How Thailand Sees Domestic Tourism Sentiment is Shaped by New Economic Pressures Ahead of the 2025 Songkran Holiday? - Travel And Tour World (2025)

Wednesday, April 9, 2025

The ongoing slump in global stock markets, exacerbated by the imposition of US tariffs, is expected to significantly affect domestic tourism sentiment in Thailand throughout 2025. This includes the upcoming Songkran holiday, with a notable decrease in last-minute hotel bookings and tour group reservations. The financial strain felt by many, especially in the context of ongoing economic uncertainties, is poised to dampen domestic tourism activity in the country.

Fewer Bookings for Songkran: Impact on Local Tour Agencies

Kantapong Thananerngroth, president of the Thai Tourism Promotion Association, expressed concerns over the noticeable decline in domestic tourism bookings, particularly for Songkran. Many local tour agencies have received fewer reservations from Thai tour groups than anticipated, which he attributes to weakened consumer spending and a decline in overall travel sentiment. According to Mr. Kantapong, the middle-to-lower-income groups are cutting back on domestic trips, while the high-spending segment is opting to travel abroad during the holiday. This shift reflects broader economic pressures impacting travel behaviors.

Despite this, many domestic tourists are still likely to travel within their regions, but with more limited budgets. These travelers are expected to cut back on shopping and discretionary spending during their trips, a shift that could further dampen tourism-related revenues. This behavior is a direct consequence of growing financial caution, fueled by both external economic factors like US tariffs and the recent earthquake that affected parts of Southeast Asia.

Concerns Over Economic Pressures and Unexpected Events

Mr. Kantapong also highlighted how the combination of financial discipline and the constant pressure of unforeseen events is contributing to more cautious travel behaviors. Many consumers are feeling squeezed, with stagnant incomes not keeping pace with rising costs. This trend is especially concerning for the tourism sector, as leisure travel is often viewed as non-essential during times of financial strain. Mr. Kantapong anticipates that the decline in domestic tourism this year will be more pronounced than in 2024, as the post-pandemic travel boom is no longer a driving factor, and the ongoing economic slowdown continues to affect spending.

This pattern is not unique to Thailand. Globally, travel sentiment is being impacted by similar pressures, including tariff-driven price increases and ongoing uncertainty in various economies. The reduced demand for domestic tourism in Thailand serves as a reflection of broader international trends that could affect global travelers in the coming months.

Last-Minute Bookings and Songkran Holiday: A Shift in Demographics

Morrakot Kuldilok, president of the eastern chapter of the Thai Hotels Association, observed that many Songkran bookings were made in advance by Thai family groups, who tend to plan their trips ahead of time. However, the younger demographic, known for relying on last-minute bookings, may be hesitant to travel, instead choosing to stay in Bangkok or their hometowns. This shift in behavior is a direct result of the prevailing economic climate, and it will likely have a ripple effect on local hotels and businesses that depend on spontaneous tourists.

Younger travelers, who are often more price-sensitive and flexible, are now reconsidering their travel plans in the face of economic uncertainty. This is likely to reduce the number of visitors to popular destinations like Pattaya and Chon Buri, both of which traditionally see a surge of tourists during Songkran. The ongoing sluggishness in last-minute bookings signals a significant shift in consumer priorities, with many opting for more cost-effective options or foregoing travel altogether.

Regional Tourism Outlook: Pattaya and Chon Buri

Thanet Supornsahasrungsi, president of the Association of Chonburi Tourism Federation, stated that hotels in Pattaya and Chon Buri are projecting occupancy rates of 80-85% during Songkran, thanks to the school break. However, he noted that the growth in last-minute bookings has been slower than expected. This is indicative of a larger issue within Thailand’s tourism sector, where last-minute bookings, often associated with spontaneous travel, are becoming less frequent. The lingering effects of the earthquake in Bangkok and Myanmar have also contributed to the overall decline in tourism confidence.

Despite these concerns, Mr. Thanet emphasized that Pattaya remains a safe destination, even in the wake of the earthquake. He and other stakeholders, including the mayor of Pattaya, held a press conference to assure potential visitors that Chon Buri, the province where Pattaya is located, is not within any earthquake risk zones according to the 2021 ministerial regulations on earthquake prevention. Furthermore, high-rise buildings in the area are designed to withstand tremors, further ensuring the safety of tourists.

Domestic Shifts in Travel Preferences: Bangkok vs. Pattaya

A shift in domestic travel preferences has also been observed, particularly among those affected by the earthquake. Mr. Thanet noted that many people who typically live in condos and apartments have chosen to stay in hotels in Bangkok rather than traveling to Pattaya in the aftermath of the tremors. This trend points to an increase in local tourism to Bangkok, as some domestic travelers choose to remain in the capital for comfort and security during uncertain times.

For Pattaya, this shift in behavior could lead to fewer tourists visiting during the peak travel season, potentially resulting in lower-than-expected revenues for the local hospitality sector. Although occupancy rates are still strong, the decrease in spontaneous bookings and the rise of cautious, budget-conscious travelers could have long-term effects on tourism growth in the region.

Effects of Global Economic Pressures on Thailand’s Tourism Sector

The broader global economic pressures, particularly the ongoing US tariffs, are not only affecting domestic travel sentiment but are also likely to influence Thailand’s standing in the global tourism market. The tightening of disposable incomes and a decline in consumer confidence are not unique to Thailand, and many international travelers are likely to experience similar challenges. As more people prioritize essential spending and cut back on luxury or non-essential activities, international tourism flows to Thailand could also experience a slowdown.

As a popular destination for travelers from across the world, Thailand could see a dip in both international arrivals and domestic tourism numbers if global financial pressures continue. The tourism sector, which is a vital part of Thailand’s economy, may need to adapt to these changing dynamics by focusing more on value-for-money offerings and catering to a more cautious traveler base. This could mean a shift towards promoting budget-friendly travel experiences and increasing local tourism, rather than relying solely on international visitors.

Global Implications for Travelers: A Shift in Travel Sentiment

The effects of US tariffs and the global economic slowdown are expected to reverberate across the tourism industry, impacting travelers not only in Thailand but also in other parts of the world. As consumers feel the pressure of rising costs and limited financial flexibility, travel spending habits are shifting. Many travelers are likely to cut back on last-minute bookings, opt for closer destinations, and focus more on budget-friendly options.

For Thailand, this could mean a change in the composition of its tourist base, with a shift towards more domestic tourists and fewer international visitors from traditionally high-spending markets. The Thai tourism industry may need to adjust its marketing strategies to attract a more budget-conscious audience, focusing on local travelers and providing value-driven packages to entice them.