Ms Naree, centre, said many hostels have been shuttered since the pandemic due to a lack of funds.

Hostel operators are calling for a new accommodation regulation dedicated to them, as the Hotel Act is not feasible for small-scale businesses with a low budget, according to the Hostel Thailand Association.

There are only 800 hostels offering 40,000 beds in Thailand, down significantly from 2019, when there were 1,200 hostels offering 60,000 beds, generating over 400 million baht revenue.

Naree Suneta, president of the Hostel Thailand Association, said the key mission of the association is to drive a new accommodation regulation specifically for hostel businesses, as only 10% of them are able to apply for a licence under the Hotel Act.

The recent ministerial regulations allowing accommodation that includes no more than eight rooms and space for 30 guests to become a non-hotel business only suits local homestays, but not hostels, as many hostels have over 30 beds, catering to up to 50 guests, she said.

She added that the hotel regulations are also too stringent in terms of the safety certification, and this usually requires a huge budget to develop the safety mechanism required.

For small-scale business, most operators found that the regulation requiring them to invest a lot of money to hire an engineer and architect to overhaul the existing structure to meet the regulation's safety standards is largely unfeasible. Most operators still rent part of a commercial building and are only able to modify lightweight structures, but are not able to change the building's main structure.

They also do not have sufficient funds due to sluggish post-pandemic incomes.

Instead, Ms Naree suggested a new regulation be drafted to regulate hostels specifically with somewhat looser requirements.

"The uniqueness of hostels is the local experience as we play a significant role in generating income for local businesses nearby, such as restaurants, laundry services and tour companies," said Ms Naree.

She said the government should draft the new regulation before the latest ministerial regulations allowing hostels to enter the system expire in August 2025.

In terms of the performance of hostels this year, she said many foreign tourists have restricted their spending due to concerns over the economy, geopolitical conflicts, and costly international airfares.

Ms Naree said the low season during the second and third quarters was also more severe than expected, while the high season is not robust.

During the fourth quarter of this year and the first quarter of 2025, hostels might be able to gain only 70-80% occupancy.

She said only hostels targeting Asians had recorded a strong performance, unlike those targeting European guests, such as accommodation in Bangkok's Khao San Road area.

Even in major destinations such as Phuket, most hostels still saw low numbers of bookings from young tourists and backpackers, as most foreign tourists in the province came from Russia and the Middle East, and they mostly preferred to stay in hotels.

Ms Naree said many hostels have been shuttered since the pandemic due to a lack of funds. They are unable to register for any subsidy programmes and cannot apply for soft loans because their status is not recognised by the Interior Ministry, which is the body in charge of the Hotel Act.

The Hostel Thailand Association was established last year.