Thailand weighs 450-baht tourist fee to build major tourism fund

Thailand is moving closer to introducing a 450-baht fee for foreign tourists, with the government aiming to create a new source of funding worth more than 10 billion baht a year to support visitor insurance, tourism infrastructure and destination development.

The proposal is currently undergoing public consultation until September 28 before being returned to the National Tourism Policy Committee for consideration and subsequently submitted to the Cabinet. The government hopes to begin collecting the fee in the first quarter of 2027.

The plan comes after more than six decades of sustained tourism growth. Thailand received a record 39 million foreign visitors in 2019 before the Covid-19 pandemic, but that expansion has also placed increasing pressure on natural resources, major destinations and local communities.

The proposal is intended to provide a dedicated source of revenue for restoring and upgrading tourism infrastructure as Thailand seeks to move away from relying primarily on visitor volume and towards higher-quality, more sustainable tourism.

Foreign visitors to pay 450 baht

Thailand has studied a foreign tourist fee since 2020, with the proposed model revised several times to reflect changing economic conditions and tourism costs.

Under the current draft, foreign tourists would pay 450 baht per person, regardless of whether they eventually enter Thailand by air, land or sea.

Several categories would be exempt, including royal guests and official guests of the government, holders of diplomatic and official passports, foreign nationals with work permits, border-pass holders, transit passengers, crew members and children under two.

Visitors who pay the fee would be able to enter and leave Thailand multiple times within a 30-day period without paying again, provided they remain covered by the insurance protection linked to the levy.

Collection would initially apply to arrivals by air. Land and sea arrivals would be brought into the system later.

Natthriya Thaweevong, permanent secretary for tourism and sports, said the first phase would take effect 180 days after the relevant announcement is published in the Royal Gazette.

Land and sea collection would follow around 360 days later, allowing additional preparation time to prevent congestion at busy border crossings, particularly those serving large numbers of Malaysian travellers.

Authorities are also considering arrangements for frequent border crossers under which one payment could cover several entries during the period covered by the traveller’s insurance policy.

Study initially pointed to fee above 490 baht

Natthriya said the latest study examined economic conditions, inflation and associated costs and calculated that an appropriate underlying rate would exceed 490 baht.

However, the proposed charge was reduced to 450 baht, or about US$15, to avoid imposing an excessive burden on international visitors.

That represents an increase from an earlier framework under which the government had considered charging 300 baht for air arrivals and 150 baht for visitors entering by land or sea.

Air arrivals alone could generate more than 12bn baht

The scale of the proposed fund could be substantial.

Based on an estimate of around 35.4 million foreign arrivals in 2027, the report said collecting the levy initially from air passengers, who account for more than 80% of international arrivals, could generate more than 12 billion baht for the Tourism Promotion Fund.

Once collection covers air, land and sea arrivals, annual revenue could rise to around 15 billion baht.

A separate calculation in the study, based on 35 million tourists and projected foreign tourism revenue of 1.65 trillion baht, put potential fee revenue at 15.897 billion baht.

The study estimated that the levy could reduce arrivals by around 70,000 visitors, resulting in an estimated 3.32-billion-baht loss in tourism revenue.

After taking that impact into account, the calculated net benefit would remain about 12.577 billion baht.

Fund to cover insurance and destination development

Revenue from the levy would be channelled into tourism development rather than the general state budget.

The proposed fund has three principal purposes.

The first is to provide insurance protection covering tourists’ safety and health needs. The source noted that this could also reduce the burden on the state, which currently spends hundreds of millions of baht each year assisting foreign visitors involved in accidents when their own insurance does not provide sufficient coverage.

The second purpose is to develop tourism destinations and create new visitor experiences.

The third is to finance research, meetings and human-resource development across the tourism sector.

Weerasak calls for open oversight of fund

Weerasak Kowsurat, former tourism and sports minister and chairman of the advisory team to Deputy Prime Minister Suphajee Suthumpun, argued that a 450-baht charge should not significantly affect most foreign visitors because similar tourism levies are already used in many destinations overseas.

He said the measure would create a major off-budget source of tourism funding and could give Thailand a sizeable dedicated tourism fund for the first time.

However, Weerasak called for unusually high levels of transparency in managing the money.

He proposed an “Open Government” model with a second oversight body made up of stakeholders who could follow the fund’s expenditure and budget-management process at every stage.

He even suggested that meetings could be broadcast by camera to allow the public to observe decisions over how the money was being used.

Weerasak acknowledged that Thailand could lose some price-sensitive visitors as a result of the levy.

However, he argued that improving the quality of tourism supply would help sustain demand.

The policy approach therefore reflects a willingness to accept some reduction in price-sensitive tourism in exchange for additional resources to improve destinations and raise overall tourism quality.

Thailand studies six international tourism-tax models

Thailand has examined tourism levies in 15 countries and territories, grouping overseas approaches into six broad models.

The first is a percentage-based accommodation levy, where the tax rises according to the room price.

The study cited Amsterdam, Chicago and Berlin as examples. Amsterdam was listed with a rate of 12.5%, while Berlin was cited at 7.5% of the net room price. Chicago’s overall accommodation-related taxes were reported at considerably higher levels depending on the property type.

The second model is a fixed fee per person per night, common in Europe because it is comparatively straightforward to administer and allows authorities to forecast revenue.

Examples cited included Paris, where fees vary according to accommodation category, Rome, Barcelona and Kyoto.

Barcelona also places a ceiling on the number of nights subject to the levy.

A third approach is a fixed charge per room per night, which the study described as more family-friendly because the fee is applied to the accommodation rather than every individual guest.

Examples included Greece, Iceland and Malaysia, where the tourism tax applies to foreign passport holders.

Bali, New Zealand and Venice use trip-based charges

A fourth model involves a one-off charge for each trip.

Bali was cited for its visitor levy collected through the Love Bali system, although the study noted problems including digital-system disruption, fraudulent websites, uneven enforcement and potential bottlenecks.

New Zealand was presented as an example of a more integrated collection system tied to electronic travel authorisation or visa procedures, reducing administrative costs and the risk of revenue leakage.

Venice, meanwhile, uses a charge aimed specifically at day visitors as part of efforts to manage crowding.

The fifth category covers other forms of collection, such as high daily levies aimed at limiting visitor numbers, departure taxes incorporated into air tickets and travel-authorisation fees linked to immigration systems.

The sixth consists of special-purpose mechanisms designed to achieve particular tourism-policy objectives.

The study cited Bhutan’s Sustainable Development Fee as an example of using tourism charges to favour higher-value travel over visitor volume.

It also referred to departure taxes and electronic travel-authorisation systems, including the UK’s Electronic Travel Authorisation and the European Union’s European Travel Information and Authorisation System.

Payment system remains unresolved

Although the proposed rate has been set at 450 baht in the draft, Thailand has not yet reached a final decision on how visitors would actually pay.

The framework allows several possibilities: including the fee in the ticket price, collecting it through a website or mobile application, accepting payment through kiosks or mobile devices, or using another method approved by the fund’s management committee.

The government would prefer to incorporate the fee into airline tickets because that would offer the most seamless experience for travellers.

However, airlines have been reluctant to take responsibility for collection because their systems would need to distinguish between foreign visitors who are liable to pay and Thai passengers who are not.

The issue is further complicated by Thai nationals living overseas who hold both Thai and foreign passports.

Airlines are concerned that errors in identifying passengers could create operational problems, even if the government compensates carriers for handling the collection.

If an agreement with airlines cannot be reached, other options include allowing visitors to scan and pay electronically or requiring payment through another online channel before completing the Thailand Digital Arrival Card (TDAC).

The final payment mechanism has yet to be decided.

For now, the 450-baht tourism levy remains a proposal under public consultation rather than an enforceable charge. Opinions are being collected until September 28, after which the draft will return to the National Tourism Policy Committee and, if endorsed, proceed to the Cabinet.

Source: Thansettakij