US joins forces with China, South Korea, India contributes to Thailand’s struggling tourism sector in 2025 as global economic challenges and changing travel trends impact arrivals: New update

Posted on November 3, 2025

In 2025, Thailand’s tourism industry faces major setbacks, with major markets such as the United States, China, South Korea and India seeing sharp declines in visitor numbers. This downturn can be attributed to a range of global economic challenges, including rising inflation and geopolitical instability, which have made travelers more cautious about international travel. In addition, changing travel preferences, such as growing demand for more sustainable and affordable destinations, have led many tourists to reconsider traditional hotspots like Thailand. As these four major source countries reduce travel, Thailand’s tourism sector is struggling to recover, highlighting the broader impact of global economic turmoil and evolving traveler behaviours.

While the total number of arrivals remains significant, this figure is below government expectations and well below the 28.15 million visitors recorded in 2024. The slowdown in visitor numbers points to a deeper problem, exacerbated by a series of economic and geopolitical challenges that have shaken the global travel landscape.

Convergence challenges

Thailand’s tourism industry, a major contributor to the country’s economy, is currently facing a mix of external pressures. The lingering effects of the Covid-19 pandemic have left long-lasting scars on the global travel sector, and its effects are still being felt in Thailand. But it is not just the pandemic, other factors such as the global economic slowdown, inflation and increasing geopolitical instability have all led to a shift in travel behaviours.

Tourists are now more selective about where they travel, with many prioritizing destinations that offer better affordability and safety. These changing preferences, combined with rising costs of international travel, have caused a decline in demand from key markets such as the US, South Korea and India. This transformation has posed major challenges for Thailand, which has relied heavily on foreign tourism as a pillar of its economy.

Shifts in visitor sources and travel trends

Among Thailand’s traditional markets, Malaysia remains a consistent source of visitors, contributing 3.8 million travelers this year. The cultural and geographical proximity between the two countries helps maintain this strong relationship. China, another major market for Thailand, saw 3.72 million arrivals, boosted by the Golden Week holiday. However, despite these positive signs, the overall picture is far from encouraging.

Visitor numbers from larger, more profitable markets have remained stagnant or declining. For example, travelers in the United States have been deterred by high airfare costs and competing destinations closer to home, such as Japan and Singapore. This trend, exacerbated by shifting preferences toward regional travel, has hurt Thailand’s ability to attract high-spending tourists, a demographic vital to the country’s tourism industry.

Bank of Thailand reviews tourism forecast

In response to these challenges, the Bank of Thailand (BoT) recently revised its tourism forecast for 2025, lowering expectations from 35 million to 33 million visitors. This downward revision highlights the difficult reality of the tourism sector’s recovery. Factors such as a weak baht, although beneficial to exporters, make Thailand less attractive to budget-conscious tourists. In addition, delays in hotel construction due to ongoing disruptions to the global supply chain have prevented Thailand from increasing its accommodation capacity at a time when it is needed most.

These revised forecasts reflect a broader recognition that Thailand’s pre-pandemic tourism levels, which peaked at 39.8 million visitors in 2019, are unlikely to return anytime soon. Bank of Commerce’s revised figures point to a slower and longer-term recovery as external pressures continue to hamper sector growth.

Economic impact on local businesses and workforce

The effects of the tourism slowdown are not limited to international arrivals, but extend to the local economy. Tourism contributes about 12% of Thailand’s GDP, and any decline in the number of foreign visitors has a ripple effect on various industries. From small street vendors in crowded markets to luxury resorts on tropical islands, businesses that rely on tourism are facing difficulties.

Hotel occupancy rates fell to just 65% in the third quarter of 2025, meaning many rooms will remain empty, and staff left out of work. This has been particularly difficult for communities whose main source of income is tourism, especially rural areas that depend on service sector jobs. With the decline in the number of visiting tourists, these areas face great economic difficulties because they depend on the influx of visitors to support local economies.

Shifting focus: quality tourism and sustainable growth

In response to these challenges, the Thai Ministry of Tourism is shifting its focus from mass tourism to a model centered around quality tourism. The goal is to attract fewer but more affluent visitors who are likely to spend more during their stay. This strategy includes offering visa incentives, promoting upscale eco-resorts, and emphasizing Thailand’s cultural and health offerings.

At the same time, the government has also pushed to improve infrastructure, such as building a high-speed rail system, designed to ease travel congestion and improve connectivity across the country. However, these initiatives have not yet achieved the desired effects, and the ambitious goal of reaching 40 million visitors appears increasingly difficult to achieve.

Diversifying tourism offers in Thailand

In the face of these challenges, Thailand must also consider diversifying its tourism model. While its world-famous beaches will continue to attract tourists, expansion into other areas such as medical tourism, cultural tourism and eco-tourism can help the country tap into new markets. These emerging sectors align with the growing demand for sustainable and meaningful travel experiences.

The country’s natural beauty remains a key selling point, and protecting this resource through green investments will be crucial in maintaining Thailand’s appeal to environmentally conscious travellers. However, addressing concerns such as environmental degradation, overtourism in places like Maya Bay, and pollution will be key to preserving the country’s tourism future.

Conclusion: long road to recovery

Thailand’s tourism industry finds itself at a crossroads in 2025. While the country’s appeal as a tourist destination remains strong, the sector faces significant hurdles. The global economic slowdown, changing travel trends, and environmental challenges represent obstacles that Thailand’s tourism industry must overcome.

Achieving pre-pandemic tourism levels appears increasingly unlikely, and the road to recovery is likely to be long and full of obstacles. However, with strategic investments in sustainable tourism, infrastructure and new tourism models, Thailand may be able to adapt to these changing conditions and continue to attract international visitors. The country’s ability to evolve in response to these challenges will determine the future of the tourism industry and its broader economic recovery.