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Faqs

Hospitality

Service is Everything in Hospitality and Law

No, protection of employment applied under the Labour Protection Act.

Yes, subject to various conditions including some of the following:

1. the consent of all owners has been obtained for operation of a hotel, and for change of use of the building from a condominium to be a hotel

2. change of use of building has been effected

3. rules and regulations allow commercial use

4. rights of co-owners with regards common property are not violated

5. the building is in compliance with the Building Control Act

6. there is valid hotel license in place

1. The management fees: base fees; incentive fees

2. The term and termination provisions

3. The rights to appoint the GM and FC

4. The rights to audit operations including accounts

5. How other expenses are charged – central services and marketing fees; regional fees; trademark license fees; out of pocket expenses

6. Provisions relating to capital renovation – CAPEX

7. Insurance and Liability

8. Special Conditions

All of these should be captured in summary form in an LOI / MOU.

Yes, such an agreement is a ‘hire of work’ agreement and therefore is governed by the Revenue Code of Thailand which contains a schedule of rates relating to applicable stamp duty.

Item 4. of the Schedule ‘Hire of Work’ denotes the rate as 1THB out of every 1000THB of remuneration prescribed.

On many Hotel Management Agreements, the rate of the payments for the hire of works will fluctuate from year to year over long periods of time, such as 15 or more years.

Therefore, an estimate of the amount payable based on a percentage over the term would be paid in advance. Communications directly with the Revenue Department, and a presentation of the Hotel Management Agreement are necessary to establish the applicable charges based on the applicable rate.

The party which has to pay is the ‘contractor’ that is the party employed by the employer. Therefore, in a hotel management agreement, it is the manager that is liable for the application of stamp duty.

No. This is a major issue with those that wish to provide temporary accommodation, but actually cannot conform to the applicable legislation.

The main legislation governing the specifications of buildings is the Building Control Act. Under this Act, ministerial regulations are issued which can vary from Province to Province the regulations. For example, different regulations to buildings apply in Bangkok than to Phuket.

In order to build a building that will be a hotel, the necessary environmental applications and consents must be processed. This can comprise of a light “IEE” application or a heavier full blown “EIA” application. This determines the documents that are used to register the ‘use of the building’ with the administrative authorities.

1. accommodation only, less than 50 rooms, size of each room is not less than 8 square meters

2. accommodation and catering or restaurant services, the size of each room is not less than 8 square meters

3. accommodation, catering or restaurant services, the size of each room is not less than 14 square meters and which has either conference rooms or entertainment venues under which the Entertainment Place Act 1966 (subsequently amended) applies- places for dancing; bars; nightclubs

4. accommodation, catering or restaurant services, conference rooms and entertainment venues, the size of reach room being not less than 14 square meters

For type 3 and 4 votes, no entertainment venues are allowed unless the hotels operate more than 80 rooms, although this can be waived if the hotels are located in ‘entertainment areas’ or if operated by a hotel which serves food; alcohol or entertainment only and opens after 12:00pm

Not necessarily. Generally speaking providing accommodation for periods exceeding one month as a general term of rental would most likely not be constitute hotel business.

Anyone providing temporary accommodation for less than 1 month must then consider if they are ‘excluded’ from having to obtain a hotel license. Exclusions include lodgings which have no more than 4 rooms.

Kindly note that is one single owner of one unit within a complex containing multiple units, exceeding 4 in number, can be deemed to become part of a ‘hotel operation’ if the type of temporary use is less than 30 days for those units.

This therefore impacts upon buildings where there may be widespread use of 3rd party temporary accommodation providers such as Airbnb; Agoda, and similar.

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