Published on
August 28, 2025
Tourism operators and airlines in Thailand are calling on the government to restore border stability and improve tourism confidence, as ongoing political tensions and border disputes could significantly impact the tourism sector. Recent incidents, particularly those related to the border clashes with Cambodia, have the potential to reduce the average hotel occupancy rates in Thai hotels by more than 10% year-on-year.
Impact of Political Instability on Tourism
Bill Heinecke, the chairman of Minor International, a prominent tourism and hospitality group, highlighted the detrimental effects that ongoing political instability has had on Thailand’s tourism industry. Speaking at the Thailand Focus 2025 event, Heinecke pointed out that the border tensions between Thailand and Cambodia, which started in the previous month, have led to a noticeable decline in foreign tourism.
Minor International’s hotels in Thailand have recorded fewer foreign tourists, especially from the United States, which recently issued a travel warning for the country. Additionally, Cambodia, which has traditionally served as a strong tourism gateway for Thailand, has also seen its hotel occupancy rates plummet, reflecting the negative impact of the ongoing tensions.
The situation has created a ripple effect across the region, as Cambodia has historically benefited from Thailand’s tourism infrastructure, with many international visitors flying through Thailand to reach Cambodia. As the Cambodian tourism sector suffers, Thailand’s hospitality industry feels the ripple effect, which could lead to a decline in foreign arrivals and reduced revenue for local businesses.
Rising Anti-Thai Sentiment in Cambodia
The anti-Thai sentiment in Cambodia, fueled by ongoing tensions, has created additional challenges for Thai businesses operating in the region. Minor International, which has invested over 50 billion baht in Cambodia, has witnessed growing animosity toward Thai enterprises. The company has also had to shift its logistics to Vietnam, which has seen an increase in business, particularly in the restaurant and retail sectors, such as the Pizza Company and Swensen’s, both of which are part of Minor’s portfolio.
This shift in logistics has contributed to an uptick in occupancy rates at Minor’s Vietnamese hotels, as the tension between Thailand and Cambodia has led to a redirection of business in the region. With Cambodia’s struggles becoming more pronounced, the potential decline in foreign arrivals to Thailand has become a growing concern for the nation’s economy and its tourism industry.
A 10% Decline in Foreign Arrivals Predicted
Heinecke predicts that the total number of foreign arrivals in Thailand could decrease by as much as 10% compared to the previous year, further impacting hotel occupancy rates and reducing income from international tourism. He stressed the urgent need for a peaceful resolution to the border dispute, as the ongoing political situation is already showing signs of harming the Thai economy and its tourism sector.
The impact of this crisis is not yet fully measurable, but Heinecke warned that the third quarter of the year would likely see the negative effects begin to surface across various sectors, with Thai businesses feeling the pinch if the issues are not addressed swiftly. He emphasized that restoring stability is in the best interest of all parties involved, as prolonged instability could lead to even further economic damage.
Government Intervention and Boosting Tourism Confidence
The Thai government has been urged to take immediate steps to restore tourism confidence and boost foreign arrivals. Heinecke suggested that the government should consider offering more free domestic flights to foreigners, extending the current initiative, which includes a plan for 200,000 free flights. This initiative, he believes, would help increase tourism numbers, particularly in light of the current challenges facing the industry.
The Need for Restoring Confidence Among Chinese Tourists
Chai Eamsiri, the CEO of Thai Airways International, also expressed concerns about the current state of the tourism industry in Thailand. While Thai Airways is still seeing strong load factors across its Chinese routes, the majority of passengers are not stopping in Thailand. These flights mostly consist of connecting passengers, as many Chinese travelers are still hesitant about visiting Thailand directly.
According to Eamsiri, although China’s economy remains stable, many Chinese travelers are opting to fly to destinations other than Thailand. This reluctance is attributed to safety concerns and the lack of confidence in Thailand’s political stability. Restoring confidence among international travelers, particularly from China, remains a critical short-term priority for Thailand’s tourism sector.
The Role of Infrastructure in Enhancing Tourism
Damien Pfirsch, the Chief Commercial Officer at Agoda, also weighed in on the challenges facing Thailand’s tourism. He emphasized that Thailand must invest in its infrastructure to ensure that tourists are not only drawn to major citiesbut also to second-tier cities that offer authentic local experiences. Many tourists have visited Thailand multiple times, and the country’s tourism offering needs to evolve to cater to returning travelers.
Pfirsch suggested that by diversifying tourism to less crowded areas, Thailand could reduce the risks associated with overtourism while providing visitors with unique and sustainable travel experiences. This would also help to distribute tourists more evenly across the country, alleviating the pressure on popular tourist hotspots.
The Urgent Need for Sustainable Tourism Strategies
The current challenges facing Thailand’s tourism industry highlight the urgent need for a shift towards sustainable tourism. With the country’s tourism infrastructure under pressure, particularly as political instability continues to affect traveler sentiment, implementing strategies that balance growth with environmental and social responsibility has never been more crucial.
As Thailand navigates these turbulent times, it is clear that regional stability, the restoration of tourism confidence, and a commitment to sustainable practices are essential in securing a high-value, long-term future for the industry. Immediate action is required to ensure that Thailand continues to be a leading destination for international travelers while maintaining a robust, sustainable tourism economy.
