BANGKOK, THAILAND – Fierce clashes along the Cambodian border threatened to derail Thailand’s peak tourism season and inflict heavy economic losses.
High season under pressure
The escalation came at the worst possible moment, in the main travel period from November to February. Border crossings were closed and local residents were evacuated.
“The floods and the fighting are occurring during the high season. That could influence tourists’ travel decisions.”
said Dr. Phiphat Luengnaruemitchai, chief economist at the Kiatnakin Phatra Financial Group.
Trat islands fear wave of cancellations
Border provinces were hit particularly hard, including Trat, home to the popular islands of Koh Chang and Koh Kood, where anxious guests asked about their safety. The US government issued an official travel warning for areas within 50 kilometres of the frontier, a move seen as toxic for booking numbers.
The islands of Trat had been 90 percent booked for December, but operators now faced uncertainty.
“We have to wait until around 20 December to assess the real impact on cancellations,”
said Saksit Mungkarn, adviser to the Tourism Council of Trat.
Billions in tourism revenue at stake
For these islands alone, the Tourism Authority of Thailand (TAT) had forecast 4.89 billion baht in December revenue, around 125 million euros. The economic fallout, however, extended beyond tourism, as Cambodia accounted for 2–3 percent of Thai exports, 70 percent of which had moved through now-closed land borders.
The Kasikorn Research Center estimated that the fighting could drag on economic growth. If the clashes continued until 2026, gross domestic product could shrink by 0.4 percent.
Small businesses brace for heavy losses
Small firms in the northeast, which had stocked up for New Year celebrations, already feared high losses on their goods. Business owners warned that prolonged instability could choke off vital seasonal income in poorer regions.
At the same time, companies in tourism-dependent areas worried that even a brief shock could leave long-lasting financial scars.
Prime minister rejects talks with Cambodia
While the business community pushed for damage control, Prime Minister Anutin Charnvirakul took a hard line. He rejected negotiations with Cambodia and received applause from nationalist groups.
The private sector, by contrast, sounded the alarm as long-planned relief measures for seven border provinces – including tax breaks and tourism stimulus packages – remained frozen due to a cabinet reshuffle and the flood crisis. Industry representatives said they felt abandoned as existential fears in the sector grew.
Long-term image at risk
Observers warned that the greatest danger lay in long-term reputational damage. Thailand had marketed itself for years as a peaceful and safe holiday paradise.
Ongoing clashes at the border, evacuations and foreign travel advisories threatened to dismantle that image and could prompt investors to hesitate before committing funds to affected regions. In the coming weeks, if tensions remained high, the tourism industry risked a disastrous start to the year, with holiday islands that had expected to be full instead facing unexpectedly empty beaches.