The Thai cabinet approved in principle on 8 May 2007 two draft Ministerial Notifications, to be issued under the Hotel Act B.E. 2547, as proposed by the Ministry of Interior. The aims of the draft Ministerial Notifications are to exclude small-sized hotels or guest houses from the definition of a hotel and to eliminate impractical criteria imposed on hotels of all sizes pursuant to the Building Control Act B.E. 2522 (as amended). These two drafts are to be scheduled for the Council of State for revision, followed by an approval from the Cabinet.

Full Update

Since the Hotel Act came into force in 2005, most small-sized hotels and guest houses with a limited number of rooms have faced problems in applying for a hotel license. This is as a result of the Building Control Act, which lays down certain requirements in relation to building structures, required facilities, safety and environmental measures which hotels and guest houses regardless of size are required to comply with. Some hotels and guest houses, mainly those run by local rural inhabitants with small amounts of investment, are unable to comply with the requirements and are not eligible to obtain licenses. Consequently, these establishments have operated illegally without the control or supervision of the relevant authority.

In an attempt to legalise small-sized hotels and guest houses by enabling them to be eligible to obtain a hotel license, two draft Ministerial Notifications are to be issued under the Hotel Act. The first draft Ministerial Notification is to amend the definition of a hotel to exclude public residences with not more than 4 rooms in all floors in aggregate, whether in a single building or several buildings, and with a total service capacity of 20 guests.

The second draft Ministerial Notification regarding the Criteria and Conditions of Hotel Businesses classifies hotels into 4 types and lays down conditions which are more practical and more easily complied with by all sized hotels.

These classifications are to be as follows:

Type 1: hotels providing accommodation only, provided the number of rooms does not exceed 50;

Type 2: hotels providing accommodation and catering or restaurant services;

Type 3: hotels providing accommodation, catering or restaurant services, and either conference room services or places of entertainment, for example, pubs, clubs, bars and spas, under the Place of Service Act B.E. 2509 (as amended); and

Type 4: hotels providing accommodation, catering or restaurant services, conference room services and places of entertainment.

Under the second draft Ministerial Notification the conditions of Type 1 and Type 2 Hotels are similar, except that Type 1 Hotels are not to have more than 50 rooms. One of the conditions imposed on both Type 3 and Type 4 Hotels is that if they wish to operate places of entertainment, they shall have more than 80 rooms. However, such restrictions will be waived if the hotels are located in entertainment areas or if the place of entertainment is operated by the hotel which is limited to serving food and alcohol, entertainment and has opening hours after 12 p.m.

The major foreseeable outcomes would be that:

1. Any residential place open for public rental with 4 rooms or less and having a servicing capacity of not more than 20 guests shall not be regarded as a hotel. They can legally operate without obtaining a hotel license and do not need to comply with the Hotel Act; and

2. Type 3 and Type 4 Hotels wishing to operate places of entertainment shall have a capacity of at least 81 rooms, unless the hotels are located in the entertainment areas or they operate their own limited entertainment venue.

We will follow up the situation and any movement of these two drafts and will provide you with further information through another Legal Update.

For further information, please contact:

Name: Anurag Ramanat
Phone: +662 677 7555 ex162
Fax: +662 677 7599

Name: Araya Akomsoonthorn
Phone: +662 677 7555 ex160
Fax: +662 677 7599

Name: Sirirat Kongkiattiwong
Phone: +662 677 7555 ex197
Fax: +662 677 7599