Vietnam’s tourism rise puts Thailand on alert

Thailand’s tourism industry remains strong, but Vietnam is rapidly emerging as the region’s most serious challenger, raising pressure on Thailand to modernise its strategy, strengthen traveller confidence and build a national digital tourism ecosystem.

The warning comes as post-pandemic tourism competition in ASEAN enters a new phase. Thailand, which drew almost 40 million foreign tourists in 2019, is now facing structural challenges as traveller behaviour changes and regional rivals move more aggressively.

Vietnam, meanwhile, has become one of the fastest-growing tourism markets in Southeast Asia, driven by strong economic growth, rising visitor numbers, infrastructure investment, digital development and more flexible immigration policies.

Yuthasak Supasorn, chairman of the Industrial Estate Authority of Thailand and former governor of the Tourism Authority of Thailand (TAT), described Thailand’s tourism performance in 2024-2025 as a difficult period of adjustment.

Although Thailand’s tourism sector recovered by 26.27% in 2024, the following year saw a clear slowdown. Foreign arrivals in 2025 stood at 32.97 million, down 7.23%, while revenue from international tourists fell 4.71% to 1.53 trillion baht.

The main factor was the sharp decline in Chinese arrivals, which dropped by 33.8% and recovered to only around 40% of pre-Covid levels. While long-haul markets improved, they could not fully offset the loss from Thailand’s key East Asian markets.

By contrast, Vietnam recorded a historic year in 2025, with international arrivals reaching 21.1-21.2 million, up 20.4% from 2024. The figure was not only a record high, but also 17.8% above Vietnam’s 2019 pre-pandemic level.

Vietnam’s total tourism revenue also passed 1 quadrillion dong for the first time, equal to about US$39 billion or 1.27 trillion baht. The performance has given the Vietnamese government a stronger base for setting more ambitious tourism targets.

For 2026, Vietnam aims to attract 25 million international visitors and generate 150 million domestic trips, with total tourism revenue targeted at 1.125 quadrillion dong, or about US$45 billion, equal to around 1.47 trillion baht.

However, Yuthasak noted that Vietnam’s success still faces structural limits because much of the growth is volume-driven rather than value-driven, with room to improve spending per head.

Thailand and Vietnam take different routes

Thailand is focusing on quality tourism through its “Up Level, Add Story, Create Value” strategy, aiming to lift total tourism revenue to 3.4-3.5 trillion baht.

The strategy includes soft-power campaigns such as “5 Must Do in Thailand”, the Destination Thailand Visa (DTV), which offers a five-year visa aimed at digital nomads and high-spending long-stay travellers, and stronger promotion of niche sectors such as wellness and MICE.

Vietnam, by contrast, is building a long-term competitiveness strategy aimed at entering the top 30 of the Travel and Tourism Development Index (TTDI) by 2030.

Its policy direction combines technology and legal reforms, including a “Strategic Dual Visa Policy” that grants 45-day visa exemption to target countries and offers 90-day e-visas to travellers worldwide.

Vietnam is also developing the “Visit Vietnam” super app in partnership with leading private-sector companies. The platform, scheduled for completion by 2027, will use artificial intelligence and blockchain to bring tourism information into one integrated system.

Five priorities for Thailand

Yuthasak said Thailand must integrate five key areas if it wants to retain its leadership position in ASEAN tourism:

Restore confidence: Thailand should crack down on grey businesses and establish a national crisis communication centre to strengthen traveller trust.

Focus on high-yield markets: The country should use tools such as the DTV and promote medical and wellness services to attract premium visitors.

Build a national digital ecosystem: Thailand needs a seamless tourism digital infrastructure to compete with Vietnam’s super app, covering accommodation bookings, transparent blockchain-based merchant ratings and cross-border digital payment systems. This would reinforce Thailand’s image as an easy and convenient destination.

Address ESG and overtourism: More tourists should be directed to secondary destinations and “hidden gem” cities to reduce pressure on overcrowded areas.

Turn rivals into strategic partners: Thailand should position itself as a regional leader by pushing for a common visa list and fast-track immigration channels for target-country travellers. This would support Thailand’s role as an aviation hub and allow the country to benefit from travellers heading to Vietnam by capturing spending through transport and related services.

Private sector says Thailand is still strong

Adith Chairattananon, secretary-general of the Association of Thai Travel Agents (ATTA), said Thailand still holds a structural lead in ASEAN tourism through its brand strength, product diversity, hospitality system and broader tourism ecosystem.

However, he warned that Vietnam has become the fastest-growing strategic competitor in the region, supported by its freshness, infrastructure investment and lower cost base.

Thailand still leads in total visitor volume and global image, with the Amazing Thailand brand widely recognised, while Vietnam is gaining attention as a fresh and good-value destination.

Adith said future tourism competition would no longer be measured only by arrival numbers. The decisive factors will be trust, safety, emotional experience, high spending and speed of adaptation.

If Thailand does not move faster, it risks losing important markets such as Gen Z travellers, free independent travellers, digital nomads and the new generation of Chinese tourists to Vietnam over the next five to 10 years.

Five ways to avoid being overtaken

ATTA proposed five areas where Thailand needs to adjust:

Stop selling only visitor numbers: New tourism indicators should focus on spending per head, length of stay, repeat visits, trust scores and safety.

Make safe destination status a national agenda: Safety should go beyond tourist police and include a Tourism Risk Command Centre, AI social listening and multilingual crisis response.

Refresh existing tourism products: Beaches, temples, food and Thai massage should be redesigned into an experience economy built around storytelling, activity-based tourism, local creators and premium routes.

Create a new generation of tourism cities: Thailand should accelerate the development of second-tier destinations such as Chiang Rai, Nan, Udon Thani, Trang, Chanthaburi, Nakhon Si Thammarat and Buri Ram. Otherwise, major tourist cities could become tired and more expensive than competing destinations.

Invest in new tourism manpower: Thailand needs a new generation of tourism workers trained in tourism, AI, languages, service design and crisis skills — a model described as “T+AI Tourism Talent”, rather than relying only on traditional guides and tour sales staff.

The message from both former policymakers and the private sector is clear: Thailand remains ahead, but the gap is narrowing. Keeping that lead will require faster reform, stronger confidence-building, better digital infrastructure and a shift from simply attracting more visitors to creating higher-value, safer and more memorable travel experiences.

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