Do you know that Thailand currently boasts over 100,000 available rooms, but more than half of these are to be found in properties which are operating without a hotel license? Is this one of the reasons why the supply of rooms continues to outstrip demand in the country, making rates a regional bargain? One group which might think so is the Thai Hotel Association (THA), and Hotelintel.co recently had the opportunity to discuss these matters with committee member, Tossapol Satitwittayakul.
It seems there are two common scenarios which lead to the presence of unlicensed hotels. The first concerns the difficulties some hotels face in actually qualifying for a license, as Tossapol pointed out:
“There are some tight rules and regulations that hotels need to follow in order to receive a license; some hotels didn’t meet the criteria because maybe they didn’t have a parking space, but we think it should be considered case by case,” he explained. For the hotels, however, the problem doesn’t seem quite so serious. “Since it’s an unenforced law, people don’t feel the need to get one,” Tossapol adds.
This lack of enforcement is probably the main factor behind the second reason for hotels operating without a license. At present, hotel construction work can proceed anywhere, with no zoning rules applied, and this has resulted in a number of small investors putting their money into the construction of small apartment buildings and then renting them out as a hotel. Flying below the radar may enable these operators to get away without meeting certain minimum safety standards, and often without declaring their profits openly for tax. This is bad news for legitimate operators who are obliged to compete while playing by the rules. It is no surprise then to hear the THA urging the authorities to enforce the rules and also to find ways to interpret those rules in such a way that those small operators who are actively trying to obtain the correct documentation are more easily able to do so.
The advantages of both THA membership and becoming a license holder are apparent from the perspectives of both customers and operators. “In cases like this it comes down to safety concerns for tourists. You can pay to stay in someone’s house but you don’t know whether it will be safe for you. Can you trust this person? Is the building safe? What if something happened, who would be responsible? ” added Tossapol.
THA also serves as a voice for hotel owners as well as a forum where they can share knowledge and information. This can help the industry as a whole, especially in times of crisis when a single representative voice can present a clear and coherent message. “We helped share information with tour operators when the coup happened, and our accurate and trusted information encouraged people to travel,” said Tossapol.
THA has another important role within the local industry in setting the standards for star ratings. To receive certification, member hotels must arrange to be visited by the THA audit team who evaluate the property according to the specified criteria. Star rating certificates are then awarded to those who successfully pass.
While some customers remain eager to find bargains and are prepared to take a chance on accommodation which might not be fully above board, it is in the interests of the majority of hoteliers to comply with the licensing regulations and compete on a level playing field. Law enforcement must therefore be a priority in bringing all would-be hoteliers into the fold for the benefit of the industry as a whole.