The Thai government has reduced its 2026 international arrivals forecast to 33 million, a significant drop from the previous projection of 36.7 million. The revised target for 2027 is set at “at least 33 million,” indicating that the lower growth expectations will persist into next year. This adjustment highlights a growing disconnect between official demand projections and the aggressive expansion plans by hotel developers and airlines.
Arrivals Fall Short of Targets
International visitor numbers have struggled to meet expectations this year. Between January 1 and October 17, arrivals reached 24.4 million, representing a 4.1% decline compared to the same period last year. The current daily pace of approximately 69,000 visitors is far below the roughly 114,000 daily arrivals required to achieve the original annual target. According to Amadeus data, forward bookings for the fourth quarter show a 2.8% year-over-year increase. While this signals improving demand, it is insufficient to close the gap created by the year-to-date shortfall.
Hotel Supply Continues to Grow
Despite the weakening arrivals outlook, the supply of new hotel rooms is expanding rapidly. At the end of June, Thailand had 167 hotel projects in the pipeline. Marriott International recently signed seven new properties with FICO Corporation, further adding to the inventory. The expansion is particularly concentrated in Phuket, where 30 hotels with a total of 5,517 rooms are under development. About 40% of these new rooms are scheduled to open in 2027.
The impact of this oversupply is uneven across the country. Bangkok’s luxury segment is showing resilience. Greg Condon from Cushman & Wakefield noted that luxury guests are less sensitive to financial pressures. He expects new luxury openings in the capital to support room rates. However, Bangkok’s overall third-quarter RevPAR fell 5.3% from the previous quarter to 2,532 baht. In contrast, Phuket is facing more direct pressure. Luxury and upscale occupancy in the resort city dropped to 80% in the first half of the year from 84.1%, with average daily rates declining by 4%.
Airlines Target New Markets
Air carriers are also adjusting their strategies to find new sources of demand. LOT Polish Airlines resumed service to Bangkok in October. Belavia has added flights from Minsk to both Bangkok and Phuket, aiming to tap into Eastern European markets that currently contribute relatively few visitors to Thailand. These moves suggest that the industry is looking beyond traditional source markets to fill the new capacity.
The test for Thailand’s tourism sector is whether resilient luxury demand and these new source markets can deliver the returns that investors expect. The current mismatch between supply and demand raises questions about the sustainability of the current expansion pace.
Source: Skift
