Hotel operators are expressing concerns over proposed changes to foreign ownership rules in real estate, fearing it could result in a rise in illegal hotels in Thailand.

The government’s proposal includes extending the leasehold period for foreigners to 99 years and increasing the foreign ownership quota in condominiums from 49% to 75%.

These measures could negatively impact the competitiveness of Thai hotels by encouraging foreign buyers to exploit the tourism industry, according to Udom Srimahachota, vice-president of the Thai Hotels Association (THA).

Mr. Udom warned that with increased ownership, more foreign buyers might convert condo units into short-term rentals for tourists. Past incidents have shown agents from countries like China purchasing entire floors in condominiums and renting them exclusively to tourists from their home country in key tourism areas.

He highlighted that licensed Thai hotels face higher costs, including land and corporate taxes, while illegal accommodations operate without the same financial burden. Currently, there are around 16,000 licensed hotels in Thailand and approximately 15,000 unregistered ones.

In one instance, Russian agents bought out a condo project in Hua Hin, using the units solely for renting to Russian tourists, directly competing with licensed hotels, Mr. Udom added. He also raised concerns that with increasing flights from China to cities like Hua Hin, Chinese buyers may be drawn to invest in properties and illegally rent them to tourists.

He further questioned the proposal to lengthen leasehold terms for foreign land buyers, pointing out the existing trend of Chinese nominees developing housing, condo projects, and hotels. These investors often import both labor and construction materials from China, limiting the benefits to the local economy.

The THA has voiced these concerns to the Interior Ministry, calling on the government to focus on enhancing the competitiveness of Thai hotels. Mr. Udom also urged the administration to ease financial restrictions, allowing small and medium-sized hotel operators better access to loans for renovations. He emphasized the importance of regulating non-hotel properties rented out to tourists, ensuring they are properly registered within the system.

Source: Bangkok Post

Yours sincerely,

The editorial team at Invest Bangkok Property