Thailand’s travel and tourism sector has long been a cornerstone of national economic growth; it’s estimated that as an industry, it contributes around 12% of the Kingdom’s GDP, and over 20% of total employment.
But as we enter the second half of 2025, the numbers are sounding the alarm. From January to June, Thailand welcomed 16.61 million foreign tourists, a 4.56% decline compared to the same period last year. The Bank of Thailand has since downgraded its forecast from 37.5 million to 35 million visitors for the year, which is still well short of the pre-COVID peak of nearly 40 million in 2019.
The downturn isn’t just about fewer flights or slower footfall. It reveals deeper, systemic challenges that travel, tourism, and hospitality businesses in Thailand must confront.
A Slowing Chinese Recovery
While Malaysia remains the top source market, Chinese arrivals (2.25 million) remain far below pre-pandemic levels. Economic uncertainties, domestic travel incentives in China, and geopolitical factors all contribute to this underperformance.
This could spell trouble for businesses that banked on high-spending Chinese tour groups, because the shift is more than seasonal; it’s structural. The reliance on regional tourists, especially from Malaysia and China, exposes Thai tourism to concentrated risk. When one or two major markets underperform, the impact is outsized.
Perception vs. Reality
Thailand continues to enjoy strong global brand recognition as a travel destination. However, inconsistent messaging, political uncertainty, and recent infrastructure strains (from airport congestion to urban overcrowding) can damage the visitor experience, and with it, the country’s reputation.
What a visitor reads online may no longer match what they experience in person, and in the digital age, reviews and perception shift fast.
The Missing Middle Class Traveller
Global inflation and the rising cost of travel are squeezing mid-tier tourists. The ultra-wealthy still travel, and budget backpackers find workarounds, but the “mass affluent” segment, often responsible for consistent, high-margin bookings, is hesitating.
The slowdown in tourism is hitting mid-range hotels, restaurants, and tour operators the hardest, but the ripple effects extend much further. As a key driver of Thailand’s economy, tourism influences various sectors, including F&B, retail, logistics, and real estate. The central bank’s report on softened economic activity in May highlights just how deeply tourism is woven into the country’s financial fabric.
In short, fewer tourists isn’t just a PR problem—it’s a wake-up call.
If Thailand is to regain its competitive edge, brands, businesses, and policymakers alike must stop waiting for recovery and start responding with clarity, creativity, and resilience. Read on to our next article to learn more about the potential opportunities brands have to survive and thrive in a challenging travel market.