Thai hotels brace for softer Q2 as Middle East conflict hits travel
Thai hotel operators expect softer Q2 room rates and demand as Middle East unrest lifts air fares, trims flights and slows long-haul travel.
- A survey of Thai hotel operators indicates a weaker outlook for the second quarter (Q2), with nearly 50% expecting lower average daily room rates and a projected drop in occupancy compared to the previous year.
- The primary cause for the downturn is the conflict in the Middle East, which has slowed down long-haul travel and led to a significant drop in tourist arrivals from European, American, and Middle Eastern markets.
- The conflict has prompted airlines to raise ticket prices, reduce flight frequencies, and cancel services to control costs, directly impacting travel demand for routes to Thailand.
- Due to the conflict's impact, Thailand's overall foreign tourist arrival target for the year may be missed by as much as 18%, with forecasts being revised downwards from 36.7 million to 30-34 million visitors.
The March 2026 Hotel Business Operator Sentiment Index survey, conducted by the Thai Hotels Association (THA) and the Bank of Thailand between March 13 and 31, 2026, with responses from 138 operators, pointed to the outlook for Thailand’s hotel business during the Q2 2026 low season after the tourism sector was directly hit by the conflict in the Middle East.
Thienprasit Chaiyapatranun, president of the Thai Hotels Association, said the March sentiment index showed that nearly 50% of hotel businesses across all star ratings expected average daily rates (ADR) in the second quarter this year to decline from the same period last year.
Of those, 14% expected ADR to fall by more than 10%, 16% expected a drop of 6-10%, and 12% projected a decline of 3-5%.
Meanwhile, about 32% of hotel businesses, particularly in the North and East, expected ADR to remain flat. More than 20% believed they would still be able to raise ADR slightly, though in most cases by no more than 5%.
Most of these were hotels in tourist areas serving guests from a range of nationalities, such as Russians and Asian travellers.
“The confidence index survey also projected April 2026 occupancy at 60%, lower than last year, from both foreign and Thai tourists. Part of this is due to the impact of the unrest in the Middle East, which has contributed to a likely fall in ADR in the second quarter compared with last year. Only some hotels expect to be able to raise room rates, and in most cases by no more than 5%.”
The association hopes tourism conditions in April will improve with Songkran festival activities nationwide, which are seen as a key highlight helping to create a lively atmosphere and encourage more travel by both Thai and foreign tourists.
Thai guest numbers set to shrink in Q2 2026
In addition, more than 53% of hotel businesses across all star ratings expected the overall number of Thai guests in the second quarter this year to decline from the same period last year, especially in the East.
Some 19% expected Thai guest numbers to fall by more than 20%, while 17% forecast a decline of 11-20%, and another 17% expected a drop of less than 10%.
However, 34% of hotel businesses expected the number of Thai guests to remain stable, especially in the Central region, while about 10% said Thai guest numbers could rise by no more than 10% in tourist areas, with most of those guests staying at four-star hotels and above.
March occupancy averages 69% nationwide
Thienprasit said the survey also showed that average occupancy in March stood at 69%, down from the previous month as the low season began, but still higher than a year earlier.
This was in line with the 2.77 million foreign tourists who travelled to Thailand throughout March, up 2% from the same month last year.
A regional breakdown showed that average occupancy in March was 76% in the South, down from 90% in February; 75% in the Central region, down from 80%; 66% in the East, down from 80%; and 44% in the North, down from 67%.
“Tourism in March showed that the long-haul market has begun to slow due to risk factors and obstacles arising from the unrest in the Middle East. Many airlines have had to raise ticket prices and fuel surcharges, reduce flight frequencies and cancel some services to control costs, affecting passenger travel demand and the recovery of Thai tourism, particularly on long-haul routes.”
As a result, average occupancy at hotels in major tourist cities was not as full as usual.
Hotels near Bangkok are still hoping Thai travellers may decide to travel at the last minute, while hotels in secondary cities are facing greater difficulty because tourists are focusing on saving money and choosing shorter-distance trips.
The government and related agencies need to adjust their strategy to draw short-haul markets and continue stimulating travel so that the tourism sector does not stall.
Hoteliers urge state to stimulate demand and support supply
Thienprasit added that the support measures hotel operators wanted from the government included:
- Tourism and income stimulus measures, including more publicity and promotion for both major and secondary destinations, such as spreading events across different areas or organising business matching sessions; domestic tourism stimulus measures; keeping air fares from rising too high to attract both Thai and foreign tourists, especially Asian markets or markets not affected by the war; and boosting confidence in safety.
- Cost-relief measures, including lower energy costs and general living costs, as well as tax relief measures such as corporate income tax, personal income tax and property tax
- Financial measures, including liquidity support such as low-interest loans for hotel renovation or businesses affected by the conflict in the Middle East, as well as support for investment in sustainable energy.
- Labour measures to increase the number of skilled workers in the service sector
- Other measures, such as more comprehensive infrastructure development, tackling traffic congestion, and making it easier to obtain permits or undergo inspections, such as building inspections.
Foreign arrivals to Thailand down 2.6% from January 1-April 12, 2026
The Ministry of Tourism and Sports reported that Thailand received a cumulative 10,363,660 foreign tourist arrivals between January 1 and April 12, 2026, down 2.65% from the same period last year, generating about THB506,123 million in revenue from foreign visitor spending.
The top five source markets were China with 1,659,777 visitors, Malaysia with 1,093,636, Russia with 792,629, India with 712,913, and South Korea with 439,277.
In March 2026 alone, after conflict erupted in the Middle East on February 28, the European market sent 819,016 visitors to Thailand, down 4.2% from the same month last year.
But across the first quarter, from January 1-March 31, 2026, European arrivals totalled 3,050,711, up 3.9% from the same quarter last year.
For the Middle East market, excluding Israel, March arrivals totalled 12,485, down 33.26%.
Across the first quarter, the figure stood at 81,346, down 19.76%.
Visitors from the Americas totalled 148,421 in March, down 2.05%, while first-quarter arrivals from the region reached 485,051, up a slight 0.16%.
A report from the Tourism Authority of Thailand said the original 2026 target was 36.7 million foreign tourist arrivals, up 11% from last year.
But because of the conflict in the Middle East, the base-case scenario assumes the situation eases within one to three months, which would leave foreign arrivals at about 30-34 million, or 18% below the original target.
The main factors are the slowdown in the Middle East, European and American markets, constraints on flight routes, and volatility in global oil prices.
