BANGKOK, 7 December 2012: Thailand’s Ministry of Interior says it will tighten regulations to upgrade standards in the hotel industry and crack down on illegal operators.
The ministry said the scheme will be based on ministerial regulations that will be approved early January after years of discussion with hoteliers.
Once the new rules take effect, the ministry will allow three months for illegal hotel operators to comply by meeting conditions in the law and improving their standards to qualify for licences.
Those failing to meet the deadline will face fines of Bt500,000 or prison, or both.
“The aim is to eliminate illegal hotel operators and create fair competition in the market,” the ministry said.
Initially, the new ministerial regulation will include two main articles. One will state that small hotels with up to 80 rooms can be registered as legal hotels even if they do not fully comply with the building code for hotels.
The other article eases the rule on parking space at certain kinds of hotels.
The ministry estimates that of the more than 12,000 hotels nationwide, 7,500 are illegal. They are mainly guest houses, serviced apartments, and house rentals in major tourist destinations.
Surapong Techaruvichit
But there are mainstream hotels, too, that failed to gain permission to operate and are the main target of the legislation, especially those that registered first as apartment blocks rather than hotels.
Responding to the ministry scheme, Thai Hotels Association president, Surapong Techaruvichit, said the regulations would help improve standards.
“Hopefully the regulation will reduce the supply of rooms nationwide and drive up room rates.”
He was suggesting that officials will apply the law and close down hotels that fail to comply with the legislation. If they do it could reduce the number of rooms in the Bangkok market and that in turn could help legal hotels to raise rates.
But there is a big if in the argument, the main one being whether officials are prepared to force influential property owners to comply or close a hotel if they refuse.
It is hardly unlikely that the ministry will be prepared to make enemies of wealthy property owners.
The THA president claims lawful hotels have to live with much higher operating costs.
“Those offering premium service have to employ a large number of people, while legal hotels in all categories pay room taxes annually and licence fees every five years.”
The crackdown is part of a national tourism plan that aims to improve tourism by increasing revenue to Bt2 trillion by 2015.