Hotels and resorts: what Gulf families find when they look closely.

How the sector reaches a Gulf family

Almost nobody in this desk's client base arrives at Thai hospitality through a screening process. They arrive through use. The family has spent the Gulf summer on the west coast of Phuket, or on Samui, or in Hua Hin, for a decade. They know which beach is swimmable in July, which villa managers answer the phone, which properties have real walls and which have hedges. That accumulated knowledge is genuinely valuable and it is the strongest thing a family brings to the table. It is also, on its own, an insufficient basis for an acquisition, because everything a guest sees is the part of a hotel that is designed to be seen.

The transition from guest to owner introduces four subjects a guest never encounters: what sits underneath the land, whether the building may lawfully be operated as a hotel, who runs it and on what terms, and what the accounts actually say once you can see them. Those four are the substance of this guide. What follows describes structures and process. It contains no view on whether any Thai property is a good purchase, no projection of returns, and no encouragement to proceed, because those judgements belong to the buyer and to advisers regulated to give them.

Land, and the structures underneath a hotel

Foreign nationals generally cannot own land in Thailand. That single rule shapes every hospitality structure in the country. Condominium units can be held freehold by foreigners within a statutory quota of a building's saleable area, which is why branded residences and condominium hotel units are so often what a foreign buyer is offered. Land itself is normally reached one of three ways: a registered long lease, commonly for a thirty year term with renewal provisions whose enforceability against a future owner is a matter to take advice on rather than to assume; a Thai company that genuinely satisfies the ownership requirements and holds the land, which is legitimate only where the Thai shareholding is real; or a statutory route such as Board of Investment promotion or an industrial estate framework, where land holding is permitted for a qualifying activity.

Rights of usufruct, superficies and habitation exist as additional tools and are sometimes layered over a lease to strengthen a position, particularly for a residence rather than an operating hotel. Each has a defined scope and a defined duration and none of them converts into ownership. Our property library treats leasehold against freehold, usufruct and superficies, and villa structures in Phuket in dedicated guides, and a buyer should read those before hearing a structure proposed by a seller. The general test is simple: if a proposed structure depends on someone not examining it closely, it is not a structure, and the risk of it unwinding falls entirely on the foreign buyer.

The hotel licence, which is a fact not an intention

Operating accommodation commercially in Thailand requires a licence under the hotel legislation, administered through the provincial and district authorities under the Ministry of Interior, with exemptions and categories that depend on the number of rooms and the nature of the operation. Separately, the building itself must be lawfully constructed and permitted for the use to which it is being put, which is a building control question, and in coastal and hillside locations there are additional constraints on setback, height and slope that have been enforced with varying vigour over the years.

The consequence for a buyer is that the licence position is a matter of documentary fact to be established before purchase, not a matter to be regularised after it. Properties operating as de facto hotels without the licence to do so exist, and buyers are sometimes told the licence is in process, or that the arrangement is normal locally, or that the units are sold as residences and merely rented out by a management company. Each of those may be true and each may also be the description of a liability. Establish what licences exist, in whose name, for what capacity, valid until when, and whether the building permit and the actual built structure match. A licence in the seller's name does not automatically follow the asset.

Operators and management agreements

Most owners at any scale do not run the property themselves. The common arrangements are a management agreement, where an operator runs the hotel for a fee while the owner carries the trading result; a lease, where an operator takes the property and pays rent; and franchise or brand licence arrangements, where the owner operates under a brand. International operators run properties across Thailand under all three, and the branded residence model overlays a fourth arrangement in which individual unit owners place their units into a rental programme.

The clauses that decide how this feels to own are the term and renewal, the fee structure including any incentive element and how it is calculated, the performance test and what happens when it is failed, the owner's approval rights over budget and capital expenditure, the reserve for furniture and equipment renewal and who controls it, the territorial restriction preventing the operator opening next door, the treatment of employees, and the termination and transfer provisions. A Gulf family that also wants the property to accommodate its own use, its own guests, or an alcohol free operating policy needs those written in at the outset, because they are structural rather than operational and an operator will resist adding them later.

What diligence looks like

• Title search at the Land Department: the deed type, the registered owner, the exact boundaries, and the full encumbrance history
• Encumbrances: mortgages, registered leases, usufructs, servitudes, rights of way and access, and any court or execution entries
• Access: whether the legal right of way to a public road is registered rather than merely used in practice
• Building: permits, as built compliance, occupancy documentation, and any enforcement history
• Licences: hotel licence, alcohol and food licences where relevant, pool, signage, and any tourism registration
• Corporate: if the asset sits in a company and shares are being bought, the company's full history, liabilities, tax position and shareholder legitimacy
• Financial: audited accounts, trading records, forward bookings, and the management agreement in force
• Employment: staff numbers, contracts, service charge arrangements and severance exposure
• Environmental and coastal: setback, slope and any assessment requirements applicable to the site

Buying shares in a company that owns an asset is a different transaction from buying the asset, and it carries the company's history with it, including liabilities that are not visible in the property itself. Where a Thai company is involved, the legitimacy of its Thai shareholding is part of the diligence, not an awkward question to be avoided. Our property due diligence checklist sets out the method in full and applies equally here.

Running a property to a family's own standards

Gulf owners frequently want operating characteristics that a standard operator template does not assume: an alcohol free property or alcohol free zones and events, halal certified kitchens with the certification verified per establishment through the Central Islamic Council of Thailand, prayer space with qibla marked, women only pool or spa hours, female therapists and staff, and privacy provisions covering photography and guest lists. All of these are achievable and none of them is unusual to operators serving this market. They belong in the management agreement and the operating standards annexed to it, agreed before signature. Retrofitting them into a running hotel is a negotiation from a weak position.

What we will not tell you

We will not tell you that Thai hospitality is a good investment, that occupancy or rate will do anything in particular, or that any projection put in front of you is reliable. Rental guarantee and return schemes are marketed heavily to foreign buyers in this market and the value of any guarantee is the covenant of the party giving it, which is a matter to have examined by your own advisers rather than a number to be believed. What our office does is preparatory and coordinating: assembling the diligence, briefing the Thai lawyers and accountants you appoint, coordinating with your family office in the Gulf, and being present in Bangkok or on the island when someone needs to be. The decision is yours and your advisers'.

Land ownership rules, hotel licensing and building controls are matters of law and of the specific site, and marketing material is not evidence. Verify title and encumbrances with the Land Department, hotel licensing with the provincial or district authority under the Ministry of Interior, company records with the Department of Business Development, and halal certification per establishment with the Central Islamic Council of Thailand at halal.or.th. Appoint your own Thai legal, tax and valuation advisers, independent of any seller, agent or operator, before signing anything or paying any deposit.

This briefing is general information, not legal, tax or investment advice. Thai rules change frequently and individual cases differ. Verify current requirements with the relevant authorities, including the Immigration Bureau, the Board of Investment, the Land Department, the Department of Business Development and the Revenue Department, and take advice on your own facts before acting.