Thai law prohibits foreign ownership of tourism businesses, but illegally operating competitors have thrived for years without government intervention.
Local tourism operators in Phuket are unhappy with competition posed by Russian rivals.
They have asked the Department of Special Investigation (DSI) to investigate if the foreign competitors are operating illegally through Thai proxies.
Pol Lt Col Nimit Promma, an officer of the DSI’s Bureau of Special Crime 3, said the DSI was looking into the complaint but has yet to establish if any law has been violated.
Pol Lt Col Nimit said a large number of Russian nationals was working on the resort island.
Investigators were checking their passports and work permits and were tracking financial transactions of certain local companies to find if they were operating illegally as a front for Russian investors.
Thai law restricts foreign ownership of, and participation in, businesses providing tourism services in the country to prevent them from competing against local operators.
Pol Lt Col Nimit said local business operators have long complained of illegal competition posed by South Korean, Chinese and Russian tourism operators.
The Thai business operators are more concerned with competition from Russian operators who they believed have moved from Pattaya and were now operating an extensive range of tourism services that included hotels, restaurants and souvenir shops.
However, DSI officers had not yet found any wrongdoing, Pol Lt Col Nimit said.
A Thai restaurant owner in tambon Karon of Muang district said Russian tour operators had moved from Pattaya to Phuket and their businesses covered all areas ranging from arranging flights with Russian airlines to tourist accommodation.
The source said each client is charged 15,000 baht per flight, while Russian tour operators wholly rent nearly 20 local hotels for six months during the high season for their clients.
They also set up restaurants, souvenir shops and taxi services and even employ Russian cab drivers who block Thai taxi drivers from reaching tourists at Phuket airport, the source said.
Competition from foreign tourism operators has existed in Phuket for years, but the police and state agencies such as the Tourism and Sports Ministry seemed to turn a blind eye to their operations, the businessman claimed.
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Photo Credit: Visitors travel through the floating market on a tour in Thailand. Laurence King / Flickr