The sharing economy – such as home sharing, ride sharing and office space sharing – has become integral to the way we live. No matter where in the world we visit, we witness more and more businesses of this nature. Whilst the whole world is welcoming the sharing economy with open arms, Thailand paints a rather different picture: We are actually going against the current.

Around mid-May of this year, the Prachuap Khiri Khan Provincial Court ruled that the owner of a Hua Hin condominium residence illegally rented out their unit on a daily basis. The court stated that rentals via Airbnb or any form of home sharing in which a person rents a residence on a daily basis from a non-hotel entity would be a contravention of the Thai law. The ruling concluded that the owner was guilty of renting out their residence without a daily rent permit. Does the local law allow real-estate owner to apply for a daily-rent permit or are hotel operators the only group of entities allowed? No one has yet to offer an answer.

The people who will suffer from this ruling are buyers who have bought condominium residences as a long-term investment in response to the demand in Thailand’s tourism industry, as well as tourists looking for a new, more localised experience. I believe the issues to have a major impact on the tourism industry. Relevant entities need to tackle the them head on, especially the vagueness of the legal wording. We need to make sure that every party involved to reap the benefit equally – much like what has been done in other countries.

The Thai economy relies on tourism. The country has invited travellers and tourists, both local and foreign, to visit lesser known provinces with intriguing local customs and traditions, but their facilities are still lacking because investors are reluctant to build hotels. They are still unsure whether the demand would be as high as the government has estimated. It is the chicken or the egg causality dilemma. The economy cannot grow when every party is waiting for another to act first. Nonetheless, a home-sharing business such as Airbnb has the potential to propel the economic growth of these secondary destinations. It allows travellers and tourists to stay in existing homes of the locals. It allows them to get even closer to the local culture. Local vendors will be able to sell more. These lesser known towns will become better known. The economy will grow. With an increasing number of tourists comes an opportunity for investors to build a hotel that will help the town cope with the demand. 

For the scenario above to happen, Airbnb must first operate legally in major cities, such as Bangkok, Pattaya, Phuket, Chiang Mai and Hua Hin. When authorities in these major cities reject Airbnb, travellers and tourists will be under the impression that Thailand as a whole is against the business, which means secondary destinations will not grow or grow at a much slower rate. In the end, they will look to other countries, and our tourism industry will lose out in the long run.

Is it not already time for all parties involved to put all hands on deck and tackle the issue? We need to start with amending existing laws or pass new ones to regulate the sharing economy, such as allowing operators to apply for a short-term permit, which would able the state to collect more in income tax, a portion of which has been outside the system. We simply need to look at what has been done or what is in progress in other countries, such as in the UK, France, Italy, Singapore and the US, to accommodate the emergence of the sharing economy.

For example, Airbnb has worked with the City of San Francisco to enable homeowners to obtain a permit to rent out their homes on a short-term basis. In return, Airbnb must provide information on these homeowners and guests to the city. The result is growth in the tourism industry. The city collected more in taxes. Big data have been used to make plans for the tourism industry in a more efficient manner. Homeowners have an additional source of income to help them pay rent. It is evident that amending the laws has yielded benefit to the parties involved. 

In the case of Thailand, we still see taxi drivers rejecting passengers everywhere while travellers are going to local markets where we don’t think they would go, and entrepreneurs are working with just their laptops in co-working spaces. It is time to adapt to accommodate the sharing economy. We’ve seen adaptations around the globe or talks of plans to adapt. Are we going to stay still and do nothing, getting branded as a backward country?

Note: Writen by Srettha Thavisin, president of Sansiri Plc

Source: http://www.nationmultimedia.com/detail/Economy/30347586