ArrowArtboardCreated with Sketch.Title ChevronCrossEye IconIcon FacebookIcon LinkedinShapeCreated with Sketch.Icon Mail ContactPath LayerIcon MailMenu BurgerIcon Opinion QuotePositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Sharing Economy

Airbnb faces tighter legal squeeze in Hong Kong

Company says tough hotel law would hurt city's competitiveness in Asia

Gina Tsai, head of public policy at Airbnb Hong Kong and Taiwan, said on July 12 that Hong Kong should allow home-sharing. (Photo by Nikki Sun)

HONG KONG -- Airbnb is urging lawmakers in Hong Kong to vote against a bill that would impose stiffer penalties on unlicensed hotels and guesthouses, as the U.S.-based home-sharing platform faces the risk of being driven out of the city.

The hotel industry says Airbnb is operating illegally in the financial hub, and hotels have pushed for the legislation that would lift the maximum fine for operating such accommodations to 500,000 Hong Kong dollars ($63,000) from HK$200,000 -- with potential imprisonment of three years, up from two.

Prosecutors would face a lighter burden of proof, as owners or tenants could be criminally liable from any evidence showing the use of their premises as an unlicensed guesthouse.

"We hope the Legislative Council can veto that bill and put home-sharing into consideration," said Gina Tsai, head of public policy at Airbnb Hong Kong and Taiwan. Airbnb has 10,000 listings in Hong Kong, and more than 1.6 million customers used its platform last year.

The first readingof the amended Hotel and Guesthouse Accommodation Bill took place in the city's Legislative Council on Tuesday, and it can be signed into law as early as next year.

Tsai said Hong Kong should consider adopting specific rules for homeowners instead of outlawing such operations entirely. She suggested enforcing a registration requirement on operators, like Japan did, and enacting strict guidelines for safety and security.

"If Hong Kong wants to keep its competitiveness with other major big cities in Asia-Pacific and around the world, allowing home-sharing would be one of the key factors," Tsai said. City officials should learn from what other governments are doing, she said.

Airbnb was an official partner of the Pyeongchang Winter Olympics in South Korea. In Japan, a law allowing home-sharing took effect in June, although critics argue the strict requirements will drive many homeowners out of the business. Airbnb-style home-sharing remains illegal in Singapore.

Though the home-sharing company pledges it won't "give up the mission in Hong Kong" because of the new legislation, some lawmakers fear Airbnb would be "gradually forced out the city" owing to the tougher law enforcement.

In Hong Kong, rooms listed on Airbnb's site often are used as a cheaper alternative to hotels, whose average room rates reached HK$1,288 last year, official statistics show.

"Essentially, Airbnb is no different from unlicensed guesthouses," Hong Kong tourism lawmaker Yiu Si-wing said. "It's not fair to other licensed operators who invest a huge amount of money to meet government's requirements for hotel owners."

Yiu also cited security concerns for these self-operated accommodations, as buildings in Hong Kong tend to be very tall but have limited space for rooms and staircases.

"Hong Kong has a different reality," he said. "Airbnb can't apply the model it adopts in other places to Hong Kong."

Additional reporting by Sunny Tse

You have {{numberReadArticles}} FREE ARTICLE{{numberReadArticles-plural}} left this month

Subscribe to get unlimited access to all articles.

Get unlimited access
NAR site on phone, device, tablet

{{sentenceStarter}} {{numberReadArticles}} free article{{numberReadArticles-plural}} this month

Stay ahead with our exclusives on Asia; the most dynamic market in the world.

Benefit from in-depth journalism from trusted experts within Asia itself.

Try 3 months for $9

Offer ends September 30th

Your trial period has expired

You need a subscription to...

See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

See all offers
NAR on print phone, device, and tablet media