A recent decision by a Thai court to rule against air bnb rental terms could have a significant impact on the home-sharing service as renting for less than a month is deemed illegal in the Kingdom.
Is it the end of a fairy tale for residences’ owners who rent their condo or a room to visitors through the Airbnb platform? Recently, a court ruled out that owners on Phuket island and Hua Hin who rented their property on a daily or weekly basis to tourists were actually acting illegally according to Thai law. According to the Thai law over hotels, people can rent their own apartment for at least a month and must then consequently register as a hotel business. Any other type of rental would then be deemed as illegal.
Most of the people renting appartments on the Airbnb platform enter of course in the ‘illegal’ category. Airbnb has been prospering well in Thailand. Between February 2017 and February 2018, the home-sharing application attractd 1.2 million guests, up by 66% over the previous years, earning to apartment’s owners a combined US$119 million in additional revenues. Over 61,000 homes are to be rent in Thailand on the app. – half of them being located in Bangkok or Phuket- bringing on average a US$2,100 income per year to the apartment’s owners.
Airbnb business is seen as a thorn in the eye of hotels’ owners as competition is already intense among them. Oversupply in accommodation all across Thailand over the last decade translated into falling prices for traditional hotels’ companies.
While uncertainty grows for Airbnb participants – Airbnb announced to meet officials in Thailand to look at the issue-, operation conditions should be redefined rather than being banned. The Bangkok Post talked to Thailand Minister of Tourism and Sports, Weerasak Kowsurat, asking about his opinion.
According to the newspaper, the Minister does not seem against Airbnb style platforms. He pointed out to the fact that in Japan for example, the government legally allowed apartment’s owners to rent out their place for a time span of six months. In Europe, where Airbnb is also facing critics from city administrations, many mayors have taken the decision to limit the number of rental days for each registered Airbnb owner. Generally, the maximum legal rental period is up to 3/4 months per year.
With its sense of compromise, it is likely that the Thai government could come with a similar solution. Especially as many Airbnb places are an opportunity to explore less-known areas of the Kingdom. And enjoy local lifestyle and an authentic experience, the heart of the current campaign of the Tourism Authority of Thailand.