Phuket hoteliers petition against 92,000 illegal hotel rooms

[NamKangMan]

Not quite sure why some here are looking down at this? Completely agree with fair competition, but hotels which have not been registered, nor have they been legally approved by government should be penalized for the simple fact that they have not gone through the legalization process probably because they can't as they were either build wrongly, not obliging by building rules, etc. This means very often they lack a number of safety features in the building code.

Now, if i were a guests I would still be concerned about it...of course most of us won't even think about it, but when "shit hits the fan" well who they will blame, sure not that they paid less money?

It is not fair competition that some hotels or as indicated here a big part get away with doing things on the 'cheap' and lowering the standards of the hotel industry by not following rules and regulations, whereas other hotels spend a considerably amount of money doing so. Yes, it might affect rates, but come on, there must be some standards and rules which we must be able to rely on. Overall prices of hotels in Thailand are probably the cheapest in the world (except Peak season maybe).

If you read the story the 'illegality' has nothing to do with shoddy building; the example cited is that they offer 'daily rates'. Now I am not in the hotel business but I am sure that having an advertised daily rate is good for customers who don;t want to book in advance and want the option to move. Seems like the competition is too hot for the big boys with their lack of transparency in pricing.

Guys, transparency on pricing is not an issue at all, at least not in the past 10 years i would say with online agents showing daily rates, such as AGODA, EXPEDIA, Booking.com, etc.

You can find daily rates from top 5 star international hotels to 1 or 2 star guest houses.

The issue is the lack of execution of laws, of course the local government know who the culprits are, but choose to ignore for 'whatever reason'....

I agree the Phuket has still a long way to go, but it has come somehow further in the past 2 years due to the military government, just look at the taxi issue we had here since forever....solved nearly overnight...at least to a big part. So i guess we need to keep on pushing for 'right'.

"just look at the taxi issue we had here since forever....solved nearly overnight...at least to a big part." -

[simon43]

example cited is that they offer 'daily rates'.

If daily rates were illegal, my airport transit hotels/guesthouses would have to close tomorrow

The problem is that unregistered properties, such as condos are being rented out on daily rates, which is normally illegal under the terms of the condo contract/leasehold/management committee etc.

Many condo owners are using AirBnB to rent out their condos, and AirBnB now warns them to check their local rules and regulations, since such rentals may be deemed illegal.

To legally rent out on a daily basis, the property needs to be approved by and registered with the local OrBorTor office as a homestay, guesthouse, hotel or resort. They will not do that for condos, and may refuse registration for guesthouses which are in some way, not suitable for renting out, such as the lack of a reception desk (a guesthouse would normally have an on-site receptionist, at least during daytime hours - a private condo would not).

[NamKangMan]

example cited is that they offer 'daily rates'.

If daily rates were illegal, my airport transit hotels/guesthouses would have to close tomorrow

The problem is that unregistered properties, such as condos are being rented out on daily rates, which is normally illegal under the terms of the condo contract/leasehold/management committee etc.

Many condo owners are using AirBnB to rent out their condos, and AirBnB now warns them to check their local rules and regulations, since such rentals may be deemed illegal.

To legally rent out on a daily basis, the property needs to be approved by and registered with the local OrBorTor office as a homestay, guesthouse, hotel or resort. They will not do that for condos, and may refuse registration for guesthouses which are in some way, not suitable for renting out, such as the lack of a reception desk (a guesthouse would normally have an on-site receptionist, at least during daytime hours - a private condo would not).

You make some interesting points, Simon.

I have a few questions.

When does a "daily rate" become a "long term" rental? 1 month, 3 months, 6 months, 12 months? There doesn't seem to be any problem with long term rentals, despite many owners marketing / advertising / managing their properties without work permits.

As to the legality, what's really the difference between 3 different people living in a condo, on a daily rate, for 1 month each, and one person renting the same condo for 3 months? It's the same property.

We all know Time Share is a scam, but isn't the idea to have 26 "owners" all with their 2 weeks each, sharing the same apartment / condo / studio throughout the year? Isn't a condo owner doing the same, but through renting, not ownership?

Where would the owner of a condo stand if 51% of the other owners in the condo block voted for the option to put in a reception desk, register with the association, and rent out at daily rates?

You mention Air BnB and how this method of advertising and daily letting could breach regulations, and possibly Thai laws.

However, a check of the Siam Real Estate webpage shows pages, and pages, and pages of apartments and condos for daily rent. They are under the "Holiday" section. It's hardly a secret that so many owners are renting for daily rates when they are advertising with one of the biggest real estate agents on Phuket.

http://www.siamrealestate.com/search/?location_phase%5B%5D=Phuket&as_otype=rental_holiday&object=condo&as_bed_min=1&price1=0&price2=0&currency=THB&asrh_di=&asrh_do=

Edited December 30, 2015 by NamKangMan

[geriatrickid]

When I stsy in Phuket I am in a rented condo. Here's why;

It is bigger than a hotel room providing 2 1/2 rooms.\

It is modern and up to date.

I have a reasonable kitchen with fridge

There are operating sprinklers and smoke detectors.

There is reliable security and secure floor access

There is ample secure parking

The building exceeds construction quality found in most Thai hotels.

I have full daily maid service

I have a wonderful view

I pay considerably less than what a hotel wants.

I have my privacy and no idiotic inflated charges such as an internet fee or resort fee.Hotels in Patong will charge 100- 200 baht per hour for wifi. I have my coal access for this.

[NamKangMan]

When I stsy in Phuket I am in a rented condo. Here's why;

It is bigger than a hotel room providing 2 1/2 rooms.\

It is modern and up to date.

I have a reasonable kitchen with fridge

There are operating sprinklers and smoke detectors.

There is reliable security and secure floor access

There is ample secure parking

The building exceeds construction quality found in most Thai hotels.

I have full daily maid service

I have a wonderful view

I pay considerably less than what a hotel wants.

I have my privacy and no idiotic inflated charges such as an internet fee or resort fee.Hotels in Patong will charge 100- 200 baht per hour for wifi. I have my coal access for this.

This is why the Hotel Association is upset.

Private farang owners of condo's, and I am sure some Thai owners as well, are offering a better product at a cheaper price, and the larger Thai run hotels and resorts don't like it because they are losing money, and really losing money now.

I don't think the association are concerned so much about the little 500 baht per night guest houses, but are concerned with the 2000, 3000, 4000 baht etc per night, fully furnished condo's with pool etc etc, and the money going mainly to farang owners.

They don't want to compete, and they can't compete, so in Thai style, they will try to run the opposition out of town, so to speak.

[simon43]

When does a "daily rate" become a "long term" rental?

TBH, I don't really know. It might be down to the rules of each condo management committee - I'm not sure that there is a government regulation about this.

On a personal note, I don't like the big OTAs (booking.com, agoda etc) listing condos. The legitimate hotels and guesthouses have gone through the effort and expense to register themselves legal, and have to pay an OrBorTor tax twice a year on their room numbers/estimated occupancy and facilities (restaurant, swimming pool etc).

It may also be unclear to a guest that they are booking a condo, with no room service facility etc.

But unlike the THA, I see no point in moaning about this - The big OTAs are happy to collect booking commissions on unregistered properties and no amount of moaning will change that.

[madmitch]

I had a group of Russians staying recently, all spoke very good English and were obviously intelligent.

Their business was renting homes on a long-term basis then sub-letting them on AirBnB on a daily basis. They spoke openly to me about this and I did speak about the legality of such a practice and also whether the terms and conditions of their contract would allow this. They didn't seem at all concerned about this and it was apparently a business model they already had up and running in Russia and a couple of other countries.

This practice is certainly dubious in several ways but if they get away with it, it's a good money spinner. I'm considering AirBnB myself for renting my condo in Bangkok when the long-term tenant moves out but I will definitely check that it's allowed under the terms of my condo terms and conditions.

I hope this initiative by the THA doesn't refer to small, legitimate guesthouses but who knows.

[manarak]

70 per cent of Phuket hotel rooms illegal, say experts

Phuket Gazette

Phuket Vice Governor Prajiad Aksornthammakul addresses members of the Thai Hotels Association Southern Chapter. Photo: Kritsada Mueanhawong

PHUKET: -- More than 70 per cent of hotel and resort rooms in Phuket are illegal, a problem that is severely harming the industry, said experts in a complaint filed to the Phuket Governor this morning.

“According to our records, there are about 92,000 hotel rooms on the island. Of those, about 70 per cent are illegal,” said Kritsada Tansakul, director of the Thai Hotels Association Southern Chapter. “There are at least 200 hotel owners operating their businesses without the proper hotel licence.”

Mr Kritsada led a group of affected hoteliers and business owners to Phuket Provincial Hall to file a complaint to Phuket Governor Chamroen Tipayapongtada.

The letter was accepted on the Governor’s behalf by Phuket Vice Governor Prajiad Aksornthammakul.

Full story: http://www.phuketgazette.net/phuket-news/70-per-cent-Phuket-hotel-rooms-illegal/62749?desktopversion

-- Phuket Gazette 2015-12-29

and of course applications for hotel licenses are promptly processed, easily issued when the paperwork is in order and don't involve any bribes of any kind, right ???

Edited December 30, 2015 by manarak

[NamKangMan]

When does a "daily rate" become a "long term" rental?

TBH, I don't really know. It might be down to the rules of each condo management committee - I'm not sure that there is a government regulation about this.

On a personal note, I don't like the big OTAs (booking.com, agoda etc) listing condos. The legitimate hotels and guesthouses have gone through the effort and expense to register themselves legal, and have to pay an OrBorTor tax twice a year on their room numbers/estimated occupancy and facilities (restaurant, swimming pool etc).

It may also be unclear to a guest that they are booking a condo, with no room service facility etc.

But unlike the THA, I see no point in moaning about this - The big OTAs are happy to collect booking commissions on unregistered properties and no amount of moaning will change that.

"TBH, I don't really know." - and that's the way the Thai authorities like it, nobody knowing, so they can make the rules up as they go along.

You mention the OTA's. (online travel agencies) but it's not just the OTA's and Air BnB, it's bigger than that. I posted a link, one of many on the net, of a Real Estate Agent here offering condo's and apartments on daily rentals. Holiday rental has become an industry on Phuket now.

So, when does a "daily rate" become a "long term rental?" They need to clarify this first, before they can enforce anything, because real estate agents are simply doing their job for their clients, that is, advertising real estate for sale and rent.

We should see this for what it is. The large Thai run hotels and resorts losing money to private owners / investors / property developers and they want to eliminate the competition. The problem with that is, you then lose foreign investment in property here.

They created this mess, and it will be very difficult to clean up.

[NamKangMan]

I had a group of Russians staying recently, all spoke very good English and were obviously intelligent.

Their business was renting homes on a long-term basis then sub-letting them on AirBnB on a daily basis. They spoke openly to me about this and I did speak about the legality of such a practice and also whether the terms and conditions of their contract would allow this. They didn't seem at all concerned about this and it was apparently a business model they already had up and running in Russia and a couple of other countries.

This practice is certainly dubious in several ways but if they get away with it, it's a good money spinner. I'm considering AirBnB myself for renting my condo in Bangkok when the long-term tenant moves out but I will definitely check that it's allowed under the terms of my condo terms and conditions.

I hope this initiative by the THA doesn't refer to small, legitimate guesthouses but who knows.

There's also a lot of foreign owners / renters doing the same with condo's and apartments here. I know one guy who has two properties for rent, daily and / or long term. He owns one, and has a long term lease on the other.

The owner of the rental has moved on from Phuket. He tried to sell, but couldn't. It's still for sale now. He doesn't care about the property, so is happy to have anything he can coming in from it a month.

This guy advertises, markets, inspects and manages the properties - no work permit, no tax, no fees etc. It's a grey area.

The two properties keep him fairly busy. Basically, a part time job.

He told me once he even rented out his own condo for 50,000 baht for the month, while he went and stayed in a 9000 baht a month guest house.

So, registering the property with authorities aside, what about Thai labor laws? Is it a job? Do you need a work permit? If you are deriving an income, do you need to set up a Thai Company?

[stevenl]

I had a group of Russians staying recently, all spoke very good English and were obviously intelligent.

Their business was renting homes on a long-term basis then sub-letting them on AirBnB on a daily basis. They spoke openly to me about this and I did speak about the legality of such a practice and also whether the terms and conditions of their contract would allow this. They didn't seem at all concerned about this and it was apparently a business model they already had up and running in Russia and a couple of other countries.

This practice is certainly dubious in several ways but if they get away with it, it's a good money spinner. I'm considering AirBnB myself for renting my condo in Bangkok when the long-term tenant moves out but I will definitely check that it's allowed under the terms of my condo terms and conditions.

I hope this initiative by the THA doesn't refer to small, legitimate guesthouses but who knows.

There's also a lot of foreign owners / renters doing the same with condo's and apartments here. I know one guy who has two properties for rent, daily and / or long term. He owns one, and has a long term lease on the other.

The owner of the rental has moved on from Phuket. He tried to sell, but couldn't. It's still for sale now. He doesn't care about the property, so is happy to have anything he can coming in from it a month.

This guy advertises, markets, inspects and manages the properties - no work permit, no tax, no fees etc. It's a grey area.

The two properties keep him fairly busy. Basically, a part time job.

He told me once he even rented out his own condo for 50,000 baht for the month, while he went and stayed in a 9000 baht a month guest house.

So, registering the property with authorities aside, what about Thai labor laws? Is it a job? Do you need a work permit? If you are deriving an income, do you need to set up a Thai Company?

No, not a grey area, for several reasons a black area.

[simon43]

Sites like AirBnB are also very popular for condo owners to market their property for short lets, because the commission rate is very low. The big OTAs charge between 15 - 25% per guest booking. (I've managed to get all my OTA agreements down to 15%, maybe because they are feeling the heat from the popularity of AirBnB).

I don't really promote my little hotels on AirBnB because that website is really intended to market individual condos or rooms - their booking synchronisation application doesn't work very well with the Channel Manager apps that multi-room properties use to manage bookings across all OTAs. You can end up with overbookings (you sold more rooms than you have!), which is not a good situation to be in - for both guest and hotel.

[bearpolar]

You'd probably do good on airbnb, most airbnb in phuket are scary rooms inside the house of thais who only shop at tesco

[simon43]

You'd probably do good on airbnb, most airbnb in phuket are scary rooms inside the house of thais who only shop at tesco

Lol really? My ex #2's hotel should be listed on AirBnb then...