Thai hotels cut room rates as Middle East conflict weakens demand
While half of hotels expected fewer tourists amid the Middle East conflict, 38% saw customer numbers fall more sharply than forecast.
- Due to the Middle East conflict, 88% of Thai hotels have seen tourist numbers decline, with many reporting the drop is worse than expected.
- In direct response to the weakened demand, hotels are cutting room rates and increasing marketing efforts to attract customers.
- Some hotels are also taking other measures to preserve cash, such as reducing investment or staff-related expenditures.
Thienprasit Chaiyapatranun, president of the Thai Hotels Association (THA), said that while 50% of hotels expected tourist numbers to decline as forecast because of the Middle East conflict, another 38% had seen customer numbers “fall more than expected”.
They had therefore responded by cutting room rates and stepping up marketing to attract customers.
Some hotel businesses, meanwhile, had chosen to preserve liquidity by reducing investment or staff-related expenditure.
Looking at the “third quarter of 2026”, most hotel operators believe overall international guest numbers are likely to decline from a year earlier because travel costs remain high.
Some tourist groups could face further pressure if the 60-day visa exemption is ended.
“Indian tourists”, who tend to be price-sensitive, may delay travel if they are required to use Visa on Arrival at immigration checkpoints, which could increase travel costs.
The same applies to “Thai tourists”, with most hotels expecting numbers to decline from the same quarter last year, particularly in the South, because purchasing power remains weak.
They are also under further pressure from higher living costs following the Middle East conflict.
However, some hotel operators expect international tourist numbers in the third quarter of 2026 to rise from the same period last year, particularly among “Chinese tourists”.
This is partly because some are choosing Thailand instead of other regions where travel costs are higher.
The average “occupancy rate” in June 2026 was 52%.
By region, the “Central region” had the highest rate at 65%, up slightly from 64% in May.
The “Eastern region” followed at 53%, down from 60% the previous month.
The “Southern region” stood at 42%, down from 48%, while the “Northern region” was at 37%, down from 39%.
The occupancy rate for July 2026 is forecast at 53%, lower than in the same month last year.
Thienprasit added that most hotel operators wanted the government to provide the following support measures:
- Tourism and revenue stimulus measures: Measures to stimulate domestic tourism and attract international visitors, particularly from short-haul markets; more joint sales promotions with airlines and online travel agencies (OTAs) to attract high-quality tourists; promotion of tourism in both major and secondary cities, including more government meetings and events; an increase in the number of flights; and a review of visa-free policies.
- Cost-relief measures: Lower energy costs and government fees, along with tax relief, including corporate income tax, personal income tax and house and land tax.
- Financial measures: Liquidity support, including low-interest loans, support for sustainable-energy investment and an extension of the Asset Warehousing Scheme.
- Labour measures: Support for training and skills development for service-sector personnel, particularly in technology, digital skills and AI.
- Other measures: Regular communication on the state of the tourism industry, improvements to immigration systems, easier application processes for various permits and measures to strengthen confidence in safety.
Thailand’s tourism sector in June 2026 was supported by the start of the summer holiday period in several countries, including short-haul markets such as China and Hong Kong.
However, it continued to face the challenge of “tourism competition”, particularly within Asia.
With travel also entering the low season, the government and relevant agencies have sought to stimulate tourism through the “Thailand 365 Days” policy, promoting Thailand as a year-round destination.
Tourism activities are being organised throughout the year in every region to stimulate and foster quality growth in the sector, in line with a global trend among tourists seeking destinations offering diversity in nature, culture, food and local experiences.
“The Thai Hotels Association believes the policies being advanced by the government can distribute income across all sectors and drive the economy, while building sustainability on a foundation of quality by raising safety and accommodation standards, particularly in Health & Wellness tourism, to support the long-term growth of Thailand’s tourism industry.”
