Ministry of Tourism Sets Five Points of Airbnb Restrictions in Indonesia

Ministry of Tourism, Arief Yahya, allows Airbnb and similar accommodation marketplace services to operate in Indonesia by five-point restrictions.

“Airbnb is all around the world, and each countries welcome it well,” Yahya said, quoted from CNN Indonesia.

He said the rise of this services is inevitable in hotel business transformation. In the meantime, hoteliers need to think of ways to deal with it.

Ministry of Tourism has prepared five-points restrictions. Firstly, related to territorial coverage, this regulation will apply throughout Indonesia. Secondly, regarding the length of stay (LoS) limits. Ministry of Tourism gives two types of LoS limits to the accommodator who use service providers like Airbnb.

Maximum time of 360 days (a year) for the accommodator using services of player in area with fewer inns, otherwise the more hospitable area has maximum time of 180 days (9 months). Furthermore, minimum length of stay is set, should be more than a day.

“It has to be more than a day. In Singapore, Airbnb home rentals cannot be less than three months.”

Third, is the point about taxation. Ministry of Tourism is leaving accommodators tax-free. He said, accommodators and other similar companies are small and medium business entrepreneurs.

Forth, for business licensing. Ministry of Tourism is not requiring business license for those operating in tourist destination with fewer inns. The regulation is applied otherwise for those in the area with lots of inns.

Lastly, it is about homestay service standards. In the area with fewer inns, the accommodator must have a hotel service standard. It is applied otherwise.

Compete with Airbnb?

To compete Airbnb with local experience, Ministry of Tourism and PHRI are preparing to launch BookingINA platform. It is yet to operate.

This platform's business model is to list various hotels and restaurants incorporate under PHRI to cooperate in selling and applying sharing economy concept.

“I can guarantee it will be more affordable than foreign OTA. Hopefully, we can finish it in a month,” said PHRI's Vice Chairman, Rainier H Daulay.

– Original article is in Indonesian, translated by Kristin Siagian