Home-sharing platforms like Airbnb face an uncertain future as the Singapore government passed a legislation last week enforcing a pre-existing guideline by the Urban Redevelopment Authority (URA) that prohibits short-term rentals under six months.
Under URA’s guidelines, home-owners found in violation of the rules face a fine of up to S$200,000 (US$141,400) or jail time for up to a year.
Speaking to parliament, minister for national development, Lawrence Wong, said: “Private residential properties should not be used for other purposes without planning approval, as there is a need to safeguard the living environment of residents in the neighbourhood.”
Saravana Chandrasekar, director of sales at Josco Gsa Travel, feels that this move has been long overdue.
Chandrasekar said: “We recently saw an increase in the number of passengers using these short-term home rentals (and) we have lost revenue from hotel bookings. Operationally, we also had difficulties arranging transfers for guests who were staying in (residential) places in Singapore. We are slightly relieved (about) this act and hopefully sales of hotels and travel agents will increase.”
Millennium Tours and Travel’s director Balaji Narayanan, commented that although the ban of short-term rentals gives them an increased avenue for selling accommodations, players like Airbnb are just one of the many increasing competition they face online.
“Today, (short-term rentals) come on the same platform such as Booking.com and Agoda.com, where they are able to offer competitive rates,” said Narayanan.
However, not all is lost for owners of private residences who still want to home-share.
Wong said: “We do see a role for home-sharing platforms to continue operating in Singapore, so long as they are properly regulated and there is a level playing field between them and similar entities that provide short-term rentals like hotels and service apartments.”
He added that URA is looking into creating a new category of private residences that could host short-term rentals.