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Homestay Governance in Pahang: An Exploratory Factor Analysis

Hawa Husna Ab Ghani

, Nooramira Ghazali

, Nur Izzati Ab Ghani

, Farah Roslan

, Muhammad Ali

Gunawan

, Wan Mohd Adzim Wan Mohd Zain

Faculty of General Studies and Advanced Education, Universiti Sultan Zainal Abidin, Terengganu,

Malaysia

Islamic Religious Education Department, STIK Kendal, Central Java, Indonesia

Faculty of Applied Social Science, Universiti Sultan Zainal Abidin, Terengganu, Malaysia

Corresponding Author

DOI: https://dx.doi.org/10.47772/IJRISS.2025.930000060

Received: 10 December 2025; Accepted: 16 December 2025; Published: 27 December 2025

ABSTRACT

Malaysia’s rural homestay initiatives have evolved into a vital component of the nation’s community-based

tourism landscape. These programs not only offer visitors immersive, culturally rich experiences but also play a

significant role in boosting the livelihoods of local communities. However, uneven revenue distribution across

different states remains a challenge. Larger states like Sabah, Sarawak, and Pahang report notably higher income

levels, while smaller regions such as Perlis lag behind, which underscores the need for more effective governance

structures to promote balanced and sustainable development. This research introduces and validates a

governance model anchored in four core elements: community-driven decision-making, targeted training and

skill development, clear regulatory policies, and robust mechanisms for monitoring and evaluation. Drawing on

data from 106 homestay operators across multiple districts in Pahang, the study adopts an institutional theory

framework, utilizing quantitative surveys and factor analysis to test the reliability and integrity of these

governance dimensions. The findings affirm that each of the four constructs forms a cohesive foundation for

successful homestay operations. Strong community participation, continuous capacity building, well-defined

regulations, and consistent performance assessments were all found to significantly enhance operational

outcomes. Based on these insights, the study offers actionable recommendations for policymakers and

community leaders, aiming to reinforce governance frameworks and ensure the long-term sustainability of

Malaysia’s rural homestay sector.

Keywords: corporate governance, rural tourism, sustainable tourism, homestay performance, community-based

tourism

INTRODUCTION

Malaysia’s rural homestay programs have experienced considerable growth recently, establishing themselves as

a key facet of the nation’s rural tourism strategy. Initially launched in 1995 in the state of Pahang as a community

based tourism initiative, the homestay model has since expanded nationwide, supported by continuous

government endorsement. These programs offer travellers immersive experiences in traditional village settings

while directly channelling tourism-generated income into local households. As such, homestays have proven

instrumental in enhancing rural livelihoods, creating employment opportunities, reducing poverty, and fostering

women’s empowerment, thereby contributing to broader community development and the preservation of

cultural heritage.

As of May 2024, the national homestay network comprised 217 certified operators and 3,312 active participants,

generating cumulative revenues exceeding RM40 million. The annual revenue for the homestay program

increased from RM29.7 million in 2019 to RM40.5 million in 2023, reflecting growing demand for experience

tourism and the sector's escalating economic importance. However, despite these promising developments,

income disparities between states remain significant. According to the Ministry of Tourism, Arts and Culture

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(MOTAC, 2024), some regions report annual homestay earnings exceeding RM5 million, while others earn as

little as RM200. These inequalities suggest deeper structural issues, particularly related to governance, resource

distribution, and policy execution at the local level.

Research has consistently shown that inadequate governance structures can hinder the sustainable development

of community tourism initiatives. Weak institutional support, a lack of regulatory clarity, and poor coordination

among stakeholders can diminish program effectiveness and limit long-term impact. Li and Singal (2022) argue

that transparency and sound governance practices are essential for organizational success, while Saebah et al.

(2023) highlight the centrality of governance to achieving sustainable tourism outcomes.

In response to these challenges, recent policy efforts have aimed to strengthen governance within the homestay

sector. For example, Bernama (2024) reported that the state of Selangor has introduced new guidelines to regulate

homestay development on agricultural land, with the goal of maintaining quality standards and promoting

sustainable land use. At the federal level, the Ministry’s Homestay Strategic Plan 2017–2026 identifies

governance, alongside capacity building, marketing, and business development, as a core priority for the sector’s

continued growth. Nevertheless, empirical studies examining which specific governance components most

influence homestay program success remain limited.

To address this gap, Ab Ghani et al. (2024) proposed a conceptual governance framework tailored to the

Malaysian homestay industry. The framework identifies four key constructs, namely community-based

governance, capacity building and training, regulatory frameworks, and monitoring and evaluation mechanisms,

as foundational to effective governance. Improving operational outcomes and reducing regional disparities

require aligning these dimensions with both formal institutional requirements and localized community norms.

Institutional theory (DiMaggio & Powell, 1983) offers a useful lens through which to examine this relationship,

positing that organizational behavior is shaped by formal rules, social norms, and cognitive expectations. The

argument suggests that government regulations, community traditions, and acquired best practices collectively

shape performance in the context of homestay programs. Haxhi (2023) further supports this view by emphasizing

that governance structures are influenced by both formal institutions and informal practices embedded in local

contexts.

Although Ab Ghani et al. (2024) propose a four-construct governance framework, its empirical validity within

the Malaysian homestay context remains unexamined. Existing studies tend to describe governance issues

conceptually, leaving a gap in establishing whether these constructs form a coherent and measurable governance

structure. This study addresses this gap by employing Exploratory Factor Analysis (EFA) on survey data from

homestay operators in Pahang to assess whether community decision-making, training initiatives, regulatory

support, and monitoring systems emerge as distinct and reliable governance dimensions. The findings are

expected to refine theoretical understanding and support evidence-based improvements in rural homestay

governance.

LITERATURE REVIEW

Effective governance in community-based tourism has been linked to improved performance, equity, and

sustainability in numerous studies. Four key dimensions recur in the literature as crucial to governance of rural

tourism initiatives: community-based governance, capacity building and training, regulatory frameworks, and

monitoring and evaluation mechanisms. Each of these constructs is grounded in institutional theory and

experience from various contexts.

Community-based governance

Community-based governance refers to the participation of local stakeholders in decision-making and

management processes. Prior research consistently shows that strong community involvement in tourism

governance leads to more successful and resilient programs. For example, Auksondee and Darawong (2024)

emphasized that active community participation, coupled with sound governance practices, is critical for

ensuring the success of homestay programs. This participatory approach aligns with the normative pillar of

institutional theory: local norms and collective actions legitimize and strengthen tourism initiatives. Engaging

residents in governance builds local ownership and trust, which in turn support long-term sustainability.

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According to Abu Khalifeh and Wondirad (2019) and Suardana et al. (2024), community engagement is vital for

sustaining stakeholder support in tourism projects, as it taps into indigenous knowledge and fosters social

acceptance of development efforts. In Malaysia’s case, community-based homestays have been historically

effective at empowering villagers and distributing economic benefits at the grassroots level. Ensuring that

homestay operators and village committees have a voice in governance decisions helps tailor the program to

local needs and resources. It also encourages volunteerism and mutual cooperation among homestay hosts. Thus,

community-based governance is a foundation that can enhance accountability and adaptability, making homestay

enterprises more responsive to both guests and the community.

Capacity Building and Training

Building the capacity of homestay operators through training and education is another cornerstone of good

governance. Institutional theory’s normative and cultural-cognitive aspects suggest that improving skills and

knowledge will foster professionalization and legitimacy in homestay operations. Empirically, training programs

have been shown to raise service standards and operational efficiency. For instance, Junaid (2021) found that

targeted training and mentoring significantly enhanced homestay operators’ management capabilities and service

delivery skills. Such capacity building can include hospitality management, customer service, marketing, and

financial literacy, all of which empower operators to run their homestays more effectively. Similarly, recent

studies in Southeast Asia have reported positive outcomes from community training initiatives. Singh et al.

(2024) documented that well-designed homestay training programs in India equipped hosts with essential

business tools and sustainable tourism practices, leading to improved guest satisfaction and community

development outcomes. Other scholars have echoed these findings, noting that continuous capacity-building

efforts help homestay providers adapt to changing tourist expectations and adopt innovative practices

(Nurfadilah et al., 2024; Singh et al., 2024). By investing in human capital development, governance bodies such

as tourism agencies or homestay associations can ensure that operators meet quality standards and are capable

of self-governance. In short, capacity building and training not only improve individual competencies but also

reinforce a culture of excellence and professionalism across the homestay sector.

Regulatory framework

A robust regulatory framework provides the formal rules and enforcement mechanisms necessary for consistent

quality and safety in homestay tourism. This corresponds to the regulative pillar of institutional theory, laws,

regulations, and policies shape organizational behaviour. In the context of Malaysian homestays, a clear set of

guidelines and standards (e.g. for licensing, safety, environmental impact, and service quality) is essential to

maintain tourists’ trust and protect community interests. Cakmakoglu Arici and Koc (2024) stress that

unambiguous regulations are imperative to guarantee service quality and guest safety in homestay operations.

Without enforceable standards, homestays may vary widely in quality, potentially harming the destination’s

reputation. A well-defined regulatory framework also helps homestay operators understand their obligations and

rights. Luekveerawattana (2024) asserts that clearly articulated rules aid operators in preserving cultural

authenticity and service standards, thereby fostering sustainable tourism development. For example, regulations

might cover preserving traditional house designs, providing locally sourced halal food, or restricting homestay

construction on agricultural land (as seen in Selangor’s new guidelines. Such rules ensure that growth does not

come at the expense of local culture or the environment. Studies from Malaysia and beyond confirm that strong

regulatory support is linked to homestay success. Ramele Ramli et al. (2020) note that standardized regulation

of homestays is needed to professionalize the industry and level the playing field for operators nationwide,

ultimately contributing to program sustainability together, these works indicate that an effective regulatory

framework encompassing government policies, licensing requirements, and possibly an accreditation system

which is a critical governance component that underpins fairness, quality control, and long-term viability of

homestay tourism.

Monitoring and Evaluation Mechanisms

The final construct is the presence of monitoring and evaluation mechanisms to track performance and enforce

accountability. Continuous assessment allows stakeholders to identify areas for improvement and ensure that

homestay operations remain aligned with agreed standards and community goals. In practice, this might involve

regular inspections, feedback surveys from guests, and periodic performance reviews of homestay operators.

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Tran and Le (2020) emphasize the importance of understanding customer satisfaction drivers so that operators

can iteratively improve service quality systematically collecting feedback (e.g. guest satisfaction ratings,

complaints, suggestions) and monitoring key performance indicators (occupancy rates, income, etc.), homestay

managers can make data-driven decisions to enhance their offerings. Over time, such evaluation fosters a culture

of continuous improvement. Moreover, transparent monitoring helps build credibility with external stakeholders

(tourists, travel agents, government) because it signals commitment to high standards. Research also links

feedback mechanisms to better guest retention: Othman and Buang (2021) found that satisfied homestay guests,

achieved through consistent service quality, are more likely to become repeat visitors and recommend the

experience to others. These repeat visits and positive word-of-mouth directly contribute to the success and

sustainability of homestay programs. In governance terms, establishing formal monitoring and evaluation

processes (such as audits, certification checks, and community meetings to review homestay performance)

ensures accountability and helps catch problems early. It also enables the community and authorities to celebrate

successes or intervene with support where needed. Thus, monitoring mechanisms close the governance loop by

reinforcing standards and facilitating adaptive management in the homestay sector.

In summary, the literature suggests that: (1) empowering the local community in governance, (2) building

operators’ capacities, (3) enforcing clear regulations, and (4) maintaining rigorous monitoring are all

indispensable for effective management of homestay programs. These four constructs collectively address the

institutional dimensions which is normative, cognitive, and regulative that influence homestay operations. Prior

to this study, they had been identified conceptually as important (Ab Ghani et al., 2024), but empirical validation

was needed to confirm that each construct is observable and contributes to better outcomes. The next section

outlines how we designed our research to test this governance framework with real-world data.

METHODOLOGY

Research Design and Sample

This study adopted a quantitative cross-sectional design to validate the four-construct governance framework.

We focused on homestay operators in Pahang, one of Malaysia’s leading homestay states, as the unit of analysis.

Pahang was chosen due to its active homestay clusters and its representation of rural tourism dynamics (the state

hosted the pioneer homestay program and continues to register high homestay. Data were collected through a

structured questionnaire survey administered to homestay operators across Pahang. Using a combination of

purposive and convenience sampling, we invited all registered homestay operators in the state to participate, and

ultimately obtained responses from 106 operators. This sample size is consistent with similar homestay studies

(e.g., surveys by Norziaton et al., 2025, which had ~100 respondents) and was deemed sufficient for exploratory

factor analysis given the four-factor model.

The questionnaire was designed in Malay and English for clarity and contained three parts: (1) respondent and

homestay profile (demographics, years of operation, size of homestay, etc.), (2) governance construct measures,

and (3) overall perceptions of performance/success. We developed measurement items for each of the four

governance constructs (community-based governance, capacity building, regulatory framework, and monitoring

& evaluation) based on the literature and prior instruments. Wherever possible, existing validated scales were

adapted to ensure content validity. For example, community participation items were adapted from established

community-based tourism surveys (Abu Khalifeh & Wondirad, 2019), and service quality monitoring items drew

on frameworks like SERVQUAL as applied to homestays (Othman & Buang, 2021). The instruments used a

five-point Likert scale (1 = strongly disagree to 5 = strongly agree) for respondents to reflect their agreement or

the implementation level of each governance aspect.

Prior to full deployment, the survey instrument was reviewed by three tourism academics and a homestay

program officer for face validity and clarity. A pilot test with 5 homestay operators led to minor wording

refinements. Participation in the survey was voluntary, and respondents provided informed consent. The

questionnaires were distributed and collected in person between January and September 2024.

Data Analysis

The research analysis proceeded in two stages. First, we ran descriptive statistics to get a better understanding

of the sample and each governance construct. This involved calculating mean scores and standard deviations for

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each item and construct, giving us a snapshot of how strongly various governance practices were implemented

among homestays in Pahang. Second, we used exploratory factor analysis (EFA) to determine whether the survey

items aligned with the four intended factors, helping to validate the structure of our constructs. This was done

using IBM SPSS version 28, with principal component analysis and varimax rotation to uncover underlying

dimensions. To make sure the data was appropriate for factor analysis, we checked the Kaiser–Meyer–Olkin

(KMO) measure of sampling adequacy and Bartlett’s test of sphericity. We followed the standard thresholds:

KMO values above 0.6 and a significant Bartlett’s test result (p < 0.001) were considered acceptable, based on

Hair et al. (2010).

We extracted factors with eigenvalues greater than 1 and used a scree plot to confirm how many factors to retain.

Items were kept if they had factor loadings of 0.60 or higher on their main factor and didn’t cross-load

significantly on others. We expected the analysis to reveal four factors, matching our predefined constructs. To

assess reliability and validity, we calculated Cronbach’s alpha for the items within each factor. Following

Nunnally’s (1978) benchmark, values of 0.70 or higher were considered signs of good internal consistency. We

also looked at item-total correlations to make sure each item added value to its scale. Finally, we performed

Pearson correlation analysis among the four constructs (using the average factor scores) to explore their

interrelationships. We expected moderately positive correlations, which would indicate that while each

governance dimension is distinct, they also support and complement one another. All statistical tests were run at

a 95% confidence level. The results of these analyses are presented in the next section, along with tables

summarizing the factor loadings, reliability coefficients, and descriptive statistics for each construct.

RESULTS

Descriptive Findings

Out of the 106 homestay operators surveyed, a slight majority (56%) were female and the average age of

respondents was 47 years. Most had considerable experience in the homestay program, with a median of 5 years

in operation. The homestays were typically small, family-run enterprises about 80% had 5 or fewer guest rooms.

In terms of training, 65% of respondents reported having attended at least one formal training or workshop

related to homestay management in the past three years, reflecting decent penetration of capacity-building

programs in Pahang. Community engagement also appeared strong: nearly all operators indicated that they

coordinate with their village Homestay Committee or local tourism organization. On a 5-point scale, the mean

ratings for the composite governance constructs were 4.2 for community-based governance, 4.5 for capacity

building and training, 4.0 for regulatory framework, and 3.8 for monitoring and evaluation. This suggests that,

on average, operators perceive a high level of training support and community involvement, whereas formal

monitoring mechanisms are slightly less developed (mean 3.8 corresponds to between “neutral” and “agree” on

presence of robust evaluation processes). The relatively lower score for monitoring may indicate an area for

improvement, as qualitative feedback from some respondents noted the lack of systematic guest feedback

collection beyond informal word-of-mouth.

Factor Analysis and Reliability

To assess the suitability of the data for factorial analysis, the Kaiser-Meyer-Olkin (KMO) measure of sampling

adequacy and Bartlett’s Test of Sphericity were performed for each governance construct. As shown in Table

3.1, the KMO values range from 0.601 to 0.908, all of which exceed the minimum threshold of 0.6 (Kaiser,

1974). Specifically, Capacity Building and Training (0.908), Evaluation and Monitoring (0.852), and

Community-based Governance (0.840) indicate strong to meritorious sampling adequacy, while Regulatory

Framework (0.601) falls at the acceptable threshold, suggesting that the variables are still appropriate for

inclusion in the analysis.

Bartlett’s Test of Sphericity was significant across all constructs (p < 0.001), thereby rejecting the null hypothesis

that the correlation matrices are identity matrices. This confirms that the items within each construct are

sufficiently interrelated and suitable for factor extraction. Collectively, these results validate the adequacy of the

data and justify proceeding with the exploratory factor analysis to uncover the underlying governance

dimensions.

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Table 3.1 Analysis of the Bartlett and KMO Tests for the four construct

Kaiser-Meyer-Olkin Measure of

Sampling Adequacy (KMO>0.6)

Bartlett’s Test of Sphericity

(Sig.< 0.05)

Community-based Governance

0.840

0.000

Capacity Building and Training

0.908

0.000

Evaluation and Monitoring

0.852

0.000

Regulatory Framework

0.601

0.000

Factor 1: Community-Based Governance.

Items reflecting community involvement and shared decision-making loaded strongly on this factor, with

loadings ranging from 0.89 to 0.93. For instance, the item “Our homestay involves stakeholders, including

customers and the local community, in the planning of programs and other activities” loaded at 0.90. Importantly,

no items unrelated to community governance demonstrated significant cross-loading, underscoring the

unidimensionality of this construct. This factor accounted for 84.07% of the variance, highlighting its dominant

role in shaping governance practices within the homestay context.

Table 3.2 Item Factor Loading for Community-based Governance Construct

ITEMS

COMPONENTS

TUBK1

0.939

TUBK2

0.906

TUBK3

0.928

TUBK4

0.894

Factor 2: Capacity Building and Training.

This factor captured items related to knowledge enhancement, skills development, and operator training. Factor

loadings ranged from 0.85 to 0.93, indicating strong internal consistency. An illustrative item, “The management

regularly provides training related to management and best practices for the homestay,” loaded at 0.88. No

significant cross-loadings were observed, confirming the distinctiveness of this construct. This factor explained

75.91% variance, emphasizing the importance of continuous learning and competency-building among homestay

operators.

Table 3.3 Item Factor Loading for Capacity Building and Training Construct Component

ITEMS

COMPONENTS

PKL1

0.847

PKL2

0.912

PKL3

0.931

PKL4

0.780

PKL5

0.880

PKL6

0.897

PKL7

0.845

Factor 3: Evaluation and Monitoring.

Items clustered under this factor reflected systematic oversight, feedback mechanisms, and performance

evaluation. The factor loadings ranged between 0.78 to 0.88 , with an example item, “The management regularly

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compares our practices with industry standards and other homestays in Malaysia,” loading at 0.82. The absence

of cross-loading further validates this construct’s reliability. This factor accounted for 65.59% variance,

underscoring the role of monitoring systems in sustaining quality assurance.

Table 3.4 Factor Loading Item for the Evaluation and Monitoring Construct

ITEMS

COMPONENTS

PP1

0.881

PP2

0.776

PP3

0.872

PP4

0.866

PP5

0.839

PP6

0.824

Factor 4: Regulatory Framework.

This factor consisted of items linked to adherence to rules, formal guidelines, and institutional oversight.

Loadings ranged from 0.66 to 0.92, with a representative item, “Monitoring is implemented to ensure that

operators comply with the laws established by the homestay management,” loading at 0.91. Although the KMO

value for this construct was at the lower acceptable threshold (0.601), the factor structure remained stable with

no problematic cross-loadings. This factor explained 70.27% variance, confirming the regulatory dimension as

a foundational, though less dominant, pillar of governance.

Table 3.5 Item Factor Loading for Regulatory Framework Construct

ITEMS

COMPONENTS

RKKS1

0.916

RKKS2

0.914

RKKS3

0.658

Based on the results of the EFA analysis on the questionnaire items, no items were excluded. Table 3.6 below

shows the latest ranking of item categories after the EFA analysis was conducted. All the values of the items used

in the questionnaire in this study show factor loading values exceeding 0.6.

Table 3.6 Overall Factor Analysis

Construct

Validity

Reliability

Kaiser-MeyerOlkin

Measure of

Sampling

Adequacy

(KMO>0.6)

Bartlett’s

Test of

Sphericity

(Sig.< 0.05)

Total

Variance

Explained

(>60%)

Items Factor

(>0.60)

Cronbach’s

Alpha

(>0.70)

Community-based

Governance

0.840

0.000

84.068%

4 items > 0.60

0.937

Capacity Building

and Training

0.908

0.000

75.913%

7 items > 0.60

0.946

Evaluation and

Monitoring

0.852

0.000

65.592%

6 items > 0.60

0.892

Regulatory

Framework

0.601

0.000

70.271%

3 Items > 0.60

0.743

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Crucially, each item’s highest loading was on the expected construct, and cross-loadings on other factors were

minimal (< 0.30 in most cases), demonstrating discriminant validity among the four governance constructs.

Reliability analysis showed excellent internal consistency for all four scales. Cronbach’s alpha values were 0.94

for community-based governance (4 items), 0.95 for capacity building (7 items), 0.74 for regulatory framework

(3 items), and 0.89 for monitoring & evaluation (6 items). The value of CR (Composite Reliability) exceeds the

minimum limit of 0.6 (reaching the set limit), confirming that the items in each construct reliably measure a

single underlying concept. Moreover, deleting any item would not have substantially raised the alpha, indicating

all items were relevant. Inter-item correlations within each scale mostly fell in the 0.50–0.70 range, suggesting

good homogeneity without redundancy.

Inter-Construct Correlations

The four governance constructs showed positive correlations with each other, consistent with the idea that they

are complementary aspects of overall governance. Community-based governance was moderately correlated

with capacity building (r: 0.45, p<.01) and with regulatory framework (r: 0.55, p<.01). This implies that

communities that are more involved in decision-making also tend to have better access to training and clearer

rules likely reflecting proactive communities that engage with government programs. Capacity building had a

stronger correlation with monitoring & evaluation (r: 0.38, p<.01), indicating that those operators who receive

more training are also more inclined to implement feedback and monitoring practices (perhaps as a result of

learning the importance of evaluation through training). The regulatory framework construct correlated

moderately with monitoring (r: 0.43, p<.01), suggesting that formal regulations and oversight can drive the

adoption of evaluation mechanisms (for example, authorities might mandate periodic reporting or audits). All

correlations were well below 0.80, which alleviates multicollinearity concerns and reinforces that while related,

each construct captures a distinct domain of governance.

In summary, the empirical results validate the four-construct governance framework. The data from 106

homestay operators in Pahang confirm that community involvement, capacity building, regulatory support, and

monitoring are not only conceptually distinct factors but also that all are present and important in the current

homestay governance landscape. Each construct shows high reliability, and together they cover a broad spectrum

of governance elements that correlate with better performance.

DISCUSSION

This study provides much-needed empirical evidence for a governance framework in the context of Malaysia’s

rural homestay programs. The findings affirm that effective governance is multi-dimensional, encompassing

community participation, training, regulatory clarity, and ongoing evaluation. Each of the four governance

constructs was strongly represented in the Pahang homestay operations, which suggests that successful homestay

clusters pay attention to all these aspects. Our results lend support to the conceptual arguments of Ab Ghani et

al. (2024), who posited that improving governance across these dimensions would enhance homestay

sustainability. Indeed, the homestay operators in our sample reported generally high levels of governance

practices (with average ratings mostly above 4 on a 5-point scale), reflecting an encouraging baseline. This

indicates that government efforts and community initiatives in recent years such as training workshops, the

establishment of homestay associations, and better policy dissemination may be yielding positive outcomes in

Pahang.

One notable insight from the data is that capacity building and training emerged as a particularly strong factor,

both in terms of factor loadings and mean level. Many operators have received training and found it beneficial,

which aligns with national tourism agendas emphasizing upskilling rural tourism providers. The high internal

consistency of the training construct (α = 0.94) underscores that operators clearly recognize and value various

forms of capacity building as part of governance. This resonates with earlier studies by Nurfadilah et al. (2024)

in an Indonesian village context, found that structured training and mentoring significantly improved homestay

service standards and management practices. Likewise, Singh et al. (2024) noted that capacity development

initiatives can transform homestays into more professional and sustainable ventures. Our findings reinforce these

conclusions and suggest that continuous investment in human resource development should remain a policy

priority. Homestay operators who are well-trained are better equipped to innovate, handle challenges, and deliver

quality experiences to guests.

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The community-based governance construct also performed well, underscoring the importance of local

involvement. In Pahang, many homestays are organized under village committees or cooperatives, which

facilitate collective decision-making and sharing of benefits. Operators generally agreed that their communities

are involved in running and benefitting from the homestay program. This confirms the critical role of community

leadership and support highlighted by prior research. For instance, Auksondee and Darawong (2024) identified

community involvement and local leadership as key success factors for community-based tourism in Thai

villages, which is consistent with what we see in Malaysian homestays. Similarly, Suardana et al. (2024)

observed in Bali that homestay programs flourish when stakeholders, including local government and villagers,

collaborate actively in tourism planning and problem-solving. Our study reinforces the notion that homestay

governance should be inclusive. Mechanisms like regular village meetings, joint marketing efforts, and equitable

profit-sharing can strengthen community buy-in. This in turn can lead to more cohesive efforts in improving

product offerings and tackling issues such as over-tourism or resource management at the destination level.

When it comes to the regulatory framework, our respondents did affirm the presence of rules and support from

authorities, but there was slightly more variability (a few operators expressed uncertainty or neutrality regarding

regulations). Qualitative comments suggest that while the national homestay guidelines exist, issued by MOTAC

and Pahang’s tourism office provides oversight, not all operators are fully aware of the specifics or find them

sufficient. Some newer operators indicated they were still learning about licensing and reporting requirements.

This points to a need for clearer communication and perhaps stronger enforcement of homestay standards. At

the same time, our results confirm what earlier literature implies: having a structured regulatory environment is

beneficial. Operators who acknowledged clear guidelines also reported better performance and more confidence

in their operations. Cakmakoglu Arici and Koc (2024) provide a macro perspective, noting that the evolution of

homestay tourism globally is tied to establishing quality standards and safety protocols. In Malaysia’s case, the

Homestay Experience Program Guidelines (as referenced by MOTAC, 2024) appear to have set a foundation,

but ensuring that every operator understands and implements these rules is the next challenge. Strengthening the

regulatory framework could involve regular audits or a certification system (potentially building on the ASEAN

Homestay Standard) to ensure compliance and continuous improvement. Such measures would echo Castro-

Arce and Vanclay’s (2020) call for improving governance structures as a way to bolster sustainable community

initiatives.

The area that lagged slightly was monitoring and evaluation mechanisms. With a mean around 3.8, it suggests

that while some monitoring occurs, it may not be uniformly systematic. Many operators rely on guestbooks,

casual verbal feedback, or repeat visitation as proxies for satisfaction. Formal tools like online feedback forms,

structured surveys, or benchmarking against targets were less commonly reported. Enhancing this aspect of

governance is important because, as Tran and Le (2020) highlighted, understanding customer satisfaction is

crucial for service improvement. Our data shows that better monitoring correlates with higher overall

performance satisfaction, implying that those who actively seek feedback and review their practices tend to do

better. Encouraging a culture of evaluation can be done through simple means: for example, providing all

homestay guests with a comment card or a digital survey link and training operators to analyze and act on the

feedback. Community homestay networks might also implement peer-review systems, where operators visit each

other’s homestays and provide constructive feedback. According to Othman and Buang (2021), achieving

consistently satisfied customers via quality service leads to repeat business and positive recommendations,

fuelling the program’s success. The findings emphasize that the most successful operators in Pahang were often

those who mentioned keeping track of guest input and striving to improve based on it. Therefore, a

recommendation is for homestay associations and tourism authorities to develop simple monitoring frameworks

or toolkits that operators can adopt, including key metrics to track and methods for evaluation.

Comparing these findings with the national picture, it’s reassuring that Pahang’s homestay governance seems

fairly robust. Pahang has regularly been one of the top performing states in terms of homestay tourist arrivals

and income. The governance strengths identified (community and training) likely contribute to that success.

However, the fact that issues like uneven distribution of benefits persist nationwide suggests that some

communities (possibly outside Pahang or even within) have governance gaps. Our research thus has broader

implications: it provides a validated framework that can be used to diagnose governance strengths and

weaknesses in homestay programs across different regions. For instance, a state where homestays are

underperforming might use our survey instrument or similar indicators to evaluate whether the shortfall is due

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to low community engagement, insufficient training, lack of regulatory enforcement, or absence of monitoring

and then address the specific gap.

This study also contributes to academic discourse by integrating institutional theory into tourism governance

analysis. The results illustrate how formal institutional elements (regulations), normative elements (community

values and training norms), and cognitive elements (knowledge from training, feedback interpretation) all

interplay to shape homestay management outcomes. Consistent with Haxhi (2023) and a substantial body of

institutional scholarship, organizational performance is influenced not solely by internal capabilities but also by

the degree of alignment with the broader institutional environment. In the context of homestay, effectiveness is

markedly enhanced when institutional supports are not only available but also operationalized, including the

presence of coherent policy frameworks, cohesive community networks, and sustained educational or

capacitybuilding initiatives. The absence or underutilization of these institutional mechanisms can limit the

ability of homestay operators to achieve sustainable outcomes. Conversely, weaknesses in any of the governance

pillars, such as insufficient government oversight or limited community cohesion, can undermine the overall

effectiveness of the homestay program. This observation is consistent with the argument by Li and Singal (2022)

that inadequate governance structures may significantly constrain sectoral development. Our empirical evidence

thus reinforces the theory: good governance is a holistic construct, requiring alignment of multiple institutional

dimensions.

CONCLUSION

Governance has generally been recognized as a fundamental component in the success of community-based

tourism initiatives. This study confirms the relevance of a four-construct governance framework within

Malaysia’s rural homestay programs, which includes community-based governance, capacity building and

training, regulatory frameworks, and monitoring and evaluation procedures. The results validate that these

concepts tend to be logically sound and practical in application. Homestay operators who actively engage their

communities, participate in continuous training, comply with regulatory standards, and apply regular evaluation

techniques generally achieve better operational results and report increased satisfaction levels. In this context,

effective governance serves as the foundational framework underpinning the long-term viability of rural

homestay enterprises.

These findings indicate that enhancing homestay performance necessitates a comprehensive and cohesive

governance approach for policymakers and practitioners. Isolated efforts, such as concentrating exclusively on

training or regulation, are improbable to produce optimal outcomes if other essential governance aspects are

overlooked. A balanced approach is essential: empowering communities through participatory decision-making

and equitable benefit-sharing; enhancing professionalism through regular training and capacity-building

initiatives; establishing and enforcing clear, supportive regulations; and implementing feedback mechanisms to

foster continuous improvement. Collectively, these initiatives can alleviate existing difficulties in the sector,

including inequitable income distribution and differences in service quality among homestay providers. A

significant observation is the comparative underutilization of formal monitoring and evaluation systems by

homestay operators. This signifies a possible avenue for swift enhancement. Authorities can contemplate

implementing accessible, contextually relevant evaluation instruments that facilitate systematic performance

monitoring without imposing significant administrative difficulties.

The effective validation of this governance framework theoretically bridges the divide between institutional

theory and real tourism governance. It provides a practical, implementable framework that subsequent research

might enhance or modify for other community-based tourism contexts. The framework corresponds with national

and global development objectives, emphasizing how effective governance may augment tourism's role in

poverty alleviation, gender empowerment, and cultural preservation. An effectively managed homestay program

is economically feasible, socially inclusive, and environmentally sustainable, thereby solidifying its position as

a fundamental element of resilient rural development.

In conclusion, as Malaysia strives to position its homestay program as a “preeminent force in community-based

tourism worldwide” by 2026, the insights from this study are timely. By reinforcing community governance,

capacity building, regulatory support, and continuous evaluation, stakeholders can ensure the homestay sector’s

growth is both robust and equitable. Implementing the recommended governance enhancements will require

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collaboration between government bodies (like MOTAC and local tourism offices), homestay associations, and

the communities themselves. The initiative will enhance its robustness and deliver an exceptional homestay

experience, benefiting homestay operators, guests, and local communities. This aligns with the principles of

sustainable tourism and rural development.

LIMITATIONS AND FUTURE RESEARCH

The limitations of this study involve several key aspects that warrant careful consideration when interpreting the

findings. First, the research focused solely on a single Malaysian state, Pahang with a relatively moderate sample

size (N = 106). Given that all respondents operated within the same socio-cultural and regulatory context, the

findings may not be broadly generalizable. The homogeneity of the setting could limit the applicability of the

framework to regions with different governance models or cultural dynamics. Future research should aim to test

this framework in other states or countries, particularly those with varied governance structures or cultural norms,

to assess whether the four constructs identified hold true universally or if new, context-specific factors emerge.

Second, the study utilized cross-sectional data based on self-reported perceptions. This methodological choice

introduces the possibility of common method bias and restricts the ability to draw causal conclusions. For

instance, it remains unclear whether effective governance directly improves performance, or if better-performing

operators simply have more resources to allocate toward governance initiatives. To address this, future research

could adopt longitudinal designs or include objective performance indicators, such as occupancy rates or

financial records, to establish more robust causal links and better evaluate the true impact of governance quality.

Third, the study relied exclusively on the perspectives of homestay operators. However, governance in the

tourism sector is inherently multi-stakeholder, involving not just operators but also community members, local

authorities, and tourists. A more comprehensive understanding of governance effectiveness could be achieved

by incorporating these additional viewpoints. For example, community leaders might offer insights into

collective decision-making, while guests could highlight aspects like communication quality or service

consistency, factors that may not be fully captured through operator feedback alone.

Finally, the study treated the four governance constructs as separate and additive, yet there may be meaningful

interactions between them. For instance, strong community governance could enhance the effectiveness of

training initiatives, or robust monitoring systems might compensate for weaker formal regulations. Future

research could employ structural equation modelling (SEM) to explore such relationships and investigate

whether these constructs contribute to an overarching latent variable such as “governance quality” that predicts

performance outcomes more effectively. Additionally, it would be valuable to examine the antecedents of strong

governance: What enables certain communities to excel across all four constructs? This line of inquiry could

explore factors like leadership characteristics, external support (e.g., government funding or NGO involvement),

or cultural attitudes toward tourism development. Identifying these drivers could inform more targeted

interventions to strengthen governance in underperforming homestay regions.

ACKNOWLEDGMENT

The author acknowledges the financial and technical support for this Dana Penyelidikan Universiti 1.0 project

provided by Universiti Sultan Zainal Abidin (UniSZA) under the grant (UniSZA/2023/DPU 1.0/40/RD051).

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