Online rental platform, Airbnb will likely play a key role in working with the government to rebuild local communities in a post-Covid world. New research from Oxford Economics indicates the platform will support Malaysia’s long-term recovery, providing economic opportunities and job creation for Malaysians.
Oxford Economics’ report, The Economic Impact of Airbnb in Malaysia, explores the total economic impact of Airbnb nationwide between 2015 and 2019.
Commissioned by Airbnb, the report found that Airbnb is now a key pillar of the local tourism industry, contributing as much as RM3.98 billion to GDP and supporting 52,100 local jobs as of 2019.
The report also found Airbnb to have positively impacted the Malaysian economy prior to the Covid-19 crisis. Airbnb guest spending on local communities provides for this as the report suggests that guests spent a cumulative total of RM11.8 billion from 2015 to 2019, spending which grew at an annual rate of 79.6 percent in Malaysia.
For every RM100 spent by Airbnb tourists outside their accommodation spend, approximately RM49 went on shopping, activities and other related items while RM24 were spent on restaurants.
The largest share of spending took place in Kuala Lumpur and Penang but the report found that other parts of Malaysia also benefited from the spending of Airbnb guests. Areas such as Johor and Sabah have seen their share of contribution to national GDP more than double from 2015 to 2019, from 4.0 percent to 9.3 percent and 4.9 percent to 10.7 percent, respectively.
“Airbnb could play an important role in supporting the earlier recovery of domestic travel by helping households, particularly those who seek to substitute an international trip with a domestic one, discover new areas in their own country to visit, said James Lambert, Oxford Economics’ Director of Economic Consulting in Asia.
“In this new environment, Airbnb may be able to play an important role in providing accommodation solutions to under-supplied or otherwise dislocated markets.
In 2019, much of Airbnb’s growth was powered by Malaysians with 63 percent of the guests staying in the 66,000 Airbnb listings in Malaysia were domestic Malaysian visitors, compared with just 43 percent in 2015.
Domestic tourism is a key driver of the industry as domestic tourists represented almost half of the country’s tourism economy in 2019. The upward trend corresponds with the uptick in domestic travel bookings by Malaysians following the government’s announcement of a loosening of movement control restrictions.
“The recovery of national economies and the recovery of the Malaysian tourism industry are inextricably linked, ” said Mike Orgill, Director of Public Policy, Asia Pacific, Airbnb.
“While this report looks back at the recent past, we believe it offers timely insights for the future as we consider whether the current regulatory framework remains relevant and fit-for-purpose. Regulations that may have worked pre-Covid may not work post-Covid.
Airbnb’s growth has been pronounced throughout the Asia Pacific region, with the Silicon Valley company’s economic contribution growing faster than broader tourism, supporting a total contribution of US $22.7 billion to the region’s GDP in 2019.