Hotel bookings sink — airlines and tourism hit by oil crisis

Thailand’s hotel industry is bracing for a weaker low season as rising oil prices, fewer flights and softer travel demand begin to weigh on bookings.

The prolonged conflict in the Middle East, now running for more than two months, has pushed global oil prices sharply higher and added fresh pressure to the tourism sector, which had only recently recovered from the Covid-19 pandemic.

Airlines have been hit by higher fuel costs, forcing some to raise fares and reduce flight frequencies. The impact is now being felt by hotels, which are seeing slower forward bookings for the rest of the year.

According to the Tourism and Sports Ministry, Thailand welcomed 11.69 million foreign visitors from January 1 to April 30, 2026, down 3.39% from the same period last year. Tourism revenue from international arrivals stood at 571.27 billion baht, down 3.21%.

Arrivals from the Middle East, excluding Israel and Iran, fell 32.17% to 103,053. European arrivals rose slightly by 0.32% to 3.6 million, while Asia-Pacific arrivals dropped 4.80% to 7.33 million. Visitors from the Americas edged down 0.23% to 602,400.

China remained Thailand’s largest source market in the first four months, with 1.91 million arrivals, up 15.67%. It was followed by Malaysia, Russia, India, South Korea, the United Kingdom, Germany, the United States, France and Taiwan.

The slowdown became more visible in April, the second month after fighting began on February 28. Thailand received 2.37 million foreign visitors in April, down 7% year on year. Middle East arrivals plunged 57.07%, while European arrivals fell 15.79%.

Prachoom Tantiprasertsuk, vice-president of operations for Central and Southern Thailand at Dusit Hotels and Resorts, said hotel bookings in Thailand for the second and third quarters had fallen by 20-30% from the same period last year.

She said the decline was being driven mainly by slower new bookings rather than cancellations. If long-haul travellers stay away, hotels will have to focus more on short-haul and domestic markets while cutting costs, saving energy, avoiding new hiring and working with suppliers that offer more flexible payment terms.

“After more than two months of conflict in the Middle East, hotel businesses are expected to be able to hold on for another one to two months. If it lasts longer than that, things will become more difficult,” she said.

Dusit’s hotel business in the Middle East has also been affected. The group currently operates seven hotels in the region, while occupancy at its Dubai hotels has dropped to 30%, compared with at least 80% under normal conditions.

Prachoom said stopover tour groups staying overnight in the Middle East had been heavily affected because insurance does not cover such trips, while simple transit travel remains possible.

In her role as president of the Thailand Incentive and Convention Association, Prachoom said reduced flights, both domestic and international, were also affecting the meetings and incentive travel market.

Middle Eastern carriers have cut more than half of their flights, slowing arrivals from Europe. Go Vacation, a tour company specialising in German-speaking markets, said low-season customers travelling to Thailand had fallen by 60-70% from last year because many normally connect through Middle Eastern hubs.

Short-haul Asian routes, including China and India, have also become more expensive, with airfares rising by more than 20%. This has forced some large MICE groups, especially incentive groups, to reduce the number of participants. A group that previously brought 200-300 people may now cut the size to around 150.

Prachoom said the US remains the only market that is still strong and has not been significantly affected by the conflict, both in the MICE and leisure segments.

She said incentive travel had been hit directly by tighter corporate budgets. Companies that previously set aside 2 million baht for a trip may now have to reduce the number of travellers, shorten programmes, cut travel days or downgrade hotels from five-star to three-star properties to stay within budget.

The outlook for the MICE market in the second half of the year is also causing concern. Most bookings for the third and fourth quarters remain at the enquiry stage, with no firm contracts or confirmations.

Exhibition organisers are also worried that higher airfares could reduce the number of buyers and visitors attending events.

However, Prachoom said tourism and MICE operators should prepare for a strong rebound once the war ends. She expects Middle Eastern airlines to launch a price war to regain market share, which could bring airfares down and help Thailand return quickly as a preferred destination.

“Thailand must be ready for the bounce-back, from safety to workforce upskilling. Everything must be ready to welcome tourists back,” she said.