Thailand awash with illegal hotels

BANGKOK, 3 February 2012: Over 300 unregistered hotels in Bangkok are being promoted heavily through internet hotel booking sites without service or security monitoring, Thai Hotels Association vice president, Surapong Techauvichit reported earlier this week.

He claimed hotels that failed to register and comply with the nation’s hospitality laws were a potential hazards and also deterred genuine investment in the industry.

He was speaking at a joint THA and Association of Thai Travel Agents meeting on Monday.

Mr Surapong noted that in Bangkok alone there were over 300 hotels in Bangkok selling rooms openly through booking sites. They failed to comply with the law that requires them to register with the Department of Provincial Administration under the Ministry of Interior.

“The association has conducted an investigation on Bangkok hotels and we discovered 532 hotels, representing 84,534 rooms, were active on the internet,” said Mr Surapong. “We checked this with the registrar at the Department of Provincial Administration and 353 hotels with 34,803 rooms had failed to register,” he added.

He claimed registration had a direct impact on quality of services, security, fire hazard checks and other requirements related to safety.

Thailand attracted 19 million tourist arrivals, up 19.84% from 15.5 million in 2010.

The THA report pointed out that the increase in tourist arrivals did not correspond with the percentage increase in overall hotel occupancy in Thailand last year, which increased by 12.45 points (from 52.65% to 59.21%).

An STR Global survey showed hotel yields in the country improved marginally with Phuket outperforming other destinations. However improvements were estimated to be less than 3%.

“The increase in tourist arrivals did not deliver improvements for hotels,” said Mr Surapong. “We have to assume more travellers are staying in unregistered hotels.”

He claimed tourist safety was at risk as the law had no control over these properties.

If there are health related accidents or a failure in hygiene it hurts the reputation of all hotels in Thailand, but in most cases the culprits are not even registered,” he added.

He pointed that apartments that open for daily rentals made the competition unfair.

“They do not pay the hotel tax Bt80 per room per year and they adopt a non-hotel system for calculating other taxes based on monthly revenue rather than daily.”

Thailand’s room supply exceeds market demand across the country confirmed by a national average for occupancy below 70%.

“Competition in Bangkok pushes down the average room rate to US$97, the second lowest in the Asia/ Pacific region,” he explained.

According to the data provided by the Department of Provincial Administration under the Ministry of Interior, Thailand has 6,057 hotels and 285,923 rooms registered. Bangkok has 329 hotels, Chonburi 334 hotels and Surat Thani 492 hotels. No data was provided on key destinations like Phuket, Krabi and Mae Hong Son.

Currently THA has 709 hotel member hotels with 126,283 rooms.