Hotels in Thailand Oppose Government Plan to Exclude Five-Star Hotels from “Thai Tiew Thai Plus” Scheme

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Thailand’s hotel industry is pushing back against a proposal that could exclude five-star properties from the government’s planned “Thai Tiew Thai Plus” domestic tourism subsidy scheme. Hotel owners and operators argue that using star ratings to determine eligibility would create an unfair dividing line between businesses and could leave smaller luxury and boutique hotels without support, despite many of them operating on a scale comparable with other small and medium-sized hospitality businesses.

The debate comes as the government considers how to structure the latest tourism stimulus programme so that public funding reaches smaller operators and encourages more domestic travel. While preventing large corporations from absorbing a disproportionate share of the subsidy is understood to be one of the objectives, this Thailand Hotel News report highlights growing concern within the hospitality sector that star classification alone is a poor measure of the actual financial size of a hotel business. Operators are instead calling for eligibility to be assessed using annual revenue, workforce size and legal registration.

Five Stars Does Not Necessarily Mean a Large Hotel Company

At the center of the dispute is a relatively simple argument: a five-star rating describes the standard and facilities of a hotel, but it does not necessarily describe the financial size or ownership structure of the business.

Thailand has numerous independent luxury hotels, resorts and boutique properties that may have relatively small room inventories and limited numbers of employees. Some have invested heavily in design, service, facilities and guest experience to reach five-star standards while remaining comparatively small businesses.

Hotel operators therefore believe that automatically removing every five-star property from Thai Tiew Thai Plus could unintentionally penalize independent operators alongside major hotel groups.

Industry representatives are urging policymakers to distinguish between the quality classification of a hotel and the economic scale of the company operating it.

The issue is particularly important for boutique properties. A small luxury resort with a limited number of rooms could qualify economically as a small or medium-sized enterprise while nevertheless holding a five-star classification because of the quality of its accommodation, facilities and services.

Revenue and Employment Proposed as Fairer Measures

Instead of relying on hotel stars, operators are proposing that the government use established small and medium-sized enterprise criteria based on revenue and employment.

The Office of Small and Medium Enterprises Promotion (OSMEP) standards to define small and mid-sized enterprises cited by executives of the hotel industry aim to ensure support for smaller, licensed boutique properties and divide service businesses into categories according to annual earnings and workforce numbers. Micro enterprises are generally defined as having annual revenue not exceeding 1.8 million baht and no more than five employees. Small enterprises have annual revenue of up to 50 million baht and generally employ no more than 30 people, while medium-sized enterprises can have annual revenue of up to 300 million baht and employ up to 100 people.

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Using criteria of this kind would allow the government to distinguish between genuinely large hotel companies and smaller independent businesses regardless of the number of stars displayed outside the property.

Hotel operators believe this approach would more accurately achieve the government’s apparent objective of directing support towards small and medium-sized tourism businesses.

It could also prevent an unusual situation in which a small five-star boutique hotel is excluded while a much larger lower-rated property remains eligible simply because it carries fewer stars.

Licensed Hotels Should Be Prioritized

Another important demand from the hotel sector is that participation in Thai Tiew Thai Plus should be limited to legally licensed accommodation businesses.

Licensed hotels face operating costs, taxation, regulatory requirements, staffing obligations and compliance expenses that informal accommodation providers may avoid. Thailand’s established hotel industry has for years raised concerns about competition from unlicensed accommodation, including properties operating through short-term rental channels.

Making legal hotel registration an important condition of participation could therefore serve two purposes. It would ensure that government tourism spending supports businesses operating within the regulatory system while potentially encouraging informal operators to register properly if they want access to future state-backed tourism programmes.

For legitimate operators that have invested in complying with hotel regulations, this is viewed as an important question of fairness.

Investment in Quality Should Not Become a Disadvantage

Hotel owners have also questioned whether excluding five-star establishments could send the wrong signal to businesses that have invested in improving their properties.

Upgrading rooms, facilities, restaurants, technology, safety standards, landscaping and guest services requires considerable capital. For independent operators, reaching a higher hotel classification can represent years of investment rather than evidence that the property is controlled by a wealthy corporation.

If a hotel improves sufficiently to obtain a five-star rating and subsequently loses access to a domestic tourism support programme solely because of that improved classification, operators argue that the policy could effectively disadvantage businesses for raising their standards.

That concern has broader implications for Thailand’s tourism competitiveness. The country has long sought to attract higher-value visitors while encouraging hotels and resorts to improve quality. Industry operators consequently want tourism stimulus measures to complement that strategy rather than create a perceived penalty for properties that invest in higher standards.

Dynamic Pricing Also Enters the Debate

The hotel industry is additionally calling for flexibility over room pricing under Thai Tiew Thai Plus.

Hotel room rates are rarely static. Prices change according to season, occupancy, destination, weekends, public holidays, special events and market demand. Operators therefore favor a system capable of accommodating dynamic pricing rather than forcing hotels into rigid room-rate structures that may not reflect normal commercial conditions.

Allowing participating properties to use realistic market pricing could make the programme more attractive to hotels while still giving travelers the benefit of the government co-payment.

Appropriate safeguards would nevertheless be important to ensure that prices are not artificially increased simply because a government subsidy is available. A workable scheme would need to balance commercial flexibility for hotels with transparency and value for taxpayers and travelers.

Government Proposal Has Yet to Become a Final Rule

An important distinction is that the possible exclusion of five-star hotels should not be regarded as a final nationwide rule at this stage. The available information indicates that excluding luxury properties has been raised during government discussions over the structure of the programme, rather than established as a final legally binding condition.

The idea is understood to have emerged as policymakers considered ways of ensuring that the programme primarily benefits smaller tourism businesses instead of directing a large proportion of the available budget towards major operators.

Hotel businesses are therefore making their case while the programme parameters are still being considered.

That timing could prove significant. Establishing revenue and employment thresholds before the scheme is finalized would be considerably easier than attempting to correct eligibility problems after participating hotels have already registered.

Domestic Tourism Support Remains Important

The argument also illustrates the challenge facing policymakers when designing broad tourism stimulus measures for a highly diverse hotel industry.

Thailand’s accommodation sector ranges from small family-operated hotels and independent boutique resorts to major domestic groups and international luxury brands. Star ratings alone cannot always capture those differences in ownership, revenue, staffing levels or financial resources.

A carefully targeted Thai Tiew Thai Plus programme could stimulate domestic bookings while distributing spending across destinations and supporting employment, restaurants, local attractions, transport providers and other businesses connected with hotel guests.

For hotels, the central question is therefore not whether assistance should be targeted, but how the government defines the businesses that should receive it.

A Revenue-Based System Could Offer a More Precise Solution

The dispute over five-star hotels demonstrates why the final design of Thai Tiew Thai Plus will be closely watched across Thailand’s hospitality industry. Hotel owners and operators are not simply seeking automatic inclusion for every luxury property; their argument is that eligibility should reflect the actual economic scale of each business rather than its star classification.

Using revenue, employee numbers and licensing status could provide policymakers with a more precise mechanism for directing assistance towards genuine small and medium-sized operators while still allowing the government to restrict support for businesses that exceed defined thresholds.

For smaller luxury and boutique properties, the outcome could have a meaningful impact on their ability to compete for subsidized domestic bookings. For the government, the challenge will be creating rules that protect public funds without unintentionally excluding legitimate independent businesses that have invested heavily in quality. A balanced final framework could strengthen domestic tourism, reward legally registered operators and ensure that improving hotel standards does not become a reason for losing access to support.

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