Unlicensed Phuket Hotels Face Two Month Ultimatum

Phuket Governor Chokchai Dejamornthan has issued an ultimatum to illegal hotels to either register before January 31^{st ,} 2017, or face legal action.

According to the Phuket Gazette, the crackdown was announced in a public meetings with government officials and the press on Thursday.

The Phuket Provincial office has said there are currently 424 registered hotels currently under operation, and an estimated number exceeding 1,300 are running without a license.

Looking closer at the issue, the main targets of the crackdown are residential properties such as condominiums who are selling overnight accommodation to tourists.

What is unclear in the registration process is how the government will connect the registration process to that of national legislation under the Hotel Act, in order that illegal properties are able to retroactively obtain hotel licenses.

This remains a significant issue, given the disconnect between building regulations and requirements that vary between hotels and residential properties.

For now though increasing pressure is coming both from the hotel sector and also the Thai Revenue Department along with the knock-on pressure from local taxation.

Bloomberg has reported that Airbnb has now changed their policy on setting automatic limitations on the number of nights hosts can rent out properties. This is a direct response to added pressure by cities and government action.

Under the new guidelines in London hosts will now need a license for annual rentals exceeding 90-days, while in Amsterdam a 60-day threshold is being put into place.

Looking at the issue in Phuket, there are two taxes applied to hotel accommodation. One is a national government tax, while a second local tax is applied across Phuket Province. This falls under the  Phuket Provincial Administration Organization and varies depending on the relative Or Bor Jor.

For now, the issue of illegal hotels looks to be under increasing scrutiny, not only here in Thailand but across the globe. Though hotel licensing issues remain at odds for residential properties, what’s clear is the government is following the money trail.