Government should help LHRs, travel agency says

‘SMART REGULATORS’::Local host rentals help their communities, as one job is created for every 30 new tourists to a destination, Singapore-based Agoda said

By Crystal Hsu  /  Staff reporter

Wed, Jan 16, 2019 - Page 12

The government should allow local host rentals (LHRs) to thrive, as they are an important contributor to the fast-growing sharing economy that benefits all involved parties, online travel agency Agoda said last week.

Revenue generated by the sharing economy — transactions done on online marketplaces — is expected to more than double to US$40.2 billion by 2022, with LHRs being the key growth driver, the Singapore-based agency said in a report.

LHRs, also known as vacation rentals or short-term rentals, are growing and bringing substantial economic benefits to local economies, from increasing household incomes to providing earning potential to a more diverse population, it said.

Like the sharing economy, LHRs have transformed how businesses affect communities, it said.

When properly supported and managed, LHRs fill vacant or underutilized housing, create jobs, enhance cross-cultural understanding, and are a meaningful source of business and tax revenue for the communities that host them, it said.

“If municipalities allow local host rentals to grow, then guests, hosts, workers, local businesses and communities all benefit... To pretend that LHRs do not exist or to stand against the tide may temporarily, but not indefinitely, delay the impact of this change,” it added.

Lower prices offered by LHRs encourage longer stays and allow travelers to spend money on things other than lodging, Agoda said, adding that guests in short-term rentals in Montreal stay 50 percent longer than guests in hotels.

The availability of LHRs allowed US travelers to extend their length of stay by 27 percent, it said, citing vacation rental marketplace HomeAway.

LHRs not only benefit hosts and travelers, but also contribute substantial tax revenue to communities, it said.

They also boost economic growth, it said, adding that the approximately 8 million vacant homes in Japan could be used to help ease the accommodation burden ahead of next year’s Olympic Games.

LHRs provide much-needed alternatives to traditional hotels, which cannot meet demand linked to popular events, it said.

Regulators need to design solutions that address real problems without stifling growth that offers long-term rewards to travelers, hosts and communities, Agoda said.

In addition, LHRs help support the ecosystem of related employment, as one job is created for every 30 new tourists to a destination, it added, citing the World Economic Forum.

LHRs have inspired other platforms that boost connectedness and creating opportunities for a diverse range of people, it said.

“Smart regulators will create policies that embrace change while looking out for the interests of all parties,” Agoda said, adding that many companies provide products and services to meet the needs of this growing industry.