Thailand’s tourism sector continued to show signs of strain in the second quarter of 2025, as the Tourism Council of Thailand (TCT) reported a sharp year-on-year drop in its tourism confidence index. The decline is attributed to persistent safety concerns, subdued spending among tourists, and broader economic uncertainties, including the United States’ recent implementation of a reciprocal tariff policy.
According to the TCT, the tourism confidence index for the April–June period stood at 70, significantly below the pre-pandemic benchmark of 100. The figure also marked a decline from 79 recorded during the same period in 2024 and from 83 in the first quarter of 2025.
TCT president Chai Arunanondchai stated that the industry is now grappling with greater challenges than in the previous year, citing a combination of geopolitical instability and economic slowdown. Notably, the kidnapping of a Chinese actor into a border scam centre in Myanmar and the March 28 earthquake contributed to a more than 50% decline in the Chinese-speaking tourist segment.
Based on its latest forecast, the TCT expects Thailand to welcome only 33.3 million foreign visitors in 2025—fewer than in 2024—generating around 1.75 trillion baht in revenue. These figures represent a significant setback for one of Southeast Asia’s most tourism-dependent economies.
Global economic growth is also forecast to slow, reaching its lowest level in 16 years. Much of this is attributed to trade tensions and tariff policies, particularly those initiated by the United States. Such factors are prompting tourists to prioritise travel to closer or less expensive destinations, adding further pressure to long-haul markets such as Thailand.
Domestically, tensions along the Thailand-Cambodia border are raising concerns about the viability of tourism in several provinces, especially during the low season. Meanwhile, persistent high household debt levels among Thai citizens are likely to suppress local tourism spending.
Confidence levels declined across all six regions surveyed by the TCT. However, the Eastern and Western regions performed relatively better, with indexes of 78 and 73 respectively, buoyed by their proximity to Bangkok and continued appeal to short-term domestic travelers.
In sector-specific findings, the entertainment industry experienced the steepest drop in confidence, registering an index of just 60, compared with 73 in the second quarter of last year. Overall, businesses reported having recovered just 45% of their 2019 revenue levels.
Hotel performance also softened, with average occupancy rates falling to 48%, down from 55% during the same period in 2024. While labour shortages are not yet a critical concern, the TCT warned that widespread closures could trigger workforce challenges in the future. In the second quarter, 94% of businesses remained operational—down slightly from 97% in the first quarter.
Looking ahead, the TCT anticipates the tourism confidence index could decline further to 65 in the third quarter of the year. In response to the downward trend, the council has called on the Tourism Authority of Thailand to consider launching a subsidy programme to support bus operators and encourage domestic travel.