I favour vibrancy where the accommodation is concerned. Fair game for all.

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I continue to use accommodation booking apps like booking.com and airbnb.com these days. I think they serve different markets and situations so the more the merrier. By the way, both of these internet companies are good because both are PROFITABLE and they are not like some startups with ever higher valuation due to never ending financing rounds but continue to suffer losses year after year. Yes, there are many of these so called internet startups with huge potential but it’s always using money from investors to subsidise their services and the road has no ends. Meanwhile, it’s totally different with Booking.com and Airbnb.com

Booking Holdings, the owner of booking.com has reporting good set of numbers for 2018. (click here to read) AirBnB is also a profitable company too. Do read about it here. One of them, AirBnB is said to be hurting / affecting the hotels here in Kuala Lumpur, the capital city of Malaysia.

Article in themalaysianreserve.com KL is the world’s 5th most visited city in the world. Yet, KL has recorded the lowest revenue per available room (RevPAR) among key ASEAN cities as of May 2019. The reason for this is said to be the foreign travellers opting for short-rental units offered by AirBnB as well as overbuilding of hotels within Kuala Lumpur.

According to data from STR Inc, a US-based company that compiles supply and demand data for sectors including the global hotel industry, KL’s RevPAR for the year-to-date (from Jan 2019 up to May 2019) was down by 9.5%. Meanwhile in cities such as Hanoi, Manila, Jakarta and Bangkok recorded growth in RevPAR (a performance metric used in the hotel industry) as at May, while Ho Chi Minh was borderline due to the low demand growth.

Article quoted some industry source as saying, “There are two main reasons behind the drop in revenues. There are too many hotels which are allowed to be built in KL. Unlike in Singapore, hotels are only allowed to build new branches when they reach a certain occupancy rate. But it is not the case in Malaysia. The second reason is the impact of Airbnb accommodations. More foreigners are opting for Airbnb but these units do not carry high overheads like hotels.” The article is a long one and has many other references. Please read Article in themalaysianreserve.com

In my personal opinion, what is even more important is to note that there’s NOTHING wrong with more hotel rooms in Kuala Lumpur versus some other mentioned ASEAN cities because the only reason why more are being built is because these operators of new hotels believe it could be still profitable.

Somehow they will have to find ways to be ever more efficient. If these hotels could no longer operate profitably, it will undergo the usual restructuring and reemerge later, stronger. As for the competition, may the best win. Even I do not use AirBnB all the time and I know of a friend who’s a supporter of agoda.com too. Happy going vacationing and enjoying the best rates.

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