The Tourism Council of Thailand (TCT) has come up with a solution to help cash-strapped unlicensed small hotels whose assets may be confiscated due to excessive banking debts.
Thaneth Tantipiriyakij, president of the Phuket Tourism Council, was speaking after the group -- representing small and boutique hotels with around 200 properties in Phuket -- shared its members' problems with government representatives last month. The council discussed the situation and concluded the talks with a possible solution that could help smaller operators.
With no licences, these hotels have been forced to close and cannot earn enough income to repay their debts.
Mr Thaneth said that after analysing each problem, affected operators could be categorised into three subgroups.
The first is called the white group, or hotels which are ready to comply with the Hotel Act but don't have enough funds to follow some mandatory requirements, such as an Environmental Impact Assessment (EIA) report, which costs around 100,000 baht for hotels with over 80 rooms.
The grey group is for hotels that still need additional investment to modify building structures, such as fire safety exits, but don't have a sufficient cash flow to renovate.
The last one, called the black group, consists of owners who have properties built illegally, such as hotels that invade public spaces, or hotels that use the building contrary to its actual purpose, such as those providing condo units for daily guests, which is against the law.
Mr Thaneth said TCT has proposed permanently fixing these problems for all small hotels in Thailand as they are not limited to Phuket, but can be found anywhere as the Hotel Act cannot be amended to let small operators join more easily.
He said TCT will set up a fund to specifically solve the problems of each group. The first group, which only needs small investments, can borrow directly from the fund.
When they successfully register and reopen to guests without being forced to close, they can pay back the money, with interest, to the fund.
This solution would help hotels which cannot secure financing from banks.
For members of the grey group, who require huge investments, TCT will help them match up with investors by using close connections with the Federation of Thai Industries and the Thai Chamber of Commerce.
The TCT deal could guarantee a fair agreement for both sides, both in terms of price and conditions.
Meanwhile, the black group will be advised to take an exit by helping them move into other legal businesses to clear debts.
If those new businesses require knowledge training, TCT will help them get onto the right path.
"These solutions can help all stakeholders in the industry survive as the tourism recovery gradually gathers pace," said Mr Thaneth.
