Thursday, July 10, 2025
Thailand, the most visited destination in Southeast Asia, is getting ready for the effects from the United States’ latest increase in tariffs. While the destination has been favorites for tourists globally for some time now, such increases in tariffs would have the potential to indirectly lower tourism expenditure, particularly from key markets such as the US, South Korea, and Japan. While the near-term effects due to the tariffs would not amount to much for tourism during the peak season, the longer-term effects might show later next year, says Thai tourism experts.
As many travelers have already booked their trips for the upcoming high season, operators remain optimistic that 2025 will not see a sharp downturn in arrivals. However, the uncertainty surrounding the US’s trade policies and its potential impact on disposable income for tourists could drastically change the landscape for Thailand’s tourism sector in the upcoming year. This is especially concerning as many of Thailand’s competitors, including Vietnam, are heavily investing in new attractions and infrastructure to lure tourists.
Rangsiman Kingkaew, the president of the Tourism Council of Phuket, shared his concerns, stating that the US tariff policies have already shocked the economies of major inbound markets for Thailand, including South Korea and Japan. As both countries are among the top contributors to Thailand’s tourism industry, any reduction in their tourists’ spending habits could lead to a decline in arrivals. While the tariffs were introduced in late 2025, the full effect is expected to be more evident in 2026 when long-haul travelers who have already booked for the high season will begin to feel the pinch.
The Economic Ripple Effect: Tariffs and Reduced Spending
In addition to the immediate concerns surrounding the tourism sector, the larger economic picture also plays a critical role. The US’s ongoing trade tensions with China have led to concerns about increased living expenses and a potential slowdown in spending, not just from US residents, but from other markets as well. These factors contribute to a broader global economic slowdown that is expected to affect tourism in 2025. This economic deceleration is likely to cause some hesitation in spending, with tourists prioritizing more budget-conscious choices.
Kingkaew also highlighted that domestic tourism, a key driver during Thailand’s low season, may face additional challenges. With a 36% tariff rate imposed on Thailand by the US, the country’s overall GDP could see slower growth, further hindering consumer spending within the nation. Additionally, local businesses and the export sector may also feel the effects, contributing to broader economic uncertainty. Although many tourists have already committed to their travel plans for 2025, the aftermath of the tariff hikes will likely contribute to a slower than expected tourism recovery by the following year.
Opportunity Amid Uncertainty: Thailand’s Response to the Challenges
Despite the looming challenges, experts agree that Thailand has a unique opportunity to address weaknesses in its tourism sector. Rangsiman Kingkaew emphasized that the Thai government should seize this time of uncertainty to invest in the country’s tourism infrastructure. Upgrading existing facilities, enhancing safety standards, and launching new attractions could help ensure that Thailand remains a competitive choice for tourists, particularly as neighboring destinations like Vietnam continue to modernize their offerings.
Thailand’s tourism development has been inconsistent in recent years, often relying on its well-established charms and cultural appeal rather than introducing new attractions. To maintain its edge in an increasingly competitive market, the country must prioritize innovation and infrastructure upgrades. Kingkaew stressed the importance of a government-led effort to boost tourism, particularly focusing on infrastructure that supports the growing number of visitors.
Thanapol Cheewarattanaporn, the president of the Association of Thai Travel Agents (ATTA), also pointed out that the government must act swiftly to launch the 350-million-baht chartered flight incentive. This initiative, designed to help boost tourism by encouraging airlines to operate flights to Thailand, has been delayed for too long, leaving operators and travel agents frustrated. He noted that the delay is particularly troubling for markets like China, which have shown significant interest in travel to Thailand, but are hesitant to commit to tour packages due to the uncertainty surrounding the flight incentives.
Facing Competition: Thailand’s Response to Regional Rivals
While Thailand remains a top global tourist destination, it faces increasing competition from its regional rivals. Countries like Vietnam, which have made significant investments in tourism infrastructure and promotion, are steadily gaining ground. Vietnam has been actively expanding its tourist offerings, including the development of new destinations and improved transport links. These efforts have allowed Vietnam to capture the interest of many travelers who might have otherwise chosen Thailand.
For Thailand to maintain its competitive position, the government must take proactive steps to promote its unique cultural experiences and natural beauty. Thanapol Cheewarattanaporn further emphasized that Thailand’s tourism sector is not only battling regional rivals, but also trying to adapt to an increasingly sophisticated global travel market. As travelers become more discerning, they seek more than just popular attractions; they want authentic experiences, better services, and seamless infrastructure.
What the Future Holds for Thailand’s Tourism Sector
In conclusion, while Thailand’s tourism industry is facing challenges from US tariff hikes and global economic uncertainties, the country’s proactive approach to infrastructure development and government incentives will play a crucial role in determining its success in 2025 and beyond. With many tourists still planning their trips to Thailand for next year, it remains to be seen how the effects of the US’s tariff policy will unfold. However, tourism operators remain hopeful that these disruptions can be mitigated with careful planning, investment, and collaboration between the government and private sectors.
Thai tourism has rebounded from economic and political reverses in the past, and the appropriate steps being taken now will enable it to continue thriving down the road. By building more effective infrastructure, more points of interest, and stricter security measures, the potential for Thailand to transform will enable it to remain near the top of the list of where to go even as global conditions change.
