BANGKOK, THAILAND – A sharp fall in arrivals and surging fuel costs showed how the Iran war reverberated through Thailand’s tourism‑dependent economy.
In March 2026, 2.77 million tourists came to Thailand, 15 percent fewer than in February. In the week after Songkran, traditionally one of the strongest travel weeks of the year, authorities recorded only 464,720 foreign arrivals. Economists at Bank of America described it as the third-weakest week since early 2024. The slump was linked not to weather or waning interest, but to a war being fought thousands of kilometres away.
The Iran conflict put simultaneous pressure on Thai tourism and the domestic economy. More expensive flights hit demand, while soaring energy prices raised costs across sectors. Analysts warned that Thailand was being squeezed from both sides by the fallout in the Persian Gulf.
Why Thailand was hit harder by the Gulf conflict
Thailand was the most tourism‑dependent economy in Asia. According to the World Travel and Tourism Council, the sector contributed around 10 to 12 percent of gross domestic product, more than in any other Asian country. In 2025, nearly 33 million foreign visitors travelled to Thailand. More than one in five came from Europe or the Middle East, precisely the regions most disrupted by the war in Iran.
At the same time, Thailand imported a large share of its energy needs from the Middle East. According to J.P. Morgan, net imports of oil and gas accounted for about seven percent of Thai GDP. When the Strait of Hormuz was blocked by the conflict and crude prices rose, Thailand faced falling tourism revenues and rising energy costs at once.
Koh Samui’s empty beaches and halved bookings
The Tourism Ministry had already quantified the situation. Deputy secretary Natthriya Thaweevong estimated that, if the war lasted more than six months, Thailand would see three million fewer visitors than originally planned. The economic loss would be around 4.6 billion US dollars, or about ten percent of the previous year’s total foreign tourism receipts. The government’s ambitious goal of attracting 35 million foreign visitors in 2026 would be difficult to maintain, making a level similar to 2023, with roughly 28 million guests, more realistic.
The decline was particularly visible on Koh Samui. Bookings there fell by around 50 percent, according to the newspaper Khaosod, citing industry representatives. International flights became significantly more expensive, with ticket prices on some routes nearly doubling at times. Ratchaporn Poolsawat, vice president of the Tourism Association of Thailand, said the shock mainly affected price‑sensitive travellers, the very clientele that had filled destinations like Koh Samui for decades.
“Price-sensitive travellers are being hit the hardest – exactly the guests who have filled places like Koh Samui for decades.”
said Ratchaporn Poolsawat, vice president of the Tourism Association of Thailand.
Travellers planning a trip to Koh Samui were advised to check the current booking situation carefully. The shift in demand was reshaping occupancy patterns on one of Thailand’s flagship islands.
Costly fuel, idle boats and fewer taxis
Rising fuel prices affected not only holidaymakers and airlines. The diesel price alone increased by six baht per litre in March, reaching nearly 40 baht per litre at the pump, roughly one euro. For fuel‑intensive sectors, this posed a serious problem. According to an ARD report, about half of Thailand’s fishers had halted operations.
A single boat fleet consumed more than 30,000 litres of fuel, leaving no room for profit. Thailand was among the world’s largest exporters of seafood. The impact on supply chains and prices was already becoming visible in domestic and export markets.
In Bangkok, the crisis surfaced in unexpected ways. At Suvarnabhumi airport, only around 2,500 taxis were operating instead of the usual 6,000. Many drivers avoided long-distance trips because higher fuel costs made them unprofitable. Passengers arriving late at night in need of a taxi felt the shortage directly.
Calculations by Bloomberg suggested that a war lasting longer than three months could halve Thailand’s economic growth. The estimate underscored how closely the country’s outlook was tied to developments far beyond its borders.
How the government responded – and who it targeted
The Tourism Authority of Thailand, TAT, set up an internal monitoring unit described simply as a “War Room”. From there, staff tracked booking trends, flight capacity and fuel prices on a daily basis. In parallel, the government prepared a series of measures. Tax incentives for tourism spending were planned to stimulate the domestic market, while lower tax rates and deferred payments were discussed for hotel operators.
Fuel rationing was also being considered to ensure that coach operators received enough supply. The aim was to keep the core of Thailand’s tourism infrastructure functioning despite rising costs. Policymakers tried to cushion the blow without abandoning fiscal constraints entirely.
Strategically, the government turned to a target group less deterred by the war and with higher spending power than the average European tourist: wealthy travellers from the Middle East. According to government data analysed by Bloomberg, they spent an average of 2,500 US dollars per trip, compared with around 1,800 dollars for Europeans and 1,200 dollars for Asian tourists. The goal was to attract at least 200,000 visitors from the region.
For a country that had long pursued volume growth in tourism, this marked a strategic shift. The focus was moving away from sheer numbers towards a more affluent niche, in the hope of stabilising revenues even if overall arrivals remained below previous peaks.
Short-term shock or lasting change?
Torsten Schäfer of the German Travel Association took a pragmatic view of the broader picture.
“Historically, tourism has proved to be a crisis-resistant industry: as soon as stability returns, the desire to travel comes back as well.”
said Torsten Schäfer, spokesperson for the German Travel Association.
He considered catch‑up effects more likely than a permanent decline, provided the geopolitical situation did not escalate further. The assessment sounded reassuring, but the article noted that this was only part of the story.
Even if bookings recovered after a ceasefire, two structural problems would remain. High energy prices could intensify if the war dragged on, according to economists. The aviation market, especially around Gulf hubs, would also need months to normalise capacity and fares after any easing of tensions.
For Thailand, which had already lost economic room for manoeuvre due to falling Chinese visitor numbers and weak GDP growth, the timing could hardly have been worse. The combination of external shocks left limited space for policy missteps.
What it meant for long-term residents in Thailand
People living in Thailand felt the effects in everyday life. Petrol became more expensive, and food prices rose due to higher transport costs, while taxis became scarcer. Regular travellers to Europe were advised to secure return flights early, as airlines’ fuel hedge contracts were gradually expiring.
The full increase in jet fuel prices might not be fully reflected in ticket prices until autumn and winter. Long‑term residents were also encouraged to clarify visa issues around exits and re‑entries well in advance, while flight schedules remained relatively predictable. Planning ahead was becoming part of daily life for expatriates.
For Phuket, Bangkok and other tourism‑heavy centres, the season was described as damaged but not lost. Hotels were open, beaches remained, and the country continued to function. Those who came or stayed found fewer crowds and service providers eager for every guest.
The outlook ultimately depended on how long the Strait of Hormuz remained blocked. Until the situation in the Gulf eased, Thailand’s tourism sector and broader economy were likely to stay exposed to shocks beyond their control.
Editorial notes stated that the information reflected the situation as of April 2026. Developments in the Middle East and their impact on airfares, fuel costs and tourism statistics were changing constantly, and economic projections by J.P. Morgan and Bloomberg were based on scenarios rather than guarantees. Travellers were urged to consult their foreign ministries and airlines before booking.