Is Airbnb in Kota Kinabalu Performing Better Than Kuala Lumpur?
After manufacturing and commodities, tourism is the third biggest contributor to Malaysia’s GDP. In 2019, Malaysia recorded a 26.1mil tourist arrival with 67.5% of majority visits were for holiday purposes. The tourism industry contributed RM86.14 billion to Malaysia's economy and accommodation contributed 24% of the total expenditure after shopping (33.6%).
In between movement control orders, there was an uptick trend in domestic travel as people searched for a change of scenery. While the current tension on travel has people at home, research shows that in time there is still a demand for short-stay operators. So which state capital is a better investment choice for Airbnb? Kuala Lumpur or Kota Kinabalu?
Kuala Lumpur, A City of Contrasts & Diversity
Kuala Lumpur is the capital city of Malaysia and is well-known for its gleaming skyscrapers and a myriad of attractions. One of them is the Petronas Twin Tower marking the emergence of Malaysia into the global economy.
Kuala Lumpur landmark, the Petronas Twin Tower is still standing tall after 22 years. Photo source: Rat007 for Canva Pro
Airbnb units distribution in the city centre of Kuala Lumpur. Most Airbnbs are located within the Golden Triangle. 77% offer the whole unit with a rental size of a studio up to 3 bedrooms. Photo source: Airbnb, Google Map
Kota Kinabalu, The Land Below the Wind
Sabah houses a diverse eco-tourism spot from the highest mountain in the region, world’s best diving spot, golf course, beautiful sunset along the sandy shore and many more. The Land Below the Wind is popular among Asian tourists for holiday purposes (86%).
Kota Kinabalu city centre is quite compact and buildings are located close to each other. Travel distance is not an issue as visitors can stroll around the city to purchase their favourite souvenirs. Photo source: Yusnizam for Canva Pro
Most Kota Kinabalu properties listed in Airbnb are located in the coastal areas or within the vicinity of the city centre, offering convenience and scenic views for the stay. 78% offer the whole unit with a rental size of 1 to 3 bedrooms. Photo source: Airbnb, Google Map
Tourism prediction in Sabah
An estimated 5 million tourists will arrive in Sabah by year 2024. Forecast shows that there will be a shortage of accommodation to cater to these tourist due to the surge of demand.
Airbnbs in Kota Kinabalu are operated by locals to accommodate the in-bound tourists. Oxford Economics reported short-term rental accommodation company Airbnb contributed RM3.98 billion to Malaysia’s GDP and supported 52,100 local jobs as of 2019.
Airbnb guests spent a total of RM11.8 billion, growing at an annual rate of 79.6% in Malaysia.
Airbnb in Kota Kinabalu and Kuala Lumpur, which of these prime locations perform better?
Kuala Lumpur Airbnb Overview
Average daily rate, monthly occupancy rate and monthly revenue of Airbnbs in Kuala Lumpur as of September 2020. Data source: AIRDNA
Kota Kinabalu Airbnb Overview
Average daily rate, monthly occupancy rate and monthly revenue of Airbnbs in Kota Kinabalu as of September 2020. Data Source: AIRDNA
- Average daily rate
Average daily rate Airbnb in Kota Kinabalu is RM40 higher than Kuala Lumpur. During peak season, the average daily rate for Airbnb in Kota Kinabalu is RM46 higher than Kuala Lumpur.
- Average monthly occupancy rate
Average monthly occupancy rate of Airbnb in Kota Kinabalu is the same as Kuala Lumpur. During peak season, the average monthly occupancy rate for Airbnb in Kota Kinabalu is 16% more than Kuala Lumpur.
- Average monthly revenue
Average monthly revenue of Airbnb in Kota Kinabalu is RM467 more than Kuala Lumpur. During peak season, the average monthly revenue for Airbnb in Kota Kinabalu is RM1,947 more than Kuala Lumpur.
**Occupancy rate and revenue are lower due to the Covid-19 pandemic. The statistics may vary according to season, pre and post pandemic.
Is Airbnb in Kota Kinabalu really that profitable as compared to Kuala Lumpur?
Let’s dive deeper into the figures. A group of samples as at September 2020 was taken from Airbnb website comparing Airbnbs in the city centre of Kota Kinabalu and Kuala Lumpur.
Airbnbs Kuala Lumpur
Airbnb units samples in Kuala Lumpur concentrating in Bukit Bintang and its immediate surrounding area. Table by Property Hunter.
Unit size and price range of the property from the selected Airbnb samples in Kuala Lumpur. Info source: Brickz & Land Plus. Table by Property Hunter.
Airbnbs Kota Kinabalu
Airbnb units samples in Kota Kinabalu concentrating in the Off Coastal Highway area. Table by Property Hunter.
Unit size and price range of the property from the selected Airbnb samples in Kota Kinabalu. Info source: Land Plus. Table by Property Hunter.
Based on the figures from the selected samples above, given the same variables:
- 1 bedroom or studio unit
- 1 bathroom or 1.5 bathroom
- High rise units at respective hotspots in Kota Kinabalu at Off Coastal Highway and Kuala Lumpur at Bukit Bintang and its immediate surrounding area.
In conclusion, Airbnbs in Kota Kinabalu performs better than Airbnbs in Kuala Lumpur. Even at a smaller average unit size of 447 sq.ft, Airbnbs in Kota Kinabalu yields better rental return with an average of RM10.38 more per night or RM0.20 more per sq. ft compared to Airbnbs in Kuala Lumpur.
Consider the upcoming Sutera Bay @ Sadong Jaya for a short-stay purpose-built investment choice in Kota Kinabalu. By its expected completion in 2024, Sadong Jaya is set to be a hotspot tourist hub brimming with attractions, just 5 minutes from the coast. Read more about Sutera Bay here.
You can also visit their Facebook page, website or show gallery for more information on how you can earn an estimated annual return of 10-12%. Their operation hours are Monday - Friday, 9 am - 5 pm and Saturday - Sunday, 10 am - 5 pm.
Reference & references
- Malaysia Tourism Performance by Tourism Malaysia
- Malaysia Tourism Statistics by Tourism Malaysia
- Sabah Tourism Statistics by Sabah Tourism Board
- Airbnb contributed RM3.98b to Malaysian GDP in 2019 by The Edge Markets