THA in the dark

BANGKOK, 11 April 2017: Thai Hotels Association says an in-depth study is needed to monitor online travel agency (OTA) developments and the potential impact of Airbnb on local hotels.

THA says the country needs concrete rules and regulations for these two segments, often called disruptive technology, due to their impact on traditional business models.

THA president, Supawan Tanomkieatipum, told TTR Weekly that OTAs are a selling channel that is making gains from selling rooms in hotels that are unregistered and illegal.

“Despite the expansion of OTAs, the share of overall room bookings remains small… for example, there are about 300,000 to 400,000 rooms, nationwide, but rooms sold on OTA websites amounts to only 1,000 to 2,000 rooms.”

However, she claimed that about 50% of rooms sold on OTA websites are illegal as they are not registered hotels.

She offered no supporting evidence to back her statement, neither did she explain how she arrived at an overall OTA inventory of only 1,000 to 2,000 rooms for the entire hotel industry in Thailand.

A simple calculation of the number of rooms sold by OTAs in Phuket would suggests the inventory exceeds 2,000. OTAs would also deny that 50% of the properties they sell are unregistered. However, hotels that join a sale channel are not obliged to supply proof or registration. They are checked for facilities and awarded a star rating by the OTA usually based on customer feedback. OTAs argue that licensing and registration is a matter between hotels and the relevant ministry and government agencies.

“To understand the situation, we need an indepth study to carefully monitor market trends before we set measures or policies.”

With reference to Airbnb, the president said the government should set concrete laws and regulations that extend registration requirements to accommodation in private homes.

Airbnb is an online marketplace and hospitality service, enabling people to lease or rent short-term lodging including vacation rentals, apartment rentals, homestays, hotel beds or hotel rooms.

“For instance, condominiums are for long-stay options not nightly rentals which comes under the hotel sector,” she said.

She added: “Similarly to the OTAs we need to study the details.”

To develop the country hotel industry, the association has joined hands with Ministry of Interior to encourage illegal hotels register. There are about 5,000 hotels that still need to register. They are illegal, but repeated efforts by THA in the past to lobby for clarity and a crackdown on illegal hotels failed.

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