THURSDAY, March 28, 2024
nationthailand

Law to legitimise illegal hoteliers

Law to legitimise illegal hoteliers

An attempt to make unlicensed hoteliers nationwide legal is expected to be effective this year under a new regulation of the Ministry of Interior, which is expected to solve the problem of price undercutting that is hurting the hospitality industry overal

According to their draft, the Hotel Building Control regulations will allow currently illegal hoteliers – about 6,000 nationwide, most of them small or medium-sized enterprises – to register legally by loosening such criteria as the need to have a car park as previously required. Today, most of them operate small hotels of 80 rooms, and have to follow the Building Control Act, which requires strict construction. The regulation is expected to be passed by the end of the year.
Thai Hotels Association president Surapong Techaruvichit said the new regulation would help improve the industry’s standards because some hoteliers intended to run their business legally. It will also lead the industry together, in the same direction.
The THA is expected to persuade 80 per cent of the illegal operators to return to the industry system. Unlicensed operators pay a third of the tax of lawful operators. This allows them cut prices to lure foreign travellers to stay in their hotels because they have lower operating costs. Many of them are serviced apartments. Currently, room prices in Bangkok are lower than in other key cities in Asia. On average, the price of a room in Bangkok was quoted as US$97 per night (Bt2,800) early this year. But this price represents only 40 per cent of the real price. By comparison, Singapore was $232, Hong Kong $242, Tokyo $164, and Seoul $149.Surapong said curbing the illegal hotel operators would help create price standard in the industry.

 

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