The global rebound in tourism after Covid-19 has driven a notable surge in short-term rentals (STRs) through online platforms. Offering travellers greater flexibility, STRs have become a popular alternative to traditional hotels, particularly in urban and tourist-heavy areas. In the European Union, their use has expanded rapidly, reflecting forecasts that predict continued growth fuelled by competitive pricing and evolving travel preferences.
In Thailand, many property owners are increasingly turning to short-term rentals to supplement their income. However, the regulatory environment remains murky -- especially when it comes to condominiums. While short-term leasing was previously tolerated under certain interpretations, a 2022 directive from the Department of Lands reaffirmed that condominiums are for residential use only, effectively banning daily rentals.
Despite this restriction, demand from tourists and supply from owners have persisted, fuelling a parallel market that often operates outside official oversight. This unregulated growth poses several problems: it disrupts long-term residents, undermines the authority of condominium associations, and prevents the state from collecting appropriate taxes. Without a modern legal framework, Thailand risks allowing informal practices to erode community trust and economic opportunity alike.
This policy gap invites a crucial question: how can Thailand balance the rights of individual property owners with the collective rights of co-owners and communities? The answer may lie in a dual-layer regulatory approach that ensures both state oversight and local autonomy.
A well-functioning STR system should begin with a clear state-led mechanism. Owners who wish to rent out their properties short-term should be required to register through a national online system. This registration would enable the state to maintain accurate data on rental activity, enforce minimum standards, and collect relevant taxes. More importantly, it empowers municipalities to tailor enforcement based on local conditions, whether by limiting the number of units, maximum rental units per building or addressing local infrastructure strain.
The second layer involves empowering communities themselves. Current Thai law does not formally recognise the role of condominium co-owners or juristic persons in regulating STRs. However, legal reform could change this. Building bylaws could be granted legal weight, allowing communities to set binding rules on rental activity, such as whether STRs are permitted, how many days per year a unit may be rented, or whether STR units must pay higher maintenance fees. Owners could also be required to notify juristic entities in advance and provide emergency contact details to ensure accountability.
This dual approach would allow for flexibility in different residential contexts. In mixed-use or STR-oriented developments, such as "condotels," developers should be required to disclose zoning plans and shared space policies at the point of sale. Differentiating facilities, implementing tiered security protocols, and assigning appropriate maintenance fees would help minimise conflict between long-term residents and short-term guests.
By combining centralised registration with localised rules, this framework respects individual property rights while enabling communities to mitigate negative externalities, like noise, security issues, and wear on shared infrastructure.
Global experiences in STR regulation provide useful benchmarks for Thailand. While strategies vary widely, most are designed to strike a balance between economic innovation and residential stability.
In New South Wales, Australia, STRs are governed through a combination of legislation and a formal code of conduct. Owners must register with local authorities before offering short-term stays, and municipalities are responsible for enforcement, monitoring, and setting local caps on STR density. This structure helps prevent STR oversaturation and protects community interests.
A relevant example may be found in Indonesia, whose tourism landscape and regulatory culture resemble Thailand's. Indonesia has adopted a risk-based approach: large-scale, professional lodging operations are held to stricter standards, while low-risk operators -- such as small villas or unrated STRs -- benefit from more relaxed requirements. Still, all providers must comply with applicable tax regulations and meet core health, safety, and administrative standards, ensuring a baseline of consumer protection without overburdening informal hosts.
These case studies illustrate that regulation does not require a one-size-fits-all solution. What matters is a framework that is responsive, enforceable, and sensitive to local context.
Thailand lacks a legal foundation tailored to the realities of today's short-term rental market. The existing Hotel Act, drafted in a different era, has failed to keep pace with digital platforms and the democratisation of lodging supply. This outdated framework creates uncertainty for both owners and renters, exposes communities to unmanaged externalities, and prevents the state from effectively regulating or taxing STRs.
Reform must begin by establishing legal clarity. A new law should define what constitutes an STR, which types of properties may be eligible, and who has regulatory authority at various levels. Local governments that understand the nuances of their communities should be given primary oversight responsibilities, with clear mandates and tools for enforcement.
At the same time, minimum consumer protection standards should be required across the board. These include basic safety protocols, quality-of-service guarantees, and a requirement that hosts remain contactable throughout the guest's stay. In high-density tourist areas, municipalities should have the flexibility to limit the number of rentals or guests permitted, especially during peak travel seasons, when demand pressures are highest.
The law should also provide mechanisms for community participation. Juristic condominium entities and homeowner associations should have a say in how STRs operate in their buildings or neighbourhoods. Empowering these groups to enforce building-specific rules ensures that STR growth does not come at the expense of community cohesion.
Far from stifling opportunity, a clear legal framework would unlock economic benefits. STRs offer an accessible path for individual property owners to generate income, especially in the wake of Covid-19. Legal recognition would also encourage real estate investment in rental-oriented developments, stimulating the construction sector and generating employment.
Importantly, legal clarity would enable the government to collect taxes more effectively, aligning revenue with the actual use and type of property. A fair, tiered taxation system would ensure that large-scale operators contribute appropriately without burdening small, casual hosts.
Perhaps most critically, effective regulation would reduce the social costs of unregulated STR activity, protecting long-term residents from disruption, preserving community trust, and closing the legal loopholes that allow certain actors to profit without accountability.
Thailand stands at a crossroads. The informal expansion of short-term rentals presents both an economic opportunity and a regulatory challenge. Left unmanaged, it risks disrupting residents and leaving potential tax revenue on the table.
A dual-layer legal framework, grounded in national regulation and strengthened by local governance, can provide the clarity and flexibility needed to manage this evolving sector. Revisiting and modernising outdated hotel laws is no longer optional. It is an essential step toward a fairer, more balanced future for Thailand's housing and tourism landscape.
Wichayada Amponkitviwat is a researcher and Khemmpat Trisadikoon is a senior researcher at TDRI. Policy analyses from the TDRI appear in the Bangkok Post on alternate Wednesdays.