Tax breaks fall flat: Hoteliers sceptical of Thailand govt incentives

The hospitality industry in Thailand is abuzz as the government unveils a new policy aimed at boosting tourism in secondary provinces through tax benefits for hoteliers. But the response from hotel entrepreneurs has been lukewarm at best.

According to the latest hospitality operators’ confidence index, a survey conducted by the Thai Hotels Association (THA) and the Bank of Thailand, 50% of the 102 respondents believe the tax policy will only increase their income by a mere 5% this year.

THA President Thienprasit Chaiyapatranun disclosed yesterday, August 14, that most of the rest anticipate no more than a 10% income bump.

Thienprasit noted that the primary concern for hotel operators is not addressed by the policy: the chronic shortage of skilled workers, a problem for around 40% of those surveyed.

Additionally, the survey revealed that approximately 70% of hotel revenue comes from tourist customers, with less than 20% stemming from the business sector, known as the MICE group (meetings, incentives, conferences, and exhibitions). This is particularly notable as the government’s push to promote tourism in secondary provinces is focused on the MICE segment.

Moreover, the survey indicated that in the third quarter of this year, over half of the hotel operators increased room rates compared to the previous year, with most 4-star establishments keeping price hikes within a 10% limit.

Hotel entrepreneurs are calling for more robust support measures from the government. Their wish list includes subsidies for utility costs, a delay in raising the minimum wage, and reductions in land and building taxes. They also advocate for broader tax deductions from business expenses.

Thienprasit further stressed the need for the government to play a proactive role in addressing labour shortages. Hoteliers are urging for the creation of a dedicated agency to source skilled workers and provide essential training, particularly in language skills, to existing staff, reported The Nation.

In related news, the collapse of German tour company FTI Group has resulted in significant financial losses for Thai hotels, totalling over 111 million baht.