Thai Govt To Crack Down On Unlicensed Hotels

[webfact]

Govt to crack down on unlicensed hotels

BAMRUNG AMNATCHAROENRIT

THE NATION

BANGKOK: -- The Interior Ministry will impose tighter regulations early in the new year aimed at upgrading the hospitality industry and doing away with unlicensed operators.

Once the new rules take effect, the ministry will allow three months for illegal hotel operators to comply by improving their standards so they qualify for licences. Those failing to meet the deadline will face fines of Bt500,000 or prison, or both.

The aim is to eliminate unre-gulated hotel operators and |create fair competition in the market.

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 Techa-ruvichit, president of the Thai Hotels Association, said the regulations would help improve the standards of the hospitality industry. More important, they will reduce the supply of rooms nationwide and drive up room rates. Illegal hotels have hurt the licensed operators by luring a large number of tourists with low prices.

He noted that lawful hotels bear higher operating costs than their illegal peers. 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.

Surapong said the licensing crackdown was part of a national tourism plan discussed recently aimed at improving the industry with a view to taking in Bt2 trillion in tourism revenue in 2015.

Previously, Surapong said room rates in Bangkok were quite low compared with other major cities in Asia. Early this year, the average rate was US$97 (Bt2,970), representing only 40 per cent of the real cost. Meanwhile, the average rate in Singapore was $232, Hong Kong $242, Tokyo $164, and Seoul $149.

-- The Nation 2012-12-06

[Moruya]

Wow! Another crackdown!

[Notstupid30]

Wow! Another crackdown!

More like a Hub of crackdowns!

[WhizBang]

Illegal hotels have hurt the licensed operators by luring a large number of tourists with low prices.

Perhaps they might want to give some thought to this statement.

They want to drive up prices, yet, it seems, that many tourists flock to the cheaper hotels. So if they drive prices up, perhaps many tourists will go elsewhere, rather than pay more. Prices in Thailand are already much higher than they uised to be. Thailand is no longer the bargain it once was.

As for Singapore, I stay at a very nice hotel at $99 a night (near Clarke Quay). Granted, it's a small room, but it is clean and has a good bed and shower.

[mccw]

Idiot government.

[WilliaminBKK]

My question is what makes them illegal ? not paying to be a part of an association ?

[yoshiwara]

This crackdown might or might not be placed on the same pedestal as the jet-ski operators crackdown.

[smutcakes]

I am not sure why people are against this. Unlicensed hotels are by definition not licensed and as such would not pay any taxes, not be checked for health and safety compliance etc. If they want to be operators they should apply for the proper permits and pay the appropriate taxes and other licensing dues. It is very strange on TV where on the one hand people consistently bemoan the lack of law and order, and here is an article trying to curve some of this issue in the hospitality sector and it is met by skepticism and ridicule.

Hopefully if this can done properly, we will minimize any fire and safety issues or other health related issues in smaller unregulated hotels.

[Songhua]

This is not about safety or standards. It's about revenue ending up in the 'right' places. The dollar signs are there but the big picture isn't.

Backpackers and budget travellers will NEVER pay $240 for a room and will be just as happy to stay in Cambodia or Burma. Where they stay is where they spend.

Cock gun, point downwards, shoot own foot.

[Ricardo]

They'll increase competition, by clamping-down on all those hotels & accomodation-providers, whose business-model doesn't include joining a Hotel Association run by the 'right' people ?

Didn't work last time, won't this, you can't dictate to the market like that !

The Thai Hotel Association needs to offer benefits which make it clearly worth joining, and even then, some hotels/guesthouses still won't want to join, 'up to you' as we say here !

And of course the larger upmarket hotels, which do employ more staff & offer better facilities at a higher-price, are the sort of people who would join a trade-association, and mostly already did. It's an effect, not a cause !

Edited December 6, 2012 by Ricardo

[asiawatcher]

There is a huge over supply of hotels already in the higher brackets. The budget hotels - according to the article - make up the majority. To keep them as budget they must a) get referrals and have a sufficient standard to keep travellers happy. It seems to me creating more rules (within reason) other than safety etc, is just another way to skim more money to the coffers or the BiB or inspectors to gain more tea money to have them go away. The intention is good for media 'trumpet blowing' but hardly practical in execution and in achieving the 'stated' end result.

[Hockeybik]

Idiot government.

Which government isn't?

[jaltsc]

Please correct me if am wrong. Weren't some of the hotels where "mysterious" deaths occurred licensed? In particular, a few years ago a child was electrocuted while playing video games at a licensed hotel due to the electric outlets not being grounded. If so, how does licensing benefit the hotel guests? I see this ploy as just another way to raise prices for rooms and force non licensed hotels and guest houses to join and pay fees to the Thai Hotel Association.

[theslime]

Hope the License Fee is like that for selling Cig,s, It surely costs more to collect than they will make.

[MaxLee]

Uuuuuuuuuuuuh, I guess the UNDERGROUND HOTEL GROUP OF THAILAND IS SCARED LIKE HELL NOW

… while somewhere in the far reaches on Krabi, Phuket and other islands business is going on as usual. …

Edited December 6, 2012 by MaxLee

[jcw]

Previously, Surapong said room rates in Bangkok were quite low compared with other major cities in Asia. Early this year, the average rate was US$97 (Bt2,970), representing only 40 per cent of the real cost. Meanwhile, the average rate in Singapore was $232, Hong Kong $242, Tokyo $164, and Seoul $149.

How many staff in these countries get $10 a day wage. This guy is a greedy idiot.

How about he compares the rampant corruption in these countries as well. He should be comparing to Cambodia.

Edited December 6, 2012 by jcw

[BrianCR]

I am not sure why people are against this. Unlicensed hotels are by definition not licensed and as such would not pay any taxes, not be checked for health and safety compliance etc. If they want to be operators they should apply for the proper permits and pay the appropriate taxes and other licensing dues. It is very strange on TV where on the one hand people consistently bemoan the lack of law and order, and here is an article trying to curve some of this issue in the hospitality sector and it is met by skepticism and ridicule.

Hopefully if this can done properly, we will minimize any fire and safety issues or other health related issues in smaller unregulated hotels.

Good post, especially the TV poster bit

[noitom]

There is a huge over supply of hotels already in the higher brackets. The budget hotels - according to the article - make up the majority. To keep them as budget they must a) get referrals and have a sufficient standard to keep travellers happy. It seems to me creating more rules (within reason) other than safety etc, is just another way to skim more money to the coffers or the BiB or inspectors to gain more tea money to have them go away. The intention is good for media 'trumpet blowing' but hardly practical in execution and in achieving the 'stated' end result.

Or worse, driving the small hotels out of business or using inferior chemicals, to clean rooms, bad food on the cheap, lack of service, cleaning, and really bad safety in general.

[lemoncake]

I am not sure why people are against this. Unlicensed hotels are by definition not licensed and as such would not pay any taxes, not be checked for health and safety compliance etc. If they want to be operators they should apply for the proper permits and pay the appropriate taxes and other licensing dues. It is very strange on TV where on the one hand people consistently bemoan the lack of law and order, and here is an article trying to curve some of this issue in the hospitality sector and it is met by skepticism and ridicule.

Hopefully if this can done properly, we will minimize any fire and safety issues or other health related issues in smaller unregulated hotels.

Paying tax and having a license is not the same thing and not related at all.

Registered company pays tax, hotel license cost only 3000 baht for 1 year.

So I am really unsure what they want to crack down ? The ones without the 3000 baht license or the ones not registered company's

[lemoncake]

There is a huge over supply of hotels already in the higher brackets. The budget hotels - according to the article - make up the majority. To keep them as budget they must a) get referrals and have a sufficient standard to keep travellers happy. It seems to me creating more rules (within reason) other than safety etc, is just another way to skim more money to the coffers or the BiB or inspectors to gain more tea money to have them go away. The intention is good for media 'trumpet blowing' but hardly practical in execution and in achieving the 'stated' end result.

Or worse, driving the small hotels out of business or using inferior chemicals, to clean rooms, bad food on the cheap, lack of service, cleaning, and really bad safety in general.

Inferior chemicals??? What is that? Instead of using mr muscle floor cleaner, they use tesco brand??

Cheap food?? Anyone forcing you to eat???

Lack of service??? Do u understand the meaning of budget? Or expect the 5 star service for the price of 1

Good to see some straight thinking and reasonable people on tv

[arthurboy]

Given the article states that there 12,000 hotels nationwide, 7,500 of which are illegal, I wonder how many government inspection teams there are, where they are and what it is they actually do?

What are the standards exactly, and how are they enforced?

And if a government team happens to be inspecting a legal hotel in - say Pattaya - do they notice the illegal places in the same street or area, and kindly offer a framed certificate of compliance in exchange for a brown envelope?

Next crackdown please. This one has already passed its sell by date.

[asiawatcher]

There is a huge over supply of hotels already in the higher brackets. The budget hotels - according to the article - make up the majority. To keep them as budget they must a) get referrals and have a sufficient standard to keep travellers happy. It seems to me creating more rules (within reason) other than safety etc, is just another way to skim more money to the coffers or the BiB or inspectors to gain more tea money to have them go away. The intention is good for media 'trumpet blowing' but hardly practical in execution and in achieving the 'stated' end result.

Or worse, driving the small hotels out of business or using inferior chemicals, to clean rooms, bad food on the cheap, lack of service, cleaning, and really bad safety in general.

People wanting to pay around THB500 per night for a hotel usually are not connoisseurs, particularly backpackers or 'short-timers'. They don't eat in the hotels and by and large prefer street food, or fast outlets. I agree totally on the point of (cheap) chemicals in keeping with 'value for money', viz the cheaper hotels are forced to use inferior products to remain competitive (read profitable) and of course my pet hate, safety. Having worked with electricity and seeing results of electrocution, I find it amazing earth leakage circuit breakers (ELCB's), earth straps and ground wire is not used in Thailand within buildings and does not form part of the building code. But I also know there are actually quite a few budget places with good service, good food and these mostly are the family run businesses.

[DocN]

I am not sure why people are against this. Unlicensed hotels are by definition not licensed and as such would not pay any taxes, not be checked for health and safety compliance etc. If they want to be operators they should apply for the proper permits and pay the appropriate taxes and other licensing dues. It is very strange on TV where on the one hand people consistently bemoan the lack of law and order, and here is an article trying to curve some of this issue in the hospitality sector and it is met by skepticism and ridicule.

Hopefully if this can done properly, we will minimize any fire and safety issues or other health related issues in smaller unregulated hotels.

...so ...you mean...just like the licensed ones?

[Thai at Heart]

What has being part of a trade association to do with being a licensed hotel.

What has the hotels association got to with this? Being a member of the association has nothing to do with licensing the building for say safety or taxes.

[Katipo]

If responsible Thai officials weren't so corrupt and did their jobs properly in the first place, there wouldn't have to be all these largely ineffective 'crackdowns'.

[Ricardo]

How do they know how many unlicensed hotels there are, if they're not in the trade-association ?

When they say the new regulations "will reduce the supply of rooms nationwide and drive up room rates" they give the game away. It's all about restricting trade, in favour of the up-market operators, who just happen to be members of the club. To heck with the customers' wishes !

Yay for Thai marketing-methods !

[lemoncake]

How do they know how many unlicensed hotels there are, if they're not in the trade-association ?

When they say the new regulations "will reduce the supply of rooms nationwide and drive up room rates" they give the game away. It's all about restricting trade, in favour of the up-market operators, who just happen to be members of the club. To heck with the customers' wishes !

Yay for Thai marketing-methods !

Exactly!

He quotes there are 12500 hotels, how does he know that? when they not licensed and how does he know that about 7500 un-licensed?

Last year in Pattaya, i had a visit from the revenue department inspectors, who were supposedly checking if the hotel is under company, is that what they cracking down? i mean really it makes no sense and just opens the door for some "tea money" to be collected for whatever at any time by whomever

Edited December 6, 2012 by lemoncake

[aguy30]

Lemoncake: Last year in Pattaya, i had a visit from the revenue department inspectors, who were supposedly checking if the hotel is under company, is that what they cracking down? i mean really it makes no sense and just opens the door for some "tea money" to be collected for whatever at any time by whomever.

Thanks so much for your input. Not will you please explain whatever it is that you were trying to make as your point?

[lemoncake]

Lemoncake: Last year in Pattaya, i had a visit from the revenue department inspectors, who were supposedly checking if the hotel is under company, is that what they cracking down? i mean really it makes no sense and just opens the door for some "tea money" to be collected for whatever at any time by whomever.

Thanks so much for your input. Not will you please explain whatever it is that you were trying to make as your point?

Last year they checked if hotel was operating under a company ie had registered company ie paying tax.

The question of license and not paying tax are totally unrelated.

So the point was any inspector can come and ask for tea money because the whole crackdown makes no sense.

As stated license cost only 3000 baht/year and does not require anything but photo and payment, so what licenses is he referring to and how does License relate to tax?!

Hope NOW you understand the point

[caykay]

Thank god they are saving us from the living hell of low prices