaction” impact our people and economy.

To protect the rakyat, the government should look at strengthening the enforcement of eliminating illegal money lending.

As the saying goes “where there is demand, there is supply”. Hence the key is to first understand why people resort to borrowing from these “moneylenders”. It is important to strengthen financial education and awareness of public through various channels.

People, especially children, should be taught to borrow for the right things from young, and understand the difference between good debt and bad debt. More importantly, people should learn to ask themselves if there is a real need to borrow. Borrowing money to buy assets that depreciate over a short period of time, such as cars and luxury items is deemed as “bad debt”. This is in stark contrast to “good debt”, such as buying a home or asset that has the possibility of appreciating in the long term, and at the same time, paying a much lower interest rate compared with bad debts.

For people with a genuine need for financing, there are many other options such as borrowing from the banks and legal money lenders, or even to the explore “fintech”, a financial technology which offers more efficient and cheaper financial services through the use of technology. Again, it is important to ensure these channels are legal and well regulated.

Borrowing from unregulated moneylenders is like jumping from the frying pan into the fire. It is important to have wise financial planning in the first place and always seek advice before doing anything financially. One may get advice from government agencies, such as Agensi Kaunseling dan Pengurusan Kredit, when faced with financial challenges.


By Datuk Alan Tong, who has over 50 years of experience in property development. He was the World President of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

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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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