Indians Embrace New Destinations Like Vietnam, Sri Lanka And Malaysia As Political Instability In Southeast Asia Leads To Decline In Thai And Cambodian Travel

Published on December 28, 2025

As regional instability in Southeast Asia prompts concern among Indian travelers, many are rethinking their New Year vacation plans. With ongoing border tensions affecting popular destinations like Thailand and Cambodia, travelers are opting for safer, more affordable alternatives. Countries like Vietnam, Sri Lanka, and Malaysia are now emerging as top choices, offering unique cultural experiences, shorter travel times, and competitive pricing. This shift reflects a broader trend towards prioritizing safety, value, and personalized experiences in light of the current geopolitical climate.

Indian travelers are adjusting their New Year travel plans, choosing destinations beyond their traditional favorites like Thailand and Cambodia. In recent months, countries such as Vietnam, Indonesia, Sri Lanka, Japan, and parts of West Asia have emerged as attractive alternatives. This shift comes as tensions in Thailand and Cambodia, primarily due to ongoing border conflicts, have raised concerns among travelers. Over the past few weeks, clashes between armed forces in the South Asian region led to significant casualties and a ceasefire that was only established recently. The violence left over 100 people dead and triggered a reevaluation of travel plans, particularly to these two Southeast Asian nations.

The impact on Thailand has been noticeable, though not overwhelmingly disruptive. According to travel industry experts, inquiries for Thai destinations have softened by 10-20%, with actual bookings dropping by 8-15%. Although some travelers have rescheduled their plans, the number of outright cancellations remains relatively low, ranging from 3% to 8%. Many have opted to reroute their trips within Thailand, particularly focusing on other regions within the country, where safety concerns are less prominent. Despite this, Thailand’s demand for the year-end period has not collapsed entirely, with spending levels largely unchanged. Mid-market travelers typically spend between Rs 1.1 lakh to Rs 1.8 lakh per person, while premium travelers tend to spend between Rs 2.5 lakh and Rs 4 lakh during the festive season.

Cambodia, on the other hand, has experienced a more significant decline in demand. Travel inquiries have reportedly dropped by 20-35%, and cancellations have surged, with estimates ranging from 8% to 18%. The unrest in neighboring Thailand has compounded Cambodia’s struggles, as it was already facing an uptick in concerns related to safety. Many travelers, especially families and first-time international tourists, have been cautious about booking trips to destinations in Southeast Asia. For these travelers, factors such as safety, visa policies, flight availability, and overall value remain central to their decision-making process.

However, younger travelers, including group travelers and honeymooners, have demonstrated more flexibility. They are often less affected by the region’s instability, prioritizing affordability and the uniqueness of the destination. This shift has led to increased interest in alternative destinations, with Vietnam, Sri Lanka, and Malaysia gaining traction due to their competitive pricing and diverse offerings.

The trend toward recalibration rather than a total disruption of travel plans is evident. Many travel companies, such as Viacation, have reported that booking behavior remains stable, albeit with travelers taking longer to finalize their decisions. While cancellations are minimal, most adjustments involve changes in dates or shifting to alternate destinations. For example, a rise in airfares, caused by constraints in airline capacity, has contributed to travelers seeking more affordable options. The surge in flight costs has resulted in a growing demand for short-haul destinations like Malaysia, Singapore, and Sri Lanka, which offer visa-on-arrival services and shorter travel times.

Airline ticket prices are now considered the most unpredictable expense in the overall travel budget, with many travelers focusing their attention on minimizing costs associated with flights. Ground-level prices, including hotel accommodations and local experiences, have only seen a moderate increase of 5-7%, allowing travelers to adjust their plans without significantly altering their budget.

Another trend emerging from this shift is the rise in customized travel experiences. According to Hari Ganapathy, co-founder of Pickyourtrail, there has been a noticeable increase in paid activities included in itineraries. Over the past two years, the inclusion of customized experiences in travel plans has risen by nearly 30%, and this year, the trend has continued with a 13% increase. Travelers are increasingly moving away from traditional, nightlife-centered holidays and opting for more immersive and restorative experiences. Activities such as culinary workshops, heritage walks, village dinners, farm tours, and wellness programs have become key offerings for travel companies.

The trend toward more personalized travel options is evident in booking patterns. Data from EaseMyTrip indicates that Vietnam is seeing significant growth in Indian traveler traffic, with estimates predicting a 125% increase in visitors for 2025. Sri Lanka, another rising destination, has seen at least a fivefold increase in bookings compared to last year. Travel companies are responding by shifting their marketing efforts from promoting large-scale, nightlife-driven New Year events to focusing on experience-driven travel. These curated trips focus on wellness, cultural immersion, and local heritage, aligning with evolving traveler preferences.

Domestic travel within India is also seeing a surge, with destinations like Goa, Kerala, and the Andaman Islands continuing to attract festive-season demand. These popular destinations offer alternatives for those who prefer to stay closer to home amid the changing overseas plans. With these domestic options providing a balance of relaxation and adventure, travelers are more inclined to explore their own country’s offerings.

While the turbulence in Thailand and Cambodia has caused a slight reshuffling in travel preferences, the overall demand for international travel remains strong. Destinations like Vietnam, Sri Lanka, and Malaysia are capitalizing on the situation by offering competitive pricing and curated experiences that cater to shifting traveler interests. The emphasis has shifted from mass tourism to more personalized, enriching experiences that resonate with the modern traveler’s evolving needs.