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ResourcesThailand Real Estate & Property LawJurisprudenceReworking of Hotel and Guesthouse Licensing in Thailand

Reworking of Hotel and Guesthouse Licensing in Thailand

Transcript of the above video:

As the title of this video suggests, we are discussing hotels and guest houses here in the Kingdom and let's get into the difference between the two real quick before I go any further.

In the past, Thailand has actually had a rather cumbersome regulatory structure pertaining to hotels and for this reason there are many places that in the past called themselves essentially “guesthouses”. They kind of occupied a little bit of something of a nebulous sphere with respect to the accommodation industry here in Thailand and prior to the more strict enforcement of things like TM30 for example, the requirement of foreigners to register whatever address they are at here in the Kingdom as well as landlords, it was actually a pretty laid-back regulatory atmosphere with respect to so-called guest houses. That being said, as we have seen with Immigration enforcement and now more and more I think that Immigration enforcement may have a Revenue Department angle which I have gotten into in another video on this channel. That being said, the hotel licensing structure seems to be in a state of transition if you will. 

In a recent article from the Bangkok Post, bangkokpost.com, the article is titled Small Hotels Set to Legalize Ventures. Quoting directly: "Some 5,000 non-registered small hotels are expected to legalize their business after a recent order issued by the National Council for Peace and Order. The order enforced under Section 44 powers is aimed to bring illegal hotels and accommodation service providers under better state control and improving the safety for guests. These small hotels with fewer than 50 rooms had planned to register with local authorities but their attempts were obstructed by a 2016 Ministerial Regulation of the Interior Ministry." Quoting further, "The regulation required operators that transformed their buildings into a hotel to comply with the Town and City Planning Act as well as the Building Control Act before seeking an operating license. While waiting for the license they could not operate without risking a fine or punishment. The Section 44 order is considered a relief for them as they can continue doing business while waiting for a license under the Hotel Act." Quoting further, "Hotels must comply with all required legislation such as laws related to Town Planning and Building Control by 2021."

I urge those who are watching this video to check out that article again. It is titled: Small Hotels Set to Legalize Ventures. It is in the bangkokpost.com. There is a great deal more content there. I want to get to one specific point in this. They have created a section 44 order which is basically sort of a “bolt out of the blue” that allows these small hotels a certain amount of leeway. They are exempted from the need to obtain a license or else be subject to fines while they are getting in line with other aspects of the regulatory scheme here pertaining to hotels. It is kind of basically cutting the Gordian knot if you will. They are getting rid of what essentially is a Catch-22 situation wherein these small operations are saying "Well we do it but if we do it by starting to do it we subject ourselves to the risk of fine and the Government has turned around and said "NO, we cut that out. Now there is no reason for you not to go ahead and attempt to get into proper compliance with the relevant law and failure to do so, presumably by 2021, could lead to some rather bad consequences. 

So I think what should be taken away from this video is Thailand is looking to cut some red tape. They are also looking to normalize regulations between larger operations and smaller operations and moving forward I think it is fairly safe to say that we are going to see a lot more true hotels per the legal definition here in the Kingdom; we are going to see a lot more of those large and small.