Thailand Hotels Brace For Unexpected Growth Slowdown In Third Quarter, Nearly One-Third Expect Over Thirty Percent Decline In Chinese Visitors

Published on August 15, 2025

As Thailand’s hotel industry enters the third quarter of 2025, operators are bracing for a slowdown in foreign visitors, especially from China, amid rising safety concerns. This forecasted downturn comes after a period of modest growth, with hotels reporting an average occupancy rate of 58% in July 2025, up from the previous month. Despite this positive trend, hotel operators are worried about a significant drop in the number of Chinese tourists, with almost a third of hoteliers predicting a year-on-year decline of more than 30%. The decrease in Chinese arrivals is largely attributed to concerns over safety, alongside ongoing challenges in the labor market and regional performance disparities. These factors combine to create a cautious outlook for Thailand’s hotel industry, signaling a more subdued tourism season in the upcoming months.

Thai Hotels Predict Q3 Slowdown in Foreign Visitors, Particularly from China

The Thai hotel industry is bracing for a potential slowdown in foreign visitors during the third quarter of 2025, with nearly a third of hotels predicting a drop of over 30% in Chinese guest numbers. This forecast stems largely from concerns over safety, which have impacted travel patterns.

According to the July 2025 Hotel Business Confidence Index, Thai hotels reported an average occupancy rate of 58% in July, marking an improvement from the previous month. This uptick was observed across almost all hotel star ratings and regions, partly due to the summer school holidays in several countries, particularly in Europe.

Regional Occupancy Trends

The Central region saw the highest occupancy rate, reaching 67% in July, a significant jump from 61% in June. The Eastern region recorded a slight dip in occupancy, falling to 58% from 58.7%. Meanwhile, the South experienced a noticeable improvement, with occupancy climbing from 45% in June to 56% in July. The North also witnessed a positive trend, increasing from 29.2% to 41%. For August 2025, the national occupancy forecast stands at 56%.

Despite this overall growth, challenges persist. Labor shortages remain a pressing issue, with most hotels reporting that the shortage is affecting service quality, though not their ability to accommodate guests. In response to these challenges, many hotels have adjusted their staffing practices. Some have reassigned staff to handle multiple roles, others have opted for casual, job-based hires instead of permanent staff, and several have reduced non-labor costs, such as energy and disposable supplies.

Impact of Safety Concerns on Chinese Tourism

The outlook for foreign tourism, particularly from China, is considerably subdued. The Thai Hotels Association’s President pointed out that the survey reflected expectations of a decline in foreign tourist arrivals for Q3 compared to the same period last year. This is especially true for hotels in the Central and Southern regions, where Chinese visitors are forecast to contract more sharply than in other regions.

Nearly 30% of hotel operators in Thailand are forecasting a reduction of over 30% in Chinese guest numbers year-on-year. This decline is attributed primarily to concerns over safety, which have had a significant impact on Chinese tourism. An additional 18% of hoteliers are predicting a decline in Chinese guests by 21-30%, while 19% expect a smaller drop of between 11-20%.

Short-Haul and Long-Haul Market Outlook

In terms of the short-haul market, the outlook is also less than optimistic. 28% of hotels predict a drop of 11-20% in visitors, while 26% expect a decline of no more than 10%. Some hotels, however, are anticipating a more significant fall, with 19% of operators expecting a decrease of over 20% in short-haul guest numbers.

The long-haul market, on the other hand, shows some signs of hope. Certain northern tourist areas are forecast to see growth. However, the overall picture remains challenging, with 27% of operators forecasting a fall of up to 10% in long-haul tourism. 21% anticipate a decline of 11-20%, and 16% predict a drop of more than 20%.

Domestic Stimulus Scheme Impact

Regarding the Thai government’s “Half-Half Thai Travel” domestic stimulus scheme, which aims to boost local tourism, 47% of hotels reported that the scheme would have no effect on their revenue. However, 28% estimated that the initiative would result in a modest 5% increase in revenue year-on-year. Hotels in the Eastern region seemed to benefit more from this scheme, with more than a quarter of them expecting a 6-10% revenue increase.

While the Thai hotel industry experienced an uptick in occupancy in July 2025, particularly driven by European summer holidays, a more challenging outlook lies ahead for the third quarter. Concerns over safety and the ongoing labor shortages, along with the anticipated drop in Chinese tourism, are likely to dampen growth. As the country continues to navigate these obstacles, the government’s stimulus measures may offer some support, particularly for domestic travelers. However, foreign arrivals, particularly from short-haul and long-haul markets, are expected to face a tough road ahead. The evolving trends signal a period of adjustment for the hospitality sector, as it adapts to shifting demand and external factors.