This downturn is attributed to a mix of falling international tourist arrivals, lower occupancy rates, and a reduction in income from additional services, according to a recent report cited by The Nation.
The number of international visitors is expected to decline by 9% in 2025, reaching around 32.2 million.
The average length of stay for foreign visitors is predicted to decrease.
During the first seven months of 2025, the nationwide hotel room occupancy rate stood at 71.66%, a 0.2 percentage points decrease compared to the previous year.
 |
|
A hotel and bungalow on Koh Yao Yai island in Thailand. Photo by AFP |
The full-year occupancy rate is anticipated to drop by 2.3 percentage points, to approximately 69.83%.
Average room rates are also expected to fall by 4% for the year, following a 5% decrease in the first seven months.
Revenue from meetings and seminars has declined, due to fewer international events and concerts compared to last year.
In the first half, both domestic and international meetings and seminars saw a 13% decrease.
Another concern is rising costs. Hotel operators are facing increased operational costs, particularly due to rising labor wages.
The sluggish tourism market and fierce competition add on to their financial struggles.
Kasikorn Research Centre said that certain hotel groups are more vulnerable than others.
Those dependent on international tourists in major destinations like Bangkok, Chon Buri, Songkhla, and Chiang Mai, particularly those catering to visitors from East Asia, are likely to face more severe impact due to the abundance of available rooms.
Hotels in border areas, such as Sa Kaeo and Ubon Ratchathani, will be affected by tensions along the Thai-Cambodian border.
But some provinces are expected to continue growing, particularly those that attract domestic tourists, such as Kanchanaburi, Phang Nga, Nakhon Si Thammarat, Nakhon Ratchasima, and Nakhon Phanom.
The report said that it is increasingly essential for hotels to shift to a more “sustainable business model.”
This would enable them to meet the rising expectations of environmentally conscious clients and business partners, while also reducing their environmental impact and carbon footprint.
The government is making moves to boost tourism demand.
The Ministry of Tourism and Sports intends to distribute free domestic flight tickets to 200,000 foreign visitors in an effort to boost tourism across the country over a three-month span, according to Bangkok Post.
The ministry anticipates that this initiative will generate THB8.8 billion (US$273 million) in revenue from a budget of THB700 million, though it still requires cabinet approval.
As of August 17, Thailand has welcomed 20.8 million foreign tourists this year, marking a 7% year-on-year decrease. The largest source market was China, with 2.9 million arrivals.
