Many hotels failed to make a profit during the low season, but they cannot temporarily close as they need a steady revenue stream to cover fixed costs, such as the Land and Buildings Tax, THA president Thienprasit Chaiyapatranun said.
A realistic target for foreign tourism arrivals this year is 33 million, down from the 35.5mn that Thailand welcomed last year, he said, reports the Bangkok Post.
The Thai Chamber of Commerce has urged the new government to cut the land tax rate by half in 2026 to cushion the economic impact on the business sector. Mr Thienprasit said his group agrees with this proposal as a short-term remedy.
However, the THA would like the government or the new cabinet formed after next year’s general election to consider revising and amending the land tax enacted in 2019.
“For any law, it’s normal to have a revision after a certain period,” he said. “The current land tax has already proved to be inflexible in the face of changing conditions compared to the previous Household and Land Tax.”
Previously, hotels paid tax based on their revenue, but the current land tax requires them to pay a fixed rate based on the land appraisal value.
Mr Thienprasit said bringing back the Household and Land Tax might not be necessary.
Instead, he suggested, the Ministry of Finance should consider a hybrid structure, tapping the strengths of both the old and current tax systems to help operators survive during difficult times.
He said not only hotels would benefit from this scheme, the revision would also help small and medium-sized operators struggling to earn income during the economic slowdown, such as local grocery stores competing with franchised convenience stores.
INVESTMENT OUTLOOK
Even though international arrivals to Thailand have sagged, the pace of new hotel investment in the five-star category has not slowed, though overall transaction value still lags countries where tourism is booming.
According to the property consultancy JLL, hotel investment transactions in Thailand totalled $301 million (B9.5 billion) in the first half of 2025, and are forecast to reach B20bn by year-end, largely driven by local investors.
Japan topped the ranking with a value of $744mn or B23.5bn), Australia ($546mn or B17.3bn) and South Korea ($504mn or B15.9bn).
Mr Thienprasit said the investment transactions reflect the tourism situation in each country.
In Thailand, some hotel owners want to put their properties up for sale, but cannot finalise deals, as the offers from buyers are unacceptably low, he said.