Thailand’s tourism industry is facing tough times

Thailand’s tourism sector, long considered a key driver of the Thai economy, has issued a dire warning to the government. They argue that if quick and effective steps are not taken, the Land of Smiles risks losing its appeal as a must-see destination, becoming simply “another choice among many”.

Last week, a rare alliance was formed between five of Thailand’s tourism associations: the Tourism Council of Thailand (TCT), the Association of Thai Travel Agents (ATTA), the Association of Thai Travel Agents (TTAA), the Thai Hotels Association (THA), and the Airline of Thailand (AAT). During a private meeting with Prime Minister Anutin Charnvirkul, they presented a two-pronged emergency plan that includes short-term support measures and a long-term strategy aimed at future-proofing the industry.

The urgency is fueled by the relevant figures. While a strong post-pandemic recovery was initially seen, forecasts now indicate a potential 7% drop in international tourist arrivals for 2025 compared to 2024. Asia and major Asian markets are showing signs of slowing down, and viral events on social media, from tourism scams to safety concerns, are reinforcing negative sentiments stronger than countering marketing initiatives.

A five-point action plan

The Union’s immediate priorities are sharply defined:

1. A global campaign for safety and confidence – a significant, coordinated effort to restore confidence, especially in markets affected by major events.
2. Aggressive incentives for air travel – subsidies for airline seats, route subsidy expansion, and marketing cooperation agreements with airlines for both international and domestic routes.
3. Targeted tax relief measures – temporary reductions or exemptions from VAT on hotels, tours, and domestic flights to make travel more affordable and stimulate demand.
4. Proactive Crisis Communication Management – ​​Creating a rapid response unit to address negative social media coverage in hours, not days.
5. Enhancing enforcement on the ground – Increased efforts to combat fraud, overcharging, and harassment of tourists, which are spreading rapidly online.

Security emerged as a central issue. As one union leader noted, “A 15-second video showing a tourist cheating in Phuket can damage a decade’s worth of ‘Amazing Thailand’ advertising.”

Long-Term Recovery: Six Strategic Pillars

Beyond immediate interventions, the industry has proposed a comprehensive modernization agenda for consideration by the proposed National Tourism Council:

• A complete overhaul of Thailand’s outdated tourism regulations and bureaucratic procedures
• Improving service and quality standards across the country (especially beyond major tourist hubs such as Bangkok, Phuket, and Chiang Mai)
• Substantial investment in infrastructure in smaller cities and provinces
• Developing innovative, high-end, and premium tourism products to compete with places like Vietnam, Indonesia, and Japan
• For the next decade, a comprehensive renaissance of “Thailand” is underway, shifting the focus beyond beaches and temples to develop the country as a diverse, high-value destination.
• Applying realistic and enforceable sustainability standards to protect natural and cultural assets, which are key attractions for tourists

These radical changes, the union cautions, are necessary to prevent Thailand from losing ground to more competitors.

The Prime Minister’s response

Anutin Charnvirkul expressed enthusiasm, referring to Thailand’s tourism as the “lifeblood of our economy” and promising immediate action. He emphasized the positive momentum resulting from his recent visit to China, where government-level talks have led to direct agreements between airlines and tour operators, which could help secure a surge in Chinese tourists over the next few years. A possible state visit by the Chinese premier could cement a landmark bilateral tourism deal, which may represent a significant development since the visa waiver was put in place before the pandemic.

However, industry leaders left the meeting feeling more cautious optimism than real certainty. A participating executive said, “Words are appreciated, but we have heard promises before. We need funds and campaigns have started before Songkran.” Thailand welcomes nearly 36 million visitors in 2024, remaining the world’s top destination. However, the warning lights are really bright: Vietnam (exceeding pre-epidemic numbers), Indonesia (growing to “10 new Balis”), and Japan (experiencing a tourism boom alongside better infrastructure) are growing rapidly.

Thailand, for many years, has relied on natural attractions, warmth and exceptionally low prices. This formula is not so effective now, in an era where travelers prioritize safety, authentic experiences, sustainability – and where a negative TikTok video can quickly reduce hotel bookings.

The next half year will likely determine whether Thailand begins a significant resurgence or a slow decline in Southeast Asian destinations. As industry representatives made clear to the Prime Minister, this is not just a routine cut. It represents a moment of existence, of definition.

The Land of Smiles holds all the essentials for a stay ahead – the beaches, vibrant culture, food and people are truly unmatched. The real question revolves around whether decision-makers have the necessary urgency and political will to preserve a vital asset that has generated significant profits over the years.