Thailand tourism industry remains a vital pillar of the country’s economy and cultural identity, but it now faces growing challenges amid rising competition in Southeast Asia. Known for its stunning beaches, vibrant cities, rich cultural heritage, and renowned hospitality, Thailand has long been a top global destination for travelers. The tourism sector contributes roughly 20% to the nation’s GDP and supports millions of jobs across hospitality, transportation, retail, and other service industries. However, recent trends show that Thailand’s tourism recovery has slowed, especially compared to fast-growing neighbors like Vietnam.
Before the COVID-19 pandemic, Thailand regularly welcomed more than 30 million foreign visitors annually, placing it among the world’s most visited countries. Key source markets for tourists included China, India, the United States, Japan, and European countries. The pandemic severely disrupted international travel in 2020 and 2021, causing a steep drop in arrivals that deeply affected Thailand’s economy. While recovery efforts have been underway, Thailand’s tourism growth is still lagging behind some of its regional competitors.
In early 2025, Thailand’s Finance Ministry lowered its tourism forecast for the year from 38.5 million to 36.5 million visitors, signaling caution about the sector’s pace of recovery. In March 2025, Thailand welcomed approximately 2.7 million foreign tourists, a figure still 20% below March 2019’s pre-pandemic levels. This slow rebound contrasts sharply with Vietnam’s rapid growth, where visitor numbers increased by 40% compared to the same period in 2019. Vietnam’s success is attributed to several factors that have made it increasingly attractive to tourists and travel businesses alike.
One major advantage Vietnam holds over Thailand is its lower overall costs. Hotels, meals, and tourist services in Vietnam tend to be more affordable, which appeals to budget-conscious travelers and families. The country has invested heavily in new family-friendly resorts and theme parks that offer competitive prices without sacrificing quality. Additionally, Vietnam’s government actively supports the tourism sector by providing subsidies for air travel and offering reduced airport landing fees, making it easier and cheaper for international travel agents to book flights to Vietnamese cities. Popular tourist destinations like Nha Trang benefit from this support, drawing tourists away from Thai beach resorts such as Phuket.
Transportation infrastructure is another area where Vietnam outperforms Thailand. Many of Vietnam’s major airports, including those in Ho Chi Minh City and Da Nang, are located just 30 to 45 minutes from key tourist attractions. In Thailand, major airports such as Bangkok’s Suvarnabhumi Airport require travelers to endure longer journeys by car—often exceeding three hours—to reach popular tourist areas like Hua Hin or Kanchanaburi. This inconvenience can discourage visitors seeking quick and easy access to vacation spots.
Thai tourism officials have expressed concern about these competitive disadvantages. Thanet Supornsahasrungsi, President of the Chon Buri Tourism Federation, warned that Vietnam may overtake Thailand as the region’s top tourism destination within two to three years if current trends persist. He emphasized the need for the Thai government to urgently improve its tourism strategy, including enhancing safety for tourists and streamlining travel logistics.
The drop in Chinese tourists is a particular concern for Thailand’s tourism industry. Many Chinese travelers who once favored Thailand are now opting for Vietnam and other emerging destinations. Sanga Ruangwattanakul, President of the Khao San Road Business Association, highlighted this shift and the risk it poses to Bangkok’s tourism numbers in 2025. To address this challenge, the Association of Thai Travel Agents (ATTA) has submitted a proposal seeking a subsidy of 320 million baht (about US$9.7 million) from the Tourism Authority of Thailand and the government. The subsidy aims to encourage travel companies to bring more Chinese tourists to Thailand by offering financial support for flights that meet a minimum number of passengers. ATTA estimates that attracting 150,000 Chinese tourists could generate at least 8.3 billion baht in tourism revenue, based on average spending per visitor.
The Thailand tourism industry is also focusing on longer-term improvements. Officials recognize the need to improve transport infrastructure, reduce travel times to popular destinations, and develop competitive travel packages. Sustainable tourism practices and quality enhancements are becoming priorities to protect Thailand’s natural beauty while improving the visitor experience.
Despite these efforts, the rapid rise of Vietnam as a tourism hotspot serves as a wake-up call. Without swift and effective action, Thailand risks losing its traditional leadership position in Southeast Asian tourism to a competitor that offers lower prices, better infrastructure, and stronger government support for travel businesses. The evolving landscape demands that Thailand innovate and adapt to maintain its appeal in an increasingly competitive market.
