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Wednesday, July 24, 2024

Thai Hotels Seek Government Aid for Green Renovations

On 1 July 2023, hotel operators in Thailand intensified their efforts to secure government support, specifically in the form of tax deductions or subsidies for renovations, emphasizing green energy improvements. The Thai Hotels Association (THA) is scheduled to discuss these proposals with the finance minister, aiming to boost the competitiveness of legally licensed hotels across the nation.

THA President Thienprasit Chaiyapatranun highlighted the severe financial challenges facing mid-scale hotels, which continue to suffer from the economic impact of the pandemic. Many of these hotels lack the necessary cash flow for essential renovations and are struggling to compete with unregulated accommodations, such as newly converted condominium units. Thienprasit stressed that these mid-scale hotels, which have operated for many years, are at the highest risk.

In 2020, the Finance Ministry introduced a tax relief measure allowing hotels to deduct 1.5 times the expenses incurred from building extensions or renovations, significantly aiding the revival of the hotel industry. Thienprasit is advocating for a similar scheme to help smaller hotels upgrade their facilities, making them more attractive to tourists.

The Tourism Authority of Thailand (TAT) is also playing a crucial role by encouraging hotels, especially those in second-tier cities, to install electric vehicle (EV) chargers. This initiative aligns with TAT’s strategy to promote domestic travel among EV owners by increasing the availability of charging stations, thereby making travel to less frequented destinations more feasible.

Somradee Chitchong, deputy governor for domestic marketing at TAT, suggested that including tax deductions for EV charger installations in hotels would support the agency’s plan to boost domestic trips by EV owners. She noted that more charging stations at hotels would facilitate EV drivers, encouraging them to explore new destinations beyond major provinces.

The growing EV market, bolstered by substantial government subsidies, and high domestic airfares could further incentivize road trips if more hotels offer EV charging facilities. The government’s subsidy scheme provides up to 100,000 baht per vehicle purchase, significantly driving EV adoption.

Former THA President Marisa Sukosol Nunbhakdi raised additional concerns about the financial burden on hotels due to the land and building tax, which is calculated based on continually appreciating land values. This tax creates significant financial strain, especially for small and medium-sized hotels in prime locations like Bangkok, which face stiff competition from both direct rivals and condo owners who illegally list rooms for daily bookings.

The combined efforts of the THA and TAT underscore a broader strategy to support Thailand’s hotel industry. This strategy aims to enhance travel experiences for tourists and encourage the growth of sustainable travel practices within the country. By securing government support and implementing innovative solutions, these initiatives could pave the way for a more resilient and competitive hospitality sector in Thailand.

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