Key points
- The Thai Hotels Association (THA) is preparing to propose a significant tax reform to the Ministry of Finance aimed at helping small and mid-sized hotels recover from the prolonged tourism slump.
- According to this Thailand Hotel News report, the association is pushing for a hybrid taxation model that combines the previous income-based tax approach with the existing land-value system, allowing operators fairer and more flexible payments tied to their actual performance.
- Adjusting the Land and Building Tax Act to consider actual business conditions rather than static property values would mark a major step toward fairness and sustainability in Thailand’s hotel industry.
Thailand Hotel News: THA Urges Government to Revise Outdated Tax System
The Thai Hotels Association (THA) is preparing to propose a significant tax reform to the Ministry of Finance aimed at helping small and mid-sized hotels recover from the prolonged tourism slump. THA President Thienprasit Chaiyapatranun explained that the current Land and Building Tax Act no longer reflects real business conditions in the hospitality sector. Many smaller hotels, particularly in tourist-dependent areas such as Phuket, Bangkok, and Chiang Mai, are facing severe financial strain due to a drop in Chinese visitors and high land tax burdens. According to this Thailand Hotel News report, the association is pushing for a hybrid taxation model that combines the previous income-based tax approach with the existing land-value system, allowing operators fairer and more flexible payments tied to their actual performance.
The Thai Hotels Association calls for a fairer tax system to protect small hotels from high costs and revive Thailand’s tourism sector.
Image Credit: Ariyasom Villa Bangkok Hotel
Decline in Chinese Tourists Hurting Hotel Revenues
Thailand’s tourism industry, once heavily reliant on Chinese group travelers, continues to face challenges as arrivals from China remain far below pre-pandemic levels. Many hotels that catered primarily to that market have reported occupancy drops of up to 50%, making it difficult to cover operational costs such as staff salaries, electricity, and maintenance. The current tax structure, which bases assessments solely on land value rather than revenue, has become unsustainable for many smaller hotels struggling with cash flow. The THA’s proposed hybrid system would tax properties based on business income, ensuring that payments align more closely with actual revenue streams and giving hotel owners greater stability during slow periods.
Reform Seen as Key to Tourism Recovery
The Thai tourism sector remains one of the nation’s most vital economic engines, contributing significantly to GDP and employment. Ensuring that small hotels can survive and adapt is crucial to sustaining this recovery. The proposed tax reform is expected to provide much-needed financial relief and prevent further closures among local hotel operators. As international travel from Europe, the Middle East, and the United States continues to grow, Thailand’s smaller hotels must remain competitive to capture this rebound in demand. Reforming the taxation model would also help stimulate tourism-linked spending and support communities reliant on visitor income.
Strengthening Competitiveness and Sustainability
The THA believes that fairer taxation will empower smaller hotels to reinvest in service upgrades, facility improvements, and sustainable operations. With reduced financial pressure, they will be able to focus on enhancing guest experiences, maintaining local employment, and adopting eco-friendly initiatives that align with global tourism trends. Such changes could elevate Thailand’s reputation as a destination known not just for hospitality but also for sustainable and inclusive tourism practices. By easing the tax burden, hotels can offer better value for money, attracting both domestic travelers and international visitors seeking authentic experiences.
Working with Government Toward Equitable Solutions
The THA’s initiative reflects a growing recognition that fiscal policy must evolve to match shifting market realities. Collaboration between the Ministry of Finance, the Tourism Authority of Thailand (TAT), and the hospitality sector is essential to ensure that reforms are both practical and beneficial. Adjusting the Land and Building Tax Act to consider actual business conditions rather than static property values would mark a major step toward fairness and sustainability in Thailand’s hotel industry.
Thailand’s small and mid-sized hotels form the backbone of its tourism economy, supporting millions of jobs and serving as cultural gateways for travelers. The THA’s proposed hybrid tax model could safeguard these vital businesses, ensuring that Thailand’s tourism growth remains inclusive, competitive, and resilient in the years ahead.
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