The land and building tax is continuing to force outdated and less competitive offices, apartments and hotels to exit the market, with many putting their assets up for sale or lease in the tourism sector.

Wutthiphon Taworntawat, managing director of commercial property developer UHG, said the tax still influences landlords' decisions to lease out their properties, particularly older hotels and apartment buildings.

"The tax is calculated based on the appraised value of land and buildings, which has significantly increased costs for some landlords compared to the period before it took effect," he said.

While some landlords choose to renovate their properties to boost income, many do not. Owners of older apartments in particular are often reluctant to invest in upgrades, even if they could generate higher returns, said Mr Wutthiphon.

Similarly, small-scale hotel owners with just one or two properties often opt to exit the market, as their limited scale makes operations unviable.

Meanwhile, office landlords with less competitive assets face challenges attracting tenants in an oversupplied market, where newer developments offer more competitive rates.

"We are in discussions with three landlords of outdated offices, apartments and hotels in city fringe areas who are interested in leasing their properties on 30-year terms," Mr Wutthiphon said. "We plan to renovate these assets into hotels."

Phattarachai Taweewong, research and communications director at property consultant Colliers Thailand, said hotel owners who exited the market saw that a strong tourism recovery had pushed hotel prices higher, making it the best time to sell for maximum return.

"Selling now helps to avoid renovation costs and investment risks," he said. "It also reflects a shift in mindset. Owners now see hotels not just as long-term income sources but as assets to be actively managed and reallocated."

He added that there are many hotels -- particularly in Bangkok, Pattaya, Chiang Mai and Hua Hin -- which have been operating for years and now need major renovations, which could lead to sales amid the booming tourism sector.

"The land and building tax could trigger more asset transfers or repurposing this year, as it is a fixed cost that owners must bear, regardless of whether or not the property generates income," he said.

Large assets in inner-city locations taxed at commercial rates face mounting pressure.

Without adequate income or improvement plans, yields fall and long-term ownership becomes less viable, particularly amid rising costs and tougher competition from higher-standard new supply, Mr Phattarachai added.

Surachet Kongcheep, head of research and consultancy at property consultant Cushman & Wakefield Thailand, said many hotel owners who have weathered multiple crises may no longer want to continue in this business, especially if recent income has met their investment goals.

In several cases, when offered a price they are satisfied with, owners have decided to sell. This trend has picked up in recent years, particularly after the pandemic, as many struggled with financial difficulties during the downturn.

"Thailand has faced numerous crises over the past 20–30 years. Hotels are among the hardest-hit sectors, making it difficult for room rates in Thailand to rise significantly," Mr Surachet said.

Just as the sector starts to recover with rising demand, political uncertainty often strikes, disrupting tourism.

Owners then find themselves starting over repeatedly, which can wear down their long-term motivation.