The Penang Island City Council (MBPP) is working on extending its regulations for tourist accommodation premises (TIP) to cover the George Town UNESCO World Heritage Site, as the state looks to better manage the growing short-term rental industry. State Local Government and Town and Country Planning Committee chairman H’ng Mooi Lye said the move was agreed upon during a meeting involving MBPP, PLANMalaysia and George Town World Heritage Incorporated (GTWHI) on Sept 28.

The council is now drawing up specific guidelines, including the proportion of buildings or premises that can be used for tourist accommodation within the heritage area. The guidelines will consider existing land use, zoning, planning policies and heritage conservation needs, while ensuring that George Town retains its character as a living heritage site.

The move comes alongside revisions to Penang’s Private Short-term Accommodation (Local Authorities of Penang) By-laws 2026, which will take effect on Jan 1, 2027. Under the revised fee structure, the annual licence fee will be reduced from RM1,000 to RM500 per unit. The tourist accommodation premises fee will also be adjusted according to the number of rooms, ranging from RM400 for units with one room to RM1,800 for premises with five to 10 rooms. The maximum permitted room count has also been increased from five to 10, subject to local authority requirements.

The changes have been welcomed by the Penang Malaysia Homestay/Short-Stay Operators Association, although the group is hoping for further flexibility. Its chairman, Lydia Tan, said the association would like to see a single licence covering up to 10 units, rather than requiring operators to apply for separate licences for each property. She said this would help simplify the application process and reduce administrative costs for operators. The association has also proposed setting up a working committee with the state government to discuss industry-related matters.

The latest developments reflect the state’s efforts to strike a balance between supporting the short-term accommodation industry, addressing concerns from local residents and preserving George Town’s heritage character.

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