Thailand Reclaims Its Tourism Mojo

The country is attracting fewer visitors than pre-COVID, but its tourism sector is thriving with new offerings, savvy marketing, and government help.

- ROBERT HORN

IT'S HARD TO RESIST Thailand's pristine beaches, ancient temples, and lively nightlife. Over the past two decades, those features have lured tourists back to the country after a devastating tsunami, bouts of deadly air pollution, violent street protests, and even military coups temporarily turned them away. But history has not repeated itself after the pandemic. During COVID, the country that draws as much as 20% of its GDP from tourism shut its borders to virtually all visitors for more than a year. It reopened cautiously starting in July 2021. But tourists still have not returned in full force.

By the end of 2023, arrivals tallied 28 million, roughly 30% below the pre-pandemic record of 39.8 million.

"There are three reasons for the slow recovery," says Bill Barnett, founder and managing director of C9 Hotelworks, a Phuket-based hospitality consultancy: "China, China, and China." The country was the largest source of tourists for Thailand in 2019, sending 11 million. But just 3.5 million Chinese visited in 2023, mostly because of China's gloomy economy. Other factors turned off tourists generally, too: flight shortages, higher prices, worsening pollution, and bad publicity related to scams and crimes.

Still, tourism analysts say, lower arrivals haven't spelled disaster for the industry. Rather, they argue, COVID and its aftermath have forced the sector to innovate and foster greater efficiencies, introduce new technologies, diversify revenue streams, and launch smarter marketing campaigns. As a result, tourism-related businesses are doing better than ever. Larger hotels, for instance, are reporting higher profitability despite lower occupancy.

"COVID accelerated changes that were going to happen anyway," Barnett says. "This is a maturation of the hotel market."