Impact of tariff hikes on tourism likely to unfold next year

Bangkok Post

09-07-2025

Tourism operators view the US's tariff policy as indirectly hampering Thai tourism in the form of reduced spending, but this impact is not expected to unfold until next year, as many tourists have already booked trips for the upcoming high season.
They have also suggested the Thai government use this opportunity to upgrade the country's tourism infrastructure, develop new attractions to remain competitive with Vietnam, and accelerate the 350-million-baht chartered flight incentive to prevent a freefall in arrivals.
Rangsiman Kingkaew, president of the Tourism Council of Phuket, said the economies of major inbound markets to Thailand, such as South Korea and Japan, had been stunned by the US's latest tariff rates, although there's still room for negotiation until the end of this month.
Trade tensions between the US and China also persist, which could result in higher living expenses and increased prices of goods for US residents, leading to a reduction in spending and a slowdown in travel, said Mr Rangsiman.
He said domestic tourism, a key driver during the low season, is also being hampered by the 36% tariff rate imposed on Thailand, as the policy would hinder the export sector and overall GDP growth.
"These developments will undeniably impact the global tourism industry," said Mr Rangsiman.
"However, the major tourism slowdown might occur next year, as many tourists, especially long-haul travellers, have already booked their trips to Thailand and Phuket for the high season."
He said that during this period of uncertainty, the government should take the opportunity to address weaknesses in the tourism sector. These include addressing the country's image in relation to safety and incomplete infrastructure projects.
Mr Rangsiman said Thailand's rivals, such as Vietnam, have been heavily investing in new attractions and infrastructure, but Thailand's tourism development has been inconsistent and continues to rely primarily on its existing charms.
Thanapol Cheewarattanaporn, president of the Association of Thai Travel Agents (Atta), said slow forward bookings, particularly from short-haul and Chinese markets, during the second half of this year could be further affected by the severe US tariffs imposed on multiple countries.
The short-haul market is a vital source for Thai tourism, typically accounting for over 70% of inbound visitors.
Mr Thanapol said it was very disappointing that the subsidy for the chartered flight programme under the 750-million-baht "Summer Blast China & Overseas Market" had not yet been officially launched.
He said many Chinese travel agents had asked Atta about this project as they are reluctant to launch tour packages to Thailand at present.
"Other countries have been consistently promoting inbound tourism, notably China, which has extended visa-free entry to more nations and continues to offer promotional travel packages," he said.