Travellers staying at a hotel in Phuket may be getting a little more than they bargained for. According to a new report from C9 Hotelworks, a hospitality consulting group, fewer than 25 per cent of the 1,724 hotels in Phuket are licensed. This comes despite a plea from the local government for tourists not stay at these properties.
These unlicensed hotels were given until 31st January of this year to register, but only 429 of the island’s properties have licences. A total of 1,001 hotel licences are still pending approval while a further 288 properties have not yet applied for their licence, shows C9 Hotelworks research.
“Local authorities are under pressure to tackle this issue, as strong demand from emerging economies continues to drive a sharp increase in tourism arrivals to Phuket. Phuket’s provincial government has undertaken an admirable large-scale initiative to tackle the proliferation of unlicensed hotels,” says C9 Hotelworks’ Managing Director, Bill Barnett, in the report.
While licensed properties are required to pay Phuket’s hotel tax, a 1 per cent tax on all hotel room rates charged on the island, unlicensed ones have been able to avoid this. This has hurt Phuket since government-funded infrastructure projects are not benefiting from the increase in both tourist arrivals and hotels in Phuket.
There are 33 hotels being developed in Phuket with more in the pipeline. Several of these feature prominent international brands such as Sheraton, JW Marriott, Best Western, InterContinental, Park Hyatt, Kempinski, Ramada, and Rosewood.
“Without the ability to apply hotel tax to unlicensed properties, the island is being denied much needed revenue that could be reinvested into infrastructure. There remains an imperative to ensure that the 1,295 unlicensed hotels currently operating in Phuket are dealt with swiftly and effectively, to ensure the issue does not do damage to the island’s international reputation,” says Barnett.
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