Thai tourism faces double hit from baht and airfares: ATTA

KUALA LUMPUR, 22 JULY 2026 —

BANGKOK: Thailand's tourism industry is facing a double hit from volatile exchange rates and rising airfares, with foreign arrivals now expected to reach only 30-32 million in 2026, according to the Association of Thai Travel Agents (ATTA). The fluctuating baht and prolonged Middle East conflict, which has dragged on for two months, have pushed global oil prices higher, resulting in more expensive air tickets.

This has raised concerns for the tourism sector, which is a significant contributor to Thailand's economy.

The tourism industry in Thailand has experienced fluctuations in the past, but the current situation is particularly challenging. The sector has been recovering from the COVID-19 pandemic, which had a devastating impact on tourism worldwide. However, the recent surge in oil prices and the strengthening of the baht have affected tourist spending, with visitors becoming more cautious with their expenses.

According to Sisdivachr Cheewarattanaporn, honorary president and senior adviser to ATTA, shopping in Thailand has declined compared to the pre-COVID-19 period, with visitors now being more selective with their purchases. Chinese tourists, who were once known for heavy shopping, are now more discerning and tend to buy only consumer products that are not available in China.

The current situation has led to a decline in foreign tourist arrivals, with ATTA expecting a further fall in the second quarter and potentially extending into the second half of 2026. The weakness in tourist arrivals is attributed to the higher cost of air travel, with airlines announcing temporary route cancellations or flight reductions during the summer schedule.

Flights that continue to operate have had to raise fares due to higher fuel costs, making it more expensive for tourists to travel. Sisdivachr noted that the tourism sector is now facing a double impact from baht volatility and the fighting in the Middle East, which has pushed up airfares and raised the overall cost of each trip.

The situation in Thailand is being closely monitored by neighboring countries, including Malaysia, which has a significant tourism industry of its own. The Malaysian tourism sector may face indirect impacts from the decline in tourist arrivals in Thailand, particularly if travelers choose to delay or cancel their travel plans to the region. However, Details not yet available on the specific impact on the Malaysian tourism industry.

The Malaysian government and tourism authorities may need to assess the situation and consider measures to mitigate any potential effects on the local tourism sector.

In terms of specific companies and sectors, the decline in tourist arrivals and spending is likely to affect businesses that rely heavily on tourism, such as hotels, restaurants, and tour operators. The Tourism Authority of Thailand (TAT) has revised its forecast for foreign arrivals, expecting 30-34 million visitors in 2026, down 18% from its previous target of 36.7 million.

The TAT's forecast is based on the assumption that the Middle East situation will ease within one to three months. However, the situation remains uncertain, and the outlook for the tourism sector will depend on various factors, including the duration of the conflict and the impact on global oil prices.

Looking ahead, the outlook for Thailand's tourism industry remains uncertain, with Sisdivachr noting that the situation has become extremely difficult to assess on a quarterly basis. If the Middle East conflict ends soon, oil prices may fall, and tourism could recover quickly. However, if the conflict persists, travelers may choose not to travel, and the tourism sector may face a prolonged period of weakness.

The ATTA and TAT will need to continue monitoring the situation and work together to stimulate travel and support businesses in the tourism sector. The Malaysian government and tourism authorities will also need to keep a close eye on the situation and consider measures to mitigate any potential impacts on the local tourism industry.