Overstrong baht threatens Thailand’s tourism price competitiveness as ATTA eyes 39m arrivals in 2026

Thailand’s tourism industry is warning that an “overstrong” baht could undermine the country’s price competitiveness from the late-2025 high season through 2026, making Thai travel and services appear more expensive to foreign visitors compared with regional rivals such as Japan and Vietnam.

Adit Chairattananont, secretary-general of the Association of Thai Travel Agents (ATTA), said that if the baht strengthens beyond 30 to the US dollar, it could weigh on tourism for an extended period. He argued that Thailand already has the highest cost of living in ASEAN, and a stronger currency adds further pressure at a time when competition for international tourists is intensifying.

He pointed to Vietnam as a major competitor, saying it offers similar natural and environmental attractions but at a lower cost. Vietnam, he added, can market itself as a fresher destination and does not face the same tourist safety concerns.

Adit said that when the baht strengthens while Thailand’s economy is not performing well, the problem becomes more severe and tourism becomes harder to compete. In his view, the most suitable exchange rate would be 40 baht per dollar, similar to the period after the 1997 Asian financial crisis, when the baht was stable and supportive of both exports and tourism.

He added that Thailand’s fiscal position is currently weak, export growth is not strong, inbound tourism is contracting, and household debt remains high. Against that backdrop, he said, the baht should at least weaken back to around 35 per dollar, similar to the level seen in 2019, when Chinese group tours to Thailand were booming before the Covid-19 pandemic.

As an example, he said Chinese tourists last year could exchange 1 yuan for about 5.4 baht, but can now get only around 4.4 baht per yuan — a drop of about 20% — prompting many to choose cheaper destinations first and visit Thailand later.

“The Bank of Thailand should manage the baht at an appropriate level,” Adit said. “With Thailand’s economy not doing well, exports and tourism still under pressure, and household debt this high, Thai people do not have much money. From the private sector’s perspective, the baht is unusually strong, possibly driven by surging gold prices, abnormal transactions, or cryptocurrency-related flows that are hard to control.”

ATTA forecasts 39 million foreign arrivals in 2026

Despite the concerns, ATTA forecasts that Thailand could welcome nearly 9 million Chinese tourists in 2026 — about double this year’s expected 4.5 million — helping drive total foreign arrivals to 39 million next year, up from an estimated 32–33 million in 2025.

Adit said that after Their Majesties the King and Queen made an official visit to China in mid-November, online sentiment among Chinese social media users was highly positive, helping Thailand’s image.

He also noted that the Tourism Authority of Thailand (TAT) attended the CITM 2025 travel trade show in Haikou, Hainan last week, strengthening ties and promoting two-way travel between Thailand and China.

In addition, large organisations such as Amway have shown confidence in Thailand by organising incentive trips totalling 13,000 participants, travelling in 10 groups of 1,300 each from early March to early April 2026.

Adit acknowledged that several incidents this year unsettled Chinese tourists, particularly the case of Chinese actor Xingxing who went missing near the Thai-Myanmar border earlier in the year, which he said had a long-term impact and contributed to the loss of millions of Chinese visitors — “not a short-term crisis”.

However, he said monitoring of Chinese social media now shows almost no negative news about Thailand, and he hopes talks to end the Thai–Cambodian border clashes will take place soon, improving overall confidence among foreign tourists travelling to Thailand.

TAT sees positive signs as Chinese arrivals to Thailand pick up

Pattaraanong Na Chiangmai, Executive Director for the Northern Region at the Tourism Authority of Thailand (TAT), said TAT is starting to see positive signs from the Chinese tourist market after stepping up marketing to communicate Thailand’s safety image and rebuild confidence. Over the past two to three months, there has been little negative news affecting travel sentiment, making tour agents more willing to sell tour packages to Chinese travellers, especially in China’s tier-2 and tier-3 cities.

She said overall Chinese arrivals to Thailand in December have recovered. While they are still down 28% year-on-year, the decline is smaller than in March-June, when arrivals fell by 41-48% after the disappearance of Chinese actor Xingxing. Currently, between 10,000 and 14,000 Chinese tourists are visiting Thailand each day, up from an earlier average of about 8,000-9,000 a day.

She added that a dispute between China and Japan has also created spillover effects. Chinese authorities have issued warnings advising Chinese citizens to avoid travelling to Japan, prompting travellers to switch to alternative destinations with similar products and package value. Most have chosen South Korea. For a shift towards Thailand, she expects the impact to become clearer from this December onwards. She said Chinese arrivals over the full year 2025 could even overtake Malaysian arrivals to rank first again, as severe flooding in southern Thailand has affected cross-border travel to Hat Yai district in Songkhla province during the final month of the year.

Following the China-Japan dispute, the latest figures from the Japan National Tourism Organization (JNTO) show that in November 2025, 562,000 Chinese tourists visited Japan, with growth slowing to just 3% year-on-year, compared with October, when 715,000 Chinese visitors were recorded, up 22.8%.

Cumulative Chinese arrivals to Japan over the first 11 months of this year (January-November) totalled 8.76 million, up 37.5% year-on-year, remaining the largest group of foreign visitors to Japan. The next largest were South Koreans (8.48 million), followed by Taiwan (6.17 million), the United States (3.03 million), Hong Kong (2.22 million), and Thailand (1.06 million).

Pattaraanong added that TAT has set a target of restoring Chinese arrivals to Thailand in 2026 to 6.7 million, the same level as 2024. She said reaching that figure is possible if negative factors ease significantly and supportive factors strengthen.

A key focus, she said, is joint marketing with airlines to increase seat capacity on Thailand-China routes. In 2024, total seat capacity stood at 8.81 million seats. In 2025, capacity fell to 7.49 million seats, down 14% year-on-year. For 2026, demand for charter flights is expected to rise. TAT has recently discussed additional airline incentive measures with Airports of Thailand Plc (AOT).

However, she warned that the Thai-Cambodian border dispute is another major factor affecting Chinese travellers’ confidence. If the situation drags on into mid-February 2026 — the peak travel period around the Lunar New Year holiday — it could further hit the Chinese market, particularly travellers from secondary cities who are more sensitive and anxious. She said this contrasts with travellers from China’s major cities, who better understand that the conflict area is some distance from Bangkok.

She cited an example from last week, when tour operators had to postpone the first three charter flights out of a planned 13 on the Haikou-Udon Thani route. The flights were fully sold, but after border clashes broke out, some tourists became confused by the similar-sounding names of Udon Thani and Ubon Ratchathani, which borders Cambodia, prompting delays in travel plans.