Malaysia to Tighten Rules for Short-Term Rental Operators
Short-term rental accommodation (STRA) providers in Malaysia—covering platforms like Airbnb, Booking.com, and other short-stay operators—will soon be required to obtain a business licence from their local authority before registering as tourist accommodation premises.
Tourism, Arts and Culture Minister Datuk Seri Tiong King Sing confirmed that the move is part of an agreement between his ministry and the Housing and Local Government Ministry (KPKT) to strengthen oversight of STRA and other tourist lodging premises.
“This is crucial because licensing and enforcement fall under the jurisdiction of each state’s local authority (PBT),” Tiong stated in a written reply to Parliament.
Aligning STRA Guidelines with the Tourism Industry Act
The licensing change will form part of broader reforms to align the upcoming STRA Planning Guidelines, developed by PLANMalaysia under KPKT, with the Tourism Industry Act 1992 (Act 482).
Tiong confirmed that a preliminary review of Act 482 has been completed, with amendments expected to be tabled in Parliament by the end of 2025 or early 2026.
These amendments follow 54 stakeholder engagement sessions involving nearly 1,000 participants from ministries, agencies, NGOs, and industry players nationwide, including representatives from Sabah and Sarawak.
Proposed updates include:
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Streamlined licensing processes for tourism operators
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Mandatory insurance protection for guests and hosts
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Enhanced enforcement powers for regulatory agencies
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Digital platform registration for booking sites
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Establishment of a Tourism Tribunal for dispute resolution
STRA Guidelines Rollout by Year-End
The Planning Guidelines for STRA will be tabled for Cabinet consideration soon. Once approved, they will be presented to the National Council for Local Government (MNKT), after which they will be adopted by state governments and local councils.
The rollout is targeted by the end of this year, giving operators and investors time to prepare ahead of Visit Malaysia Year 2026.
Implications for Property Owners and Investors
The upcoming framework will directly impact owners and managers of short-term rental units:
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Licence First, List Later – No property can be listed as tourist accommodation without a local authority business licence.
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State-Level Variations – Requirements may differ by state, depending on local council rules and zoning policies.
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Increased Compliance Costs – Licensing fees, insurance coverage, and compliance upgrades may raise operating costs.
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Potential Market Consolidation – Casual hosts may exit the market, favouring professional operators and well-managed properties.
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Greater Consumer Trust – Standardised regulations could boost Malaysia’s appeal to domestic and international travellers.
A More Structured Short-Stay Market Ahead
If implemented effectively, these changes could:
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Improve quality and safety standards for guests
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Give local councils stronger control over STRA growth
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Enhance Malaysia’s positioning in the global short-term rental market
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Increase demand for compliant, centrally located properties in tourism hotspots like Kuala Lumpur, Penang, Langkawi, and Johor Bahru
Bottom Line:
Malaysia’s short-term rental market is entering a new era of licence-based regulation. For investors and operators, now is the time to review compliance strategies, budget for licensing and insurance, and align operations with the forthcoming STRA guidelines.
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