Thai industry officials think that lighter regulations will cause fewer hoteliers to cheat and keep their properties off the tax rolls. They've also got their fingers crossed that this move will help bring up nightly rates.
The honeymoon period for non-licensed hotels is going to end as the Interior Ministry will issue a new rule to regulate them this October, says the Thai Hotels Association (THA).
The new ministerial regulation will have two main articles. One article will state small hotels with no more than 80 rooms can be registered as legal hotels even if they do not fully comply with hotels’ strict building requirements.
Another article will instruct hotels with only guest rooms and hotels with rooms and restaurants they will not be required to have parking space.
Sampan Panpat, an honorary adviser to the THA, said hoteliers welcomed the upcoming regulation as it would help solve the non-licensed hotel problem.
Currently many hoteliers wish to register their small hotels but they cannot as their hotels are located in old buildings unable to be modified to meet the Building Control Act requirements.
The new regulation will also prohibit apartments from providing daily accommodation for guests. If apartments want to provide a similar service to hotels, they must seek a hotel license.
The THA strongly believes the new regulation will convince some 4,000 illegal hotels nationwide to enter the system.
“Strict enforcement should help reduce bribery, promote fair competition and allow the government to collect more in taxes. Non-licensed hotels that don’t want to register will face legal actions,” said Mr Sampan.
Illegal hoteliers are subject to up a one-year jail sentence and a fine of up to 20,000 baht. They can also be fined 10,000 baht daily if they continue to run their business illegally.
The THA will seek a budget of 1-2 million baht from the Tourism and Sports Ministry to study hotel demand and supply in Bangkok, Phuket, Chiang Mai, Hun Hin, Cha-am, and Pattaya. It hopes the study will help establish hotel zoning to relieve pricing competition.
Last year, the average hotel room rate in Thailand was US$97 per night compared to Singapore at $232, Seoul $149, Tokyo $164 and Hong Kong $242. The THA is not proud of this average, as it does not reflect real values.