BANGKOK, THAILAND – The escalation in the Middle East has sent shockwaves through Thailand’s tourism sector, surprising even seasoned industry observers.
No Asian economy relies as heavily on tourism as Thailand – roughly 12 percent of GDP comes from the sector. New figures show an abrupt decline that began in March and accelerated in April.
This article analyzes the current crisis, its causes, and the measures the Thai government is attempting to counter it. It is based on data from Bank of America, reports from Bloomberg, and statements from government officials and industry experts.
Post-Songkran Slump: The Bare Numbers
According to Bank of America economists, 2.77 million tourists visited Thailand in March – 15 percent fewer than the previous month. Early indicators for April point to further deterioration. In the week after the traditional New Year festival Songkran (April 13–15), Thailand recorded only 464,720 arrivals.
Economists call it the third-weakest week since 2024. The slump came much earlier than the usual low season, which typically begins at the end of May. Songkran itself is traditionally peak season, with water fights drawing both locals and tourists. That this week delivered such weak numbers is considered a clear warning signal.
What the Decline Means for State Coffers
Permanent Secretary of the Ministry of Tourism and Sports, Natthriya Thaweevong, expects drastic consequences. If the Iran war lasts longer than six months, Thailand will record three million fewer visitors, she told Bloomberg. The economic damage would amount to the equivalent of 4.6 billion US dollars – about 10 percent of last year’s total foreign tourism revenue.
“If the Iran war lasts longer than six months, Thailand will record three million fewer visitors.”
said Natthriya Thaweevong, Permanent Secretary of the Ministry of Tourism and Sports.
The government had set ambitious goals for 2026: 35 million foreign visitors. In 2025, there were around 33 million. If the crisis persists, a decline to the 2023 level of about 28 million guests threatens. The budget deficit for 2027 has already been set at 788 billion baht – a clear indicator of expected tax shortfalls.
Crisis Management: The Tourism Authority’s War Room
The Tourism Authority of Thailand (TAT) has responded to the slump by setting up a crisis center, internally called a War Room. The goal is close monitoring of tourism flows, flight connections, fuel prices, flight capacities, and booking trends in order to quickly take countermeasures if needed.
The crisis center aims to reduce dependence on long-haul markets and focus more on regional short-haul markets. This strategic shift is sensitive, as it could lead to losses especially for hotels in the upscale segment. The Thai tourism industry, however, hopes for greater stability in times of geopolitical crisis.
Overview of Measures
The government is planning a whole package of measures. Taxpayers will be able to claim tax deductions for tourism expenses. Lower tax rates or payment deferrals are being discussed for hotel operators. And at gas stations, the government is considering rationing to ensure that tour bus companies receive sufficient fuel.
The background is Thailand’s massive dependence on oil and gas imports from the Middle East. Around 70 percent of gas imports and almost 80 percent of oil imports come from the crisis region. According to J.P. Morgan, net imports of oil and gas account for about seven percent of Thailand’s GDP – a dependency that fuels inflation and burdens the current account when energy prices are high.
Focus on High-Spending Middle Eastern Guests
Parallel to short-term measures, Thailand is increasingly targeting a specific demographic: wealthy travelers from the Middle East. The country aims to attract at least 200,000 visitors from this region this year. The reasoning is simple: according to government data evaluated by Bloomberg, guests from the Middle East spend an average of 2,500 US dollars per trip.
In comparison, European visitors spend around 1,800 US dollars on average, and Asian tourists about 1,200 US dollars. The strategy aims to partially compensate for the drop in visitor numbers through higher per-capita spending. Whether this can succeed given the geopolitical tensions in the region itself remains to be seen.
Additional Burden: The Oil Price Shock
Tourism is not the only area suffering from the Iran war. Rising energy costs hit Thailand at another sensitive point. Calculations by Bloomberg suggest that a war lasting longer than three months could halve Thailand’s economic growth. Flight prices for the route Zurich–Bangkok temporarily shot up to 2,800 francs after the outbreak of war.
High fuel prices are also severely impacting the fishing industry. Tagesschau reports that about half of the fishing boats have ceased operations. Thailand is one of the world’s leading suppliers of seafood – rising fish prices are another burden for consumers in the country.
How Things Could Proceed
Torsten Schäfer of the German Travel Association (DRV) sees reason for optimism despite the current shockwaves. Tourism has historically proven to be extremely resilient to crises. As soon as stability returns, people’s desire to travel will also return. He expects a familiar pattern: a phase of short-term uncertainty followed by long-term robust demand with catch-up effects.
“Tourism has historically proven to be extremely crisis-resistant. As soon as stability returns, people’s travel desire returns.”
said Torsten Schäfer, German Travel Association (DRV).
For expats and tourists in Thailand, the crisis primarily means rising living costs due to higher energy prices. The tourism industry, on which many indirectly depend, will recover no earlier than after a de-escalation in the Middle East. Those living in Thailand should keep an eye on fuel prices and flight connections – both will significantly determine the direction of the recovery.
Editorial note: This article is based on data and statements from Bank of America, Bloomberg, n-tv, Capital, Süddeutsche Zeitung, Tagesschau, and Blick. All information without guarantee. The mentioned measures of the Thai government are partly still in the planning stage.