Unregistered hotels and hostels ordered to get their paperwork in order or face shutdown

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At least 5,000 of the country’s estimated 23,000 unregistered small hotels are expected to get their paperwork in order. The rush to action follows the announcement by the current government to register and comply with the Hotel Act, or be closed down.

Most of Thailand’s busy tourist spots are rampant with small and illegal lodgings for tourists. Whilst the growth of registered hotels has rushed to keep pace with the rising tourist numbers, so too has been the rise of unlicensed properties in Thailand’s hot tourist spots.

The order was made through the controversial Article 44 powers which doesn’t provide for debate or parliamentary endorsement. When announced last week the Thai PM said the order was aimed at bringing illegal hotels and accommodation service providers under better control and boost safety and reliability for guests.

The order will require smaller, unregistered accommodations to comply with the same regulations as properly registered hotels – building regulations, room sizes, the amount of fire extinguishers required, fire escapes, standards of accommodation, accounting standards, etc. The government says there will be a period given – up to 90 days – for properties to operate whilst they get their compliance and standards up to date.

Authorities are also reportedly planning amendments of the Hotel Act to bring room-sharing platforms like Airbnb under a legislative framework. Currently the act allows accommodation offerings with less than four rooms to operate without a hotel licence.

A law-firm has, in English, gone through the steps needed for unregistered accommodation to comply with the Hotel Act….

How to obtain a hotel license in due course

A hotel is defined under the Hotel Act 2004 as any business providing paid accommodation for less than a month, irrespectively of the number or capacity of the rooms. Even the smallest villa and a one-bedroom condominium unit can qualify as a hotel under the law. However, the Hotel Act legitimises ministerial regulations to regulate this otherwise.

To successfully apply for a hotel business application, in general, these seven steps are required:

Step 1: Is the business exempted under the 4-20 privilege? An application is only needed if (i) the business qualifies as a hotel and (ii) such hotel is not license-free. Under the Ministerial Regulation 2008, a hotel license is not required if the business

  • has not more than four rooms on all floors in all buildings,
  • has a total service capacity of no more than twenty guests,
  • qualifies as a small business which provides an additional source of income for the owner, and
  • reports its daily rental business to the government (hotel registrar).

If the business is in-line with these requirements, it is unclear whether it does not qualify as a hotel (“no hotel”) or whether it is a license-free hotel business (“type-zero hotel”). The latest court decisions seem to favor the latter interpretation.

In accordance with the ministerial regulation, hotels can be classified into different types as follows:

  • Type 0: hotels which are exempted from certain requirements including the need to obtain a hotel business license,
  • Type 1: hotels providing accommodation only, the number of rooms does not exceed fifty, the size of each room is not less than eight square meters,
  • Type 2: hotels providing accommodation and catering or restaurant services, the size of each room is not less than eight square meters,
  • Type 3: hotels giving accommodation, catering or restaurant services, the size of each room is not less than 14 square meters, and which has either conference rooms or entertainment venues which under the Place of Service Act could be a place for dancing, bars, and nightclubs or spa,
  • Type 4: hotels providing accommodation, catering or restaurant services, conference rooms, and entertainment venues, the size of each room is not less than 14 square meters.

For Type 3 and 4 hotels, no entertainment venues will be allowed unless these hotels have more than 80 rooms, are located in entertainment areas, or serve food, alcohol or entertainment only, and have opening hours after midnight.

You can read a full explanation about compliance with the Thai Hotel Act.

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