Thailand, Vietnam Tourism Rivalry Intensifies as Bangkok, Phuket Risk Losing Southeast Asia Travel Crown Amid Hanoi’s Rapid Visitor Growth

Published on May 6, 2025

Tourism operators in Thailand expressed concern regarding the nation’s future as a top Southeast Asian travel destination. They feared that ongoing growth stagnation, coupled with Vietnam’s remarkable surge in foreign tourist arrivals, might soon result in Thailand losing its regional leadership in tourism. Specifically, Vietnam recorded nearly a 50% increase in international visitors in March 2024 compared to pre-pandemic levels, contrasting sharply with Thailand’s inability to fully regain its previous inbound tourism volume.

Tourism stakeholders highlighted that if the current trend continues unabated, the shift in popularity could significantly influence global travelers’ preferences, reshaping tourism dynamics throughout Southeast Asia. Vietnam’s appeal, buoyed by lower travel costs, newer infrastructure, and effective government support for foreign agents, appears to resonate increasingly with international travelers from major global markets.

Strategic Subsidies and Airport Infrastructure Advantages in Vietnam

Thanet Supornsahasrungsi, president of the Association of Chon Buri Tourism Federation, noted that Vietnam proactively supports foreign travel operators, including Russian travel agents, by subsidising airfares and reducing airport landing fees. Such strategic measures prompted many tour companies to shift their offerings towards Vietnam’s coastal cities, particularly Nha Trang, during the peak travel season, diverting visitors away from traditionally popular Thai destinations such as Phuket.

Foreign travel agencies have noted significant advantages in Vietnam’s airport infrastructure. Major Vietnamese cities benefit from international-standard airports located conveniently within 30-45 minutes of key tourist attractions, significantly improving the ease of travel for international visitors. Conversely, tourists arriving in Thailand frequently face extended road travel times exceeding three hours when visiting popular areas like Hua Hin and Kanchanaburi from Bangkok’s airports. The marked disparity in airport proximity and accessibility could become increasingly influential in destination choices made by global travelers.

Cost Competitiveness and Family-Friendly Offerings in Vietnam

One substantial factor boosting Vietnam’s tourism growth is its attractive cost competitiveness. Mr. Thanet observed that the living costs and general tourism-related expenses in Vietnam remain notably lower than in Thailand. Particularly, family-oriented resorts, attractions, and theme parks in Vietnam are newer, more affordable, and better integrated into attractive packages, often at half the price of similar Thai offerings. This substantial price advantage could prove increasingly compelling for families and cost-sensitive travelers worldwide, potentially reshaping global travel decisions away from Thailand towards more budget-friendly Vietnam.

Concerns Raised by Thailand’s Tourism Industry Leaders

Industry leaders in Thailand consistently expressed anxiety about the future prospects for their tourism market, highlighting urgent concerns about declining competitiveness against Vietnam. Thanet Supornsahasrungsi projected that Vietnam could surpass Thailand in inbound visitor volume within two to three years, noting Vietnam’s ambitious target of 23 million international arrivals in 2024. Thailand, meanwhile, reduced its earlier estimate of 38.5 million annual arrivals to 36.5 million, signaling diminished confidence in meeting previous forecasts.

The actual tourism data starkly underscored this challenge. While Thailand hosted approximately 2.7 million international tourists in March 2024—a 20% decline compared to the same month in 2019—Vietnam welcomed more than 2 million international visitors, representing a 40% increase over its pre-pandemic figures. Such diverging trajectories have heightened industry apprehension about Thailand’s future as the preferred destination for international tourists visiting Southeast Asia.

Implications for Bangkok’s Tourist Hotspots and Nightlife Appeal

Sanga Ruangwattanakul, president of the Khao San Road Business Association, expressed specific concern about Bangkok potentially experiencing fewer tourist arrivals compared to previous years. He noted shrinking interest from the critical Chinese market and growing attention toward emerging destinations like Vietnam. He pointed specifically to the increasing popularity of nightlife and entertainment districts in Ho Chi Minh City, where vibrant walking streets directly compete with iconic Thai locales such as Khao San Road.

The rising appeal of Vietnamese cities’ nightlife and entertainment offerings to international travelers underscores broader global shifts in tourist preferences, driven by factors such as affordability, novelty, and urban vibrancy. Consequently, Bangkok’s traditional allure as Southeast Asia’s primary nightlife destination may diminish over time, potentially impacting local businesses significantly reliant on international tourism.

Proactive Measures Proposed by Thai Tourism Associations

Responding to these competitive threats, the Association of Thai Travel Agents (Atta) proactively proposed a subsidy initiative aimed explicitly at restoring Thailand’s appeal among Chinese tourists, historically a critical source market for the country’s tourism industry. Atta submitted a detailed proposal requesting a government subsidy of 320 million baht to directly stimulate inbound travel from China. This scheme, if approved, was projected to generate at least 8.3 billion baht in revenue based on an estimated spending average of 55,869 baht per Chinese tourist, expecting approximately 150,000 visitors through this targeted initiative.

Atta emphasized the low-risk nature of the subsidy program, highlighting an 80% funding commitment from private sector tourism businesses, leaving the government responsible for only 20% of the total costs. Additionally, the government could mandate each subsidized flight must carry at least 150 Chinese tourists to ensure efficiency and cost-effectiveness.

• Proposed Subsidy Scheme Highlights:
  • 320 million baht requested to stimulate Chinese tourist arrivals.
  • Potential economic return estimated at 8.3 billion baht.
  • Public-private investment model (80% privately funded).

Urgent Call for Enhanced Government Initiatives and Safety Measures

Tourism industry leaders unanimously agreed on the necessity for more active government involvement, advocating robust strategies to counter Vietnam’s rising prominence. Mr. Thanet emphasized that relying solely on past merits without improving infrastructure, safety measures, and developing fresh tourist attractions would inevitably jeopardize Thailand’s competitiveness. Without substantial government investment in tourism infrastructure and strategic market targeting, achieving the revised target of 36.5 million annual tourist arrivals would remain a challenging prospect.

Industry leaders strongly encouraged the government to actively engage in enhancing safety, improving connectivity, upgrading facilities, and expanding promotional activities specifically targeted at critical international markets such as China and Russia. Such strategic interventions were deemed essential to counter Vietnam’s increasingly aggressive positioning in the Southeast Asian tourism marketplace.

Vietnam’s Rapid Tourism Growth Threatening Thailand’s Market Dominance

At the core of tourism stakeholders’ apprehension was Vietnam’s swift ascent as an increasingly preferred travel destination. The marked growth in Vietnam’s inbound tourism, attributed to strategic governmental interventions, competitive pricing, superior airport infrastructure, and affordable family-oriented products, significantly raised Vietnam’s attractiveness among global travelers. In contrast, Thailand’s sluggish recovery and infrastructure challenges amplified fears of losing regional market share and prestige.

Given Vietnam’s ambitious target of 23 million international tourists for 2024 and Thailand’s downward-revised projection, industry professionals foresaw significant shifts in visitor preferences emerging globally. The industry’s recognition of these challenges called for immediate action, reflecting broader concerns that regional tourism dynamics could drastically change within the next two to three years.

Thailand’s Tourism Industry Facing Critical Crossroads

Overall, Thailand’s tourism sector stands at a critical crossroads, with industry leaders expressing acute awareness of Vietnam’s competitive threat. The juxtaposition between Thailand’s tourism stagnation and Vietnam’s rapid advancement underscores the urgency for strategic responses. Industry voices have called for immediate government-backed initiatives aimed at modernizing infrastructure, enhancing safety measures, offering targeted incentives, and increasing global market engagement.

As Vietnam continues leveraging strategic advantages in cost competitiveness, airport infrastructure, and government-supported incentives, Thailand’s tourism industry must respond decisively to retain its historically dominant regional position. This ongoing rivalry is expected to reshape global traveler choices profoundly, influencing future destination preferences not only within Southeast Asia but also within the broader international tourism landscape.