THAILAND – The government approved a multi-billion-baht rescue package aimed at reversing a slump in domestic tourism, including tax breaks of up to 20,000 Baht per person for holiday travel and a range of support measures for hotels and public spending.
Three-pillar rescue plan
The economic cabinet signed off on a three-part plan after officials warned that an 8% fall in domestic tourism was weighing on the wider economy. Economic Minister Ekniti Nitithanprapas described the measures as ‘urgently necessary’ to stabilise travel and related services.
Under the scheme, Thais who travel between October 29 and December 15, 2025, could claim tax relief on travel expenses up to 20,000 Baht (around €500) per person. The scheme was designed to steer visitors away from the most popular tourist hubs: travellers to so-called secondary cities were to receive 1.5 times the usual benefit, a deliberate incentive to boost lesser-visited regions.
Support for hotels and local infrastructure
The package also targeted accommodation providers outside major tourist centres. Hotels and guesthouses in secondary cities were offered double tax depreciation on renovation and upgrade costs. Until March 2026, they could deduct investments in equipment such as air-conditioning, solar power systems and wastewater treatment from their taxable income.
At the same time, ministries were ordered to accelerate planned expenditure on training and conferences, with a requirement that 60% of those budgets — about 6 billion Baht (roughly €150 million) in total — be spent by January 2026. Officials said this would create immediate demand for the services sector and help restore business for hotels and venues.
Tackling the budget spending problem
A persistent problem for Thailand’s recovery has been slow public spending. Government figures showed that more than 300 billion Baht remained unused last year and the investment disbursement rate stood at just 65%. The new administration moved to tighten controls for the 2026 budget, valued at 3.78 trillion Baht (about €94.5 billion).
New directives stipulated that 93% of the general budget and 75% of the investment budget must be spent. Ministry chiefs were told their spending would be reviewed monthly, with consequences for underperformance, as authorities sought to ensure funds were deployed to stimulate the economy.
Expected economic impact
The economic minister estimated the measures could add about 0.4 percentage points to economic growth, a modest but welcome boost for a tourism industry still recovering from the pandemic’s fallout. Policymakers framed the package as a rapid, targeted response to revive demand while directing benefits to regions that need them most.
Additional proposals were under review: the Chamber of Commerce backed tax deductions for company travel, and officials were discussing whether to reduce the amusements tax from 10% to 5% to encourage more businesses to operate formally.
Reaction and outlook
Experts and industry observers largely welcomed the package. Some called it ‘the right step at the right time’, while others cautioned that fiscal incentives alone might not be enough to deliver a lasting recovery. The key questions were whether the incentives would change travel patterns fast enough and whether the government could overcome its own spending bottlenecks.
With Prime Minister Anutin Charnvirakul’s government under pressure to deliver, officials acknowledged the clock was ticking. The measures set out a short-term roadmap to revive tourism and speed public investment — but longer-term reforms would be needed to restore Thailand’s position as a top Asian destination.