Thailand Tourism Faces Six Percent Drop In 2025 Amid Rising Competition From Japan, China, And Vietnam

Tourist numbers in Thailand fell during the first seven months of 2025, showing a 6% drop in foreign arrivals when stacked against the same months last year. The latest numbers from the Ministry of Tourism and Sports of Thailand show the kingdom welcomed 19.29 million international visitors, raising alarms about a slowdown in the tourism sector that once flew high.

Rival countries in the region—especially China, Japan, and Vietnam—are raising the stakes by upgrading travel choices and building new infrastructure. While they push tourism to the forefront of their economic plans, Thailand now has to work hard to win back its top spot in the Asian travel scene.

Japan Surges Ahead in Regional Tourism Race

While Thailand has experienced declining visitor numbers, Japan witnessed robust growth in foreign arrivals, welcoming an impressive 21.5 million international tourists within just the first six months of 2025. This represents a substantial 21% increase compared to the previous year, underscoring Japan’s resurgence as a preferred travel destination.

Japan’s strong performance significantly overshadowed Thailand’s figures of 16.69 million international visitors during the same six-month period. Japan’s growth in tourism has primarily been driven by neighbouring countries such as South Korea and China. South Korean tourists were the largest group visiting Japan, totalling approximately 4.78 million arrivals, closely followed by Chinese tourists at 4.72 million, marking a remarkable year-on-year increase of over 53%.

Thailand itself also contributed significantly to Japan’s tourism economy, ranking sixth among the countries whose citizens visited Japan. Approximately 680,500 Thai tourists travelled to Japan during this period, reflecting a healthy increase of just over 10% compared to the same timeframe in the previous year.

Japan’s success in attracting tourists is primarily attributed to its robust infrastructure, efficient transportation systems, and the yen’s relatively weaker position, enhancing affordability for international visitors.

China Reasserts Position as Thailand’s Leading Source Market

Despite the overall decline in international tourism to Thailand, China has reclaimed its position as the top tourist source market for the kingdom. Over the first seven months of 2025, approximately 2.69 million Chinese tourists visited Thailand, narrowly surpassing Malaysia, which reported around 2.66 million visitors.

The rankings of Thailand’s top ten tourist markets were rounded out by India, Russia, South Korea, the United Kingdom, the United States, Taiwan, Japan, and Laos. India stood out as the third-largest source market, bringing in roughly 1.37 million tourists, followed by Russia with approximately 1.12 million visitors.

While the volume of tourists from these markets remains significant, the overall international tourism revenue generated was lower than in the previous year. Thailand recorded approximately 895.16 billion baht in tourism revenue from January to July 2025, representing a decrease of approximately 4.22% compared to the same period in 2024.

Rising Regional Competitors Challenge Thailand’s Dominance

Thailand’s tourism sector continues to face intense competitive pressure from its Asian neighbours, notably Japan and Vietnam. Officials from the Tourism Authority of Thailand (TAT) acknowledged the increasingly challenging regional environment, highlighting Japan’s considerable advantages in tourism infrastructure and pricing competitiveness.

Vietnam, in particular, is emerging as a formidable rival with its modernising infrastructure, fresh destination appeal, and cost-effective structure across trade, labour, investment, and taxation. The combination of these advantages positions Vietnam as an attractive alternative for tourists considering travel to Southeast Asia, intensifying competition and pressuring Thailand to innovate and enhance its tourism strategy further.

Domestic Tourism Remains Resilient Amid Economic Challenges

Despite the decline in foreign arrivals, Thailand’s domestic tourism sector demonstrated noteworthy resilience. Thai residents undertook approximately 100.23 million domestic trips within the country during the first half of 2025. This represented an increase of approximately 2.49%, occurring despite ongoing economic pressures on households, including tight budgets and increased personal debt levels.

The sustained strength of domestic tourism indicates an optimistic outlook for the overall tourism market, with Thai authorities projecting that domestic tourism will continue to underpin the sector. According to estimates from Thailand’s Ministry of Tourism and Sports, domestic tourism is projected to generate approximately 1.1 trillion baht in revenue throughout the entire year, driven by an anticipated total of around 205 million domestic trips in 2025.

Strategic Response Required to Reverse Declining Trends

Thailand is at a crossroads in regional tourism and needs a bold plan to keep its place as one of Asia’s top travel spots. With both Japan and Vietnam pushing hard to attract visitors, Thai leaders will probably take a hard look at their tourism game plan. That means better roads and airports, fresh marketing ideas, and pricing that gives travellers real value.

While nearby countries keep upgrading hotels, tours, and attractions, Thailand must move fast to win both international visitors and keep locals exploring their own country. Highlighting one-of-a-kind cultural treasures, stunning nature, and adventure sports—alongside updated transportation and smoother travel—will help Thailand sharpen its edge and put growth back on the map for its tourism industry.

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