The Tourism Ministry plans to introduce regulations on global hospitality marketplaces, including rent-a-room giant Airbnb.

Tourism Minister Arief Yahya said recently that a large number of countries have accepted Airbnb, albeit with policies and regulations specific to each country.

“What will Indonesia do? The public wants the easy and affordable option. The government is built on the interest of the public. The issue is how we, as a regulator, can convince the industry that this is inevitable,” said Arief in Jakarta. He added that anything offering affordability and ease of use should not be rejected.

Under the new nationwide regulations, hosts will be categorized by their proximity to hotels. Hosts located in places with few hotels would not be required to register for a permit, and guests can stay up to a maximum of 360 days.

Meanwhile, hosts located in areas with a large number of hotels would be required to register for a permit, and the maximum rental time is capped at 180 days.

The hosts will not be required to pay any taxes as the government considers them to be in the category of micro, small and medium enterprises (MSMEs).

The ministry’s move to ease up on global hospitality marketplaces may be in line with the government’s ambitious target to attract 17 million foreign visitors next year and 20 million in 2019.

Data from the Central Statistics Agency (BPS) shows that 11.62 million tourists visited Indonesia in the January to October period of 2017, an increase of 23.55 percent from the same period last year, during which there were 9.40 million visitors.

Even so, many have called for Airbnb to be blocked in the country, including the Indonesian Hotels and Restaurants Association (PHRI). Hariyadi Sukamdani, the association’s chairman, said the sharing economy business model was a threat to the country’s hotel industry, and accused Airbnb of shirking taxes and regulations imposed on Indonesian hotels.

PHRI will soon launch its own online travel agency (OTA) to compete with Airbnb, bookingina.com, with the same sharing economy principle.

PHRI’s OTA will charge a lower commission rate than what hotels pay to foreign OTAs. The maximum rate for PHRI members is said to be 12 percent, with non-members capped at 15 percent. According to PHRI, existing OTAs charge between 15 and 30 percent.

Airbnb, an app-based rental service, has been facing an increasing worldwide crackdown from legislators worldwide. Most recently, Airbnb dropped a controversial payment system in France after the government asked authorities to look into the system, which is suspected of facilitating tax avoidance.

Airbnb head of public policy for Southeast Asia Mich Goh said in a statement to kompas.com that Airbnb’s home sharing concept enabled locals to generate additional earnings and allowed various communities to reap the benefits of the tourist industry, since guests usually spend their money on local businesses.

She also said hosts received 97 percent of their earnings, with Airbnb charging the rest as commission.

Goh said more than 880,000 guests had come to Indonesia in the last year through Airbnb’s service. Moreover, it boasts over 43,000 Indonesian hosts, with more than 38,000 local homes across Indonesia listed on its website. Each host rents their rooms for 25 nights on average per year, with each guest typically renting from three to seven days per booking, and earning around Rp 28 million (US$1,842) on average.

“We hope to work with the Indonesian government in creating a responsible and sustainable regulation that will enable the home sharing concept to grow and provide benefits for Indonesia,” said Goh. She added that since 2014 Airbnb have paid taxes to more than 340 communities across the world and that guests have contributed more than $510 million in travel and holiday taxes. (jlm)

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