Dark clouds over Thai tourism — A once-bustling shopping street in Chiang Mai sees fewer tourists amid safety concerns and economic slowdown. (Photo by Jetsada Homklin) PATTAYA, Thailand – Thailand’s tourism industry faced major headwinds in the first half of 2025, prompting growing concerns across the sector. A string of alarming events — including the high-profile abduction of Chinese actor Xing Xing and a devastating earthquake that caused building collapses — triggered a near 50% drop in Chinese tourist arrivals. The impact is expected to linger through mid-Q3. Adding to the woes is a global economic slowdown, forecasted to hit its lowest in 16 years, driven by retaliatory tariff hikes from the U.S. This has led global tourists to seek greater value for money, favoring closer destinations to minimize travel expenses. Meanwhile, arrivals from Malaysia, another key market, have dropped significantly due to safety concerns in Thailand’s southern border provinces amid ongoing insurgent attacks. In beach cities like Pattaya and Phuket, where low- to mid-tier Chinese and Russian tourists once filled hotel blocks and seafood restaurants, the effect has been immediate and visible. Empty tables, closed signs, and shuttered nightlife venues now pepper previously bustling entertainment areas, with operators reporting revenues down over 40% compared to the same period in 2024. Pakakrong Thepparak, lecturer at RMUTSV, noted that Thailand’s Tourism Business Confidence Index plummeted to 70 in Q2 2025 from 83 in Q1 — and even further compared to 79 in Q2 last year. She described the decline as “falling off a cliff,” with the low season arriving earlier than usual in April instead of May. Q3 forecasts are even grimmer, with the index expected to drop to 65. Business revenues across the sector have fallen sharply — averaging only 45% of pre-COVID levels in 2019. Restaurants are faring slightly better at 54%, followed by accommodations at 48%, while souvenir shops and entertainment venues are struggling at just 38%. “The current economic climate in Thailand is as severe as it was during the peak of the COVID crisis,” one expert stated. In Pattaya, long dependent on nightlife and short-haul international tourism, bar owners report foreign foot traffic dwindling by the day — with many shifting to local Thai clientele or downsizing staff to stay afloat. Chai Arunanonchai, TCT chairman, says Thailand will welcome just 33.3 million international tourists in 2025, a sharp 16.5% drop from pre-COVID 2019 levels. With Chinese arrivals stagnating and revenue still trailing, Chai predicts full recovery to 40 million visitors may not come until 2028. A closer look at business operations reveals more closures. In Q1, 97% of tourism businesses remained fully open. By Q2, that number fell to 94%, with 2% shutting down permanently, 3% closing temporarily, and 1% reducing their scale of operations. Entertainment venues saw the highest closure rate at 13%, followed by man-made attractions (9%) and souvenir shops (5%). The trend has been especially acute in Pattaya’s Jomtien Beach area, where several boutique hotels and Western-run bars have closed or are up for sale. Hotel occupancy rates also dipped, averaging 48% in Q2, down from 56% in Q1. The western region fared best at 53%, followed by the east — which includes Pattaya — at 50%. Analysts warn that smaller hotel closures are likely if the trend continues. Chai Arunanonchai, Chairman of the Tourism Council of Thailand (TCT), estimates 33.3 million international tourists will visit Thailand in 2025 — a 16.5% drop from 2019 and 6.2% down from 2024. Revenue from international markets is forecast at 1.75 trillion baht, down 8.3% from 2019. The Chinese market is expected to contribute just 4.5 million tourists and 225 billion baht in revenue this year. Looking ahead, TCT projects 34–35 million international arrivals in 2026, still below the Tourism Authority of Thailand’s (TAT) target of 36 million. TCT remains hopeful that a full rebound to the 40-million mark — the peak pre-COVID figure in 2019 — is possible by 2028.