Hotel / Guest house whats the difference

[mickj88]

10 years ago when my wife and I married it was decided we would live in the UK for 10 years and then look at moving back to LOS .

Obvious downside of moving to LOS is the work issues for me, so we have been looking at the possibility of purchasing a guest house or small hotel or a small bungalow resort. Something in the order of 15 to 20 rooms with bar and small restaurant,.

We will be looking for a going concern and will not commit till we have had a good look at the previous financials ,preferably with a Thai company included but as the Mrs is Thai should have no problems in setting one up on our own if need be.

I was wondering if there are license differences between guest houses and hotels and resorts .and any advantages / disadvantages between them.

I am really trying to get as much info as I can prior to coming out and looking at what's on the market.

Please only reply if you have something constructive to add as I know there are a number of TV posters who like to troll

.I would like any info / input preferably from people within the industry rather than the nay sayers usual don't come cos you will lose.

Having been over to Thailand some 18 times in the last 10 years Im not what you would call green and know the pitfalls.

I left a well paid secure job 20 years ago to go on my own and started with nothing and its paid my way since so I am not scared of hard word and a gamble although I do not have a lot of experience in this industry .

Thanks in advance ,

Mick

[NiwPix]

Haha, after two days no reply...nobody has anything nice to say i guess .

I can't help you with the differences between accommodations / advantages and disadvantages, however i do have some input.

I assume by now you fully trust your wife. If that is the case, you do not need to set up a "company". You can run the business as a sole proprietorship and be employed by the owner ( your wife )...assuming you meet the work permit criteria and age limit.

This business model will save you quite some paperwork, headaches and taxes.

[CharlieH]

Moving this down to the Real Estate forum and leave a link here for others .

[Gutenberg]

Using a sole proprietorship instead of a Ltd. for a resort business is a really bad advice.

[simon43]

OK, some input from the situation in Phuket.

There is a legal difference between a guesthouse and a hotel. If there are 12 letting rooms or less, then here in Phuket, it is defined as a guesthouse, and the OrBorTor tax that one pays is fairly low.

A guesthouse could trade as 'xxx Hotel', but that doesn't make it a 'hotel'

A hotel has more than 12 letting rooms, and is subject to pay the 1% hotel tax, as well as the other relevant taxes. I also understand that the tax/accounting paperwork is more complex for a business that falls into the hotel category.

I have always kept my guesthouses below 13 letting rooms, since this has minimised the local taxes and 'interest' from other parties in my businesses.

A small business can have a higher profit than a large business. My first guesthouse (which I sold some years ago) had high running costs (land lease cost etc), because it was by the main road at Phuket Airport. My current guesthouse attracts a land lease cost that is only 10% of the first guesthouse.

Although the current owner of that first guesthouse has a high income, my knowledge of his running costs tells me that I'm making more profit than him.

So, big is not always better, (as I keep telling the ladies...)

[mickj88]

Thanks for the info guys . I was wondering about the small vs bigger amount of rooms , obviously the more rooms the more work required to keep them up to date + less rooms empty in low season sitting there earning zero baht. thanks for the heads up on the tax that's really useful to know. Not looking on a serious note till after songkran next year but want as much info before as possible , forearmed is forewarned and all that .

[NiwPix]

Using a sole proprietorship instead of a Ltd. for a resort business is a really bad advice.

Now, would you be so Kind and explain why it is really bad advice?

[Gutenberg]

Using a sole proprietorship instead of a Ltd. for a resort business is a really bad advice.

Now, would you be so Kind and explain why it is really bad advice?

Some cues: Liability, progressive taxation, diluting earnings, licenses, insurances, professionalism, etc.

Sole proprietorships are mostly used to run a licensed business without paying taxes which is illegal, e.g. all the small "stores" in Isaan might be licensed but they surely do not pay tax.

In a hard case that the neighbors are jealous of the resort owner or that official people drop by to "check" something, it is better to have a legal entity represent your resort than just "mia falang". Just some kind suggestions.

Regarding professionalism, just ask yourself if you would run a profit business in EU/US without an Ltd/Llc.