Tourism revival goes into reverse

Bangkok Post

20-07-2025

Over the past three years, Thai tourism has been struggling to regain the peak it once reached prior to the pandemic, while neighbouring countries Malaysia and Vietnam have already surpassed their performance in 2019, recording 37 million and 17 million tourist arrivals, respectively.
The closest opportunity occurred in 2024 when Thailand welcomed 35.5 million foreign tourists, an increase of 26% year-on-year.
However, repeating the success of 2019 when 39.9 million foreign tourists arrived and spending hit 1.9 trillion baht is unlikely to occur in 2025, given that Thailand only attracted 16.6 million foreign arrivals in the first half, dipping 4.6% year-on-year.
The Tourism Authority of Thailand (TAT) is scheduled to unveil its marketing direction for 2026 today under the "Healing is a new Luxury" theme, as well as the 2026 target for the international market, which is expected to be only 1.63 trillion baht from 36 million visitors, while targeting 214 million domestic trips, generating 1.17 trillion baht.
Even if Thailand was actually able to achieve the revenue goal of 2.8 trillion baht next year, there is still a long way to reach the 3 trillion baht earned in 2019.
ARDUOUS TASK
During the pandemic, Thailand saw a sharp plunge from 39.9 million tourists in 2019 to just 427,000 in 2021, a decrease of approximately 93 times.
A modest rebound just began in the second half of 2022 after the government lifted entry restrictions on July 1, including the Thailand Pass registration and mandatory health insurance.
Signs of hope became more evident in 2023, when the country experienced an unexpected surge to 28 million tourists, up from only 11 million in 2022. This growth was largely driven by the reopening of China's borders in January 2023.
At the time, the TAT anticipated a smooth path to full recovery, fuelled by pent-up demand across global markets.
However, a closer look in 2024 revealed that the Chinese market, which accounted for 25% of total visitors in 2019, had been recovering slowly.
Its visitors to Thailand might appear to have grown impressively, doubling from 3.5 million in 2023 to 6.73 million in 2024, but the growth trend weakened significantly toward the end of the year.
A staggering 453.7% increase in January 2024 dwindled to just 25.6% in December, despite it being the high season.
In the first half of this year, the crisis in the Chinese market has become more apparent, with only 2.26 million arrivals, a 34% year-on-year decline.
While the sluggish Chinese economy has been a contributing factor over the past two years, it alone cannot explain the downturn as other countries have continued to attract large amounts of Chinese travellers.
Vietnam saw a 144% increase to 2.7 million in the first six months of this year, while Japan recorded a 62.9% rise to 3.92 million.
Yuthasak Supasorn, former governor of the TAT, said that the market downturn in the past few years mostly stemmed from Asian travellers, particularly Chinese, which saw the daily average drop by half, from 21,380 in January 2025 to an average of 12,000 daily visitors in the first six months.
He said that if this trend persists in the second half, Thailand might have only 4-5 million Chinese visitors in 2025, which will be the first time in 12 years that the number has fallen below the 5-million benchmark, excluding the Covid-19 lockdown period.
CHRONIC ILLNESS
The main obstacles to the goal of 40 million tourists have been mostly attributed to prolonged internal factors, particularly safety issues, which were like a chronic illness, said Mr Yuthasak.
Every tragic incident in the past always led to a dramatic drop in the Chinese market, including the Erawan shrine bombing in 2015 and the deadly boat accident in Phuket in 2018.
This year, the abduction of the Chinese actor Wang Xing from Thailand, plus the collapse of the 30-storey building intended to house the State Audit Office on March 28, were the final nails in the coffin, which led to a drastic fall of inbound Chinese.
According to the latest Chinese Traveller Sentiment Report by Dragon Trail International in April, the safety perception of Thailand has plunged to 19%, from 26% in September 2024.
These concerns were echoed by the World Economic Forum's Travel & Tourism Development Index (TTDI) 2024, in which Thailand's ranking in the travel and tourism socioeconomic impact section plunged to 106, while the safety and security index ranking nosedived from 86 to 102, stemming from low confidence in local police and in safety walking alone at night.
Mr Yuthasak said it will be difficult for Thailand to return to the glory days if does not seriously tackle these problems.
"Thailand has been resilient in every crisis. But the current situation is different as we've lost the ability to adapt to changes and cannot solve the ongoing decline in confidence," he said.
He said the only way Thailand can reach 40 million annual arrivals is by having the same Chinese market volumes as in 2019.
INADEQUATE COMPENSATION
Mr Yuthasak, who was in charge during the peak period in 2019 and the rock-bottom period in 2021, said that even though Thailand could compensate for the lack of the Chinese market and gain a large volume, the remaining question is about revenue, noting that it would be hard to match the 1.9 trillion baht recorded in 2019.
He said the Malaysian market surged to No.1 for Thailand in the first half, but their spending power is questionable.
In terms of revenue, Malaysians spent 21,450 baht during a stay of 4.17 days on average, while Chinese travellers spent 42,428 baht during their 7.35-day tour.
"Every single Chinese tourist we lose means we must fill the revenue gap with two Malaysian tourists, which might not be practical, considering the stark contrast between a population of 35 million in Malaysia and 1.4 billion in China," said Mr Yuthasak.
To fix the income gap, TAT this year also put more focus on European travellers, whose spending per head is twice as high as the Chinese.
Suksit Suvunditkul, president of the southern chapter of the Thai Hotels Association, said the long-haul markets in the last high season were extremely robust, as they helped push up average room rates in four- and five-star hotels in Phuket to a record high.
However, the situation was a stark contrast entering the low season, as the island experienced a quieter period than the same time in 2023–24.
In June 2025, Mr Suksit said the occupancy rate in Phuket stood at 59%, down from 72% in the corresponding period in 2024 and about the same level as in 2023, but the average room rate was recorded at only 2,394 baht, trailing behind 2,746 baht in 2024 and 2,617 baht in 2023.
"The situation in this low season is more severe than those of the past few years. Hotels that still perform well are those that can target Indian and Middle East markets," he said.
Mr Yuthasak said Thailand not only lost market share due to poor tourist safety, but its old charm as an affordable destination was no longer attracting tourists due to soaring living costs.
According to the 2024 TTDI, Thailand's price competitiveness sits at 48th, dropping by three spots from the previous survey.
This is obviously against the travel trend on the mainland, where Qióngyóu (budget travel) has been trending among travellers seeking the best value for money trips.
Mr Yuthasak suggested Thailand use this crisis to change from a "More for Less" to a "Less for More" approach by setting a revenue target based on appropriate arrival numbers that match carrying capacity and can ensure quality tourism experiences.
"Optimisation for maximum economic impacts is the key to solving this crisis. This new direction might need 2-3 years to achieve, but Thailand still has potential due to its strong foundations in tourism and services," he said.