Tourism remains one of the primary drivers of economic growth in Thailand. The sector’s positive performance can be partly attributed to a number of inherent pull factors, including a welcoming culture, abundant natural resources and biodiversity, as well as relative affordability. However, infrastructure has struggled to keep up with the fast-paced growth in visitor numbers, a situation that has led to overcrowding at popular beaches and long lines at airports. To tackle these problems, officials have looked to upgrade transport links and diversify tourism offerings around the country. Recent years have also seen authorities working to reach more high-end travellers, and a number of initiatives have been introduced that aim to position Thailand as an upmarket tourism destination.


Tourism remains a key part of the local economy and is expected to become an increasingly larger part of GDP. According to the “Economic Impact 2018 Thailand” report, published by the World Travel & Tourism Council (WTTC), from 2016 to 2017 the direct contribution of travel and tourism grew from $36.7bn, or 9.2% of GDP, to $42.2bn, or 9.4% of GDP. The figures have been forecast to rise by 7.8% in 2018, and by 5.7% per annum over the next decade to reach $79.4bn, or 12.8% of GDP, by 2028. The industry also directly created more than 2.3m employment opportunities in 2017, accounting for 6.2% of the country’s total workforce. By 2028 the industry is expected to supply more than 3.63m jobs, or 9.4% of total employment.

Other metrics indicate a healthy market. International tourist arrivals to Thailand reached a record 35.4m in 2017, an increase of 8.8% from the previous year, with the Ministry of Tourism and Sports (MoTS) saying it expected that figure to reach 37.55m in 2018. The WTTC calculated visitor exports for 2017 at $59.6bn, a figure that is expected to grow by 8.9% in 2018, and by an average of 6.2% per year to reach $118.1bn in 2028. Figures from the UN’s World Tourism Organisation, meanwhile, show that Thailand was the ninth-most-popular country in the world for foreign visitors in 2016, and the second most popular in the Asia-Pacific region after China.

China is by far Thailand’s biggest market for foreign arrivals. In 2017 some 9.8m Chinese tourists visited Thailand, accounting for more than a quarter of the total number of foreign visitors that year. This was followed by Malaysia, with 3.3m visitors, South Korea (1.7m), Laos (1.6m) and India (1.4m).

It is not just foreign guests that are travelling around Thailand. In line with rising incomes, the domestic tourism market is relatively healthy, and expected to grow. In 2017 local financial institution Kasikornbank estimated that Thais undertook 156.2m domestic trips, with an overall spend of BT930bn ($26.9bn). In 2018 the number of trips taken by locals is expected grow 5.7% to reach 165.4m, generating around BT990bn ($28.7bn) in tourism-related revenues.

Regulatory Framework

Thailand’s tourism industry is overseen by the Tourism Authority of Thailand (TAT), which falls under the jurisdiction of the MoTS. TAT’s main roles are to promote Thailand as an international tourism destination, as well as to maintain tourist areas and conserve the country’s natural resources. In November 2017 Weerasak Kowsurat was appointed the minister for tourism and sports, replacing Kobkarn Wattanavrangkul, who held the post for three years. Weerasak previously served as the minister for tourism and sports in 2008, as well as the position of chairman of the Thailand Convention and Exhibition Bureau (TCEB).

To support the broader policy goals of boosting numbers and diversifying offerings, the ministry introduced a number of tourism campaigns. Towards the end of 2017, TAT launched the “Amazing Thailand Tourism Year 2018” campaign, which will run from November 2017 to January 2019, and focus on developing specific segments and offerings, including sports tourism, gastronomy, destination weddings and honeymoons, medical and wellness tourism, community tourism and leisure activities.

TAT has also introduced the “Open to the New Shades” campaign, which seeks to introduce Thailand to the next generation of world travellers, as well as provide new experiences to repeat visitors. The campaign will highlight gastronomy, arts and crafts, nature and the Thai way of life. “The ‘Open to the New Shades’ campaign, which focuses on the food in various regions and secondary cities is certainly making a great impact on diversification,” Charles Wrightman, CEO of Wrightman Corporation and vice-president of the Australian-Thai Chamber of Commerce, told OBG.

Capacity Challenge 

As visitor numbers continue to rise, the government has committed to investing heavily in infrastructure in order to ensure the country maintains its reputation as a key tourism destination. Officials at the MoTS are officially targeting a near doubling of overseas visitors to 68m arrivals within the next decade, an increase that would put huge burdens on the current infrastructure. One of the most high-profile challenges has been the huge waiting lines at Bangkok’s major airports, Suvarnabhumi Airport (SA) and Don Mueang International Airport (DMIA), which saw new arrivals in the country waiting for up to five hours to pass through immigration in 2017. That same year, both SA and DMIA were running at 40% beyond capacity to keep up with foreign arrivals. In response, officials have said they plan to upgrade both airports, building new terminals, facilities and another runway so the capital city can handle the 130m passengers it receives per year. However, work is not expected to be completed until at least 2022, meaning that, in the meantime, viable solutions will be needed.

In its 2018 position paper, the European Association for Business and Commerce (EABC) Tourism Working Group proposed possible solutions to improve the experience of visitors when they first arrive at Thailand’s main airports. It recommended a shift towards online visas to counter the problem of long immigration queues, coupled with the introduction of digital, app-based airport taxi services to remove any perception of cheating or insecurity from visitors using the regular, metered service. Although app-based taxi services legally operate in Thailand, they are restricted from picking up passengers in airport arrivals areas.

Diversified Destinations

With the rapidly growing influx of international visitors, the risk remains that Thailand’s established destinations will reach a saturation point. The popular site at Maya Bay, for example, can see up to 5000 people per day, and local tour guides say that pollution and the effects of human impact are significant problems, forcing authorities to ban tourist boats from entering the area from June 1 to September 30.

To counter overcrowding, the government is taking measures to market secondary cities to visitors, an approach that would not only improve sustainability, but also distribute the economic benefits of tourism with different parts of the country. One such initiative is The Thailand Riviera project. Approved in March 2018, the project aims to develop 528 km of coastline, including 25 beaches, 10 bays and 25 islands, in the western coastal provinces of Phetchaburi, Prachuap Khiri Khan, Chumphon and Ranong. Major policy goals associated with the project involve distributing tourism revenues to locals, improving regional transport links, and developing facilities and services to attract visitors.

Authorities have announced provisional plans for three zones, one of which will include the development of high-end attractions, and the others natural tourism spots and water sports. The cost of the project has been forecast at BT1.8bn ($52.1m). Central to the project will be upgrades to three major air links in the area, including the Hua Hin Airport in the Prachuap Khiri Khan Province, the Chumphon Airport and the Ranong Airport. There are also plans for a BT94bn ($2.7bn) high-speed railway from Bangkok to Hua Hin, and a 680-km scenic highway and bike path also linking the region to the capital city. Interest in the area is already on the rise, with the number of Thai and foreign visitors to the four provinces increasing by 4.52% in 2017, to around 14m, generating an estimated BT72.1bn ($2.1bn) in tourism-related income.

Officials have also proposed a BT1.8bn ($52.1m) four-year project in the four provinces of Samut Songkhram, Samut Sakhon, Prachuap Khiri Khan and Phetchaburi in the central plains region, involving the development of the agricultural, industrial, food and tourism sectors. There are also plans to advertise tourism destinations in the country’s south, away from the most popular and crowded areas.

“With support from the government, we are focusing more on the second-tier cities,” Supawan Tanomkieatipume, president of the Thai Hotels Association, told OBG. “There’s a lot of opportunity for tourists to discover different parts of the country. To the north, they can find a distinct culture, while in the south, they can find beaches.”

Another initiative introduced by the government is aimed at encouraging domestic tourists to travel to 55 select secondary provinces, which receive less tourism-related income than the rest of the country. Introduced in 2018, the “Go Local” campaign offers domestic travellers a tax deduction of up to BT15,000 ($430) on food and accommodation-related expenditures in these targeted provinces. If successful, the programme will be extended to international visitors in 2019.

Luxury Market

In line with efforts to diversify Thailand’s offerings, local authorities have been keen to shift the country’s reputation away from being a budget destination towards one that attracts high-end visitors. Such a shift presents both challenges and opportunities for businesses operating in the country, Pruet Boobphakam, president of Thailand Elite, a high-end travel credit card company told OBG. “As the government continues its attempts to position Thailand as a preferred destination for the affluent market, we will need to upgrade our products and services to differentiate us from other popular luxury spots.”

A report published by Allied Market Research projected the global luxury travel market to generate more than $1.54trn by 2022. “I think authorities recognise the importance of the high-end and luxury markets, and a lot of advertising campaigns have been geared towards attracting those sorts of tourists,” Wrightman told OBG.

The high-end market has been growing, with TAT promoting the segment globally using targeted campaigns. While the segment has suffered some setbacks recently, mainly due to floods that hit Bangkok, optimism remains that the market could reach its potential. Indeed, according to a report issued by global consultants Horwath HTL, in 2017 the revenue per room and occupancy rates at Bangkok’s luxury hotels grew by 8.5% and 3.1%, respectively. This is compared to the total Bangkok market, which expanded by a respective 3.4% and 1.3%.

Other high-value segments where the government will focus its efforts include medical and wellness tourism, destination weddings and honeymoon packages, and upscale sports and leisure activities, such as golf and yachting, with TAT promoting such offerings to global markets (see analysis).

Thailand is already known for the high quality of its golf courses, and some of the best known include Black Mountain Golf Club in Hua Hin, whose resident athlete and ambassador, Jazz Janewattananonm, took home the Queen’s Cup in 2018; the Chiang Mai Highlands, which was voted among the top-three clubs in Asia by the 2015 Asia Golf Awards; and Siam Country Club, which hosts the Honda Ladies Professional Gulf Association tournament each year. In 2017 some 700,000 tourists came to Thailand just to visit its courses, with only Spain and the US receiving more international golf tourists annually. “Golfers are big spenders, so the government is pushing hard to make Thailand the golf capital of the world,” Wrightman told OBG.


Thailand’s efforts to be viewed as a high-end tourism destination gained a boost when the first Michelin Guide book for Bangkok was published in 2018, featuring 98 restaurants, three of which were granted two stars, and 14 given one star (see analysis). Bangkok became the seventh city in the Asia-Pacific region to be listed, and there are plans to establish guides in other destinations. “It is encouraging that the quality of food in Bangkok is being recognised, as this should help to attract high-spending, experience-seeking tourists,” Deepak Ohri, CEO of Lebua Hotels & Resorts, told OBG.

The guide is also a timely boost for Bangkok’s street food scene – already a major draw for visitors – after the government had announced plans for a crackdown on street vendors as part of attempts to clean up the capital in 2017. However, the government appears to have reconsidered the plans after widespread criticism from local people and tourists.

Business Travel

Thailand is already a major regional centre in the meetings, incentives, conventions and exhibitions (MICE) market. The 2017 Country and City Rankings, published by the International Congress and Convention Association (ICCA), ranked Thailand 25th in the world for hosting conventions, making it the highest-ranking country of all ASEAN member states, including Singapore, which ranked 26th. In 2017 almost half of the events in Thailand were held in Bangkok, with Chiang Mai, Pattaya, Phuket, Khon Kaen, Chiang Rai, Nakhon Ratchasima Udon Thani and Songkhla among other prominent and emerging MICE destinations. As business travellers are estimated to spend an average of two to three times more than leisure visitors, the industry can potentially serve an important driver of highend tourism infrastructure.

The TCEB established a five-year plan that aims to cement the country’s position as one of the most attractive destinations for MICE tourism in Southeast Asia. Acknowledging the importance of the industry, Waraporn Sornprom, senior manager of corporate policy and strategy at TCEB, told OBG that the plan aims to improve all components of the MICE ecosystem so that the industry can develop in a holistic manner. “It’s a significant opportunity encouraged by ongoing connectivity and infrastructure development projects, the construction and renovation of venues, and the establishment of new destinations,” Waraporn told OBG.

Part of TCEB’s strategy is to raise awareness about Thailand’s ability to host large-scale events, not only in Bangkok, but elsewhere in the country. “There are many new locations that can be turned into popular MICE destinations as venues are built,” she added.

High-Tech, High-Value

The MICE industry could also benefit from the government’s Thailand 4.0 initiative, which aims to shift the economic focus away from production and more toward high-tech services. A key component of the initiative is the Eastern Economic Corridor (EEC), a $45bn project aimed at boosting investment and economic development in the country’s industrial eastern provinces of Chachoengsao, Chonburi and Ranong. The EEC has directly targeted 10 industries, one of which is high-income and medical tourism. The main aims include increasing the amount of middle-income to high-income tourists from the Asia-Pacific region; upgrading medical tourism, wellness and rehabilitation offerings; as well as promoting the area as a central venue for MICE events. In addition, the EEC’s focus on high-tech industries should attract more upscale business travellers to both Bangkok and the EEC area, according to Horwath HTL. Investors are already interested, with both the public and private sector already pledging BT1.17trn ($33.9bn) towards the project up to 2022, according to local media reports. The government is hoping new transport links and hospitality facilities will see this area emerge as a business and leisure centre that will support the growth of the MICE segment.

“The Thailand 4.0 initiative can benefit from the MICE industry,” Supawan Teerarat, vice-president of the TCEB, told OBG. “In fact, MICE is a part of a creative, high-value services cluster that can drive the development of all industries by using such events as an anchor or platform for knowledge sharing, trade and investment. Recent examples include the Annual Innovation Forums, the Smart Biz Expo, and other regional and global conferences.”

Sharper Image

Despite the country’s rapidly growing high-end segment, Thailand’s tourism industry will need to address certain challenges if it is to dispel its reputation as a backpacker’s destination. The increasingly competitive environment for hotels has encouraged a race-to-the-bottom mentality on prices, a situation exacerbated by the general lack of rating standards and the increasing presence of unregulated listings on accommodation-sourcing website Airbnb. According to the EABC, rising numbers of unregulated or unlicensed hotels are bad for the overall image of the country. Recommendations from the hotel group included strengthening the enforcement of existing rules and regulations for hotel operations, and a greater emphasis on registrations, licensing and insurance to help ensure quality standards and visible ratings.

Officials are also looking to enhance Thailand’s positive image as one of Asia’s most female-friendly destinations to build on the growing number of solo female travellers. Statistics from the MoTS showed that 52% of the 32m tourists to visit the country in 2016 were female, up from 48% in 2015 and 42% in 2012. In May 2017 TAT relaunched its “Women’s Journey Thailand” campaign, which uses a website and mobile app to offer discounts for hotels, spas, malls and restaurants to female travellers.

Better Offerings

Brand development is another key factor for Thailand. While the country is a leader in hospitality service in South-east Asia, operators need to embrace the changing tourism landscape by updating their offerings. To this end, Thailand is emphasising adventure and ecotourism. It already has about 800,000 visitors a year in this category, a number expected to reach 1m in the next few years. An estimated BT300bn ($8.7bn) is brought in by the niche market every year, according to the Thai Ecotourism and Adventure Travel Association (TEATA). In this segment, the country faces significant competition from Vietnam, Myanmar and Laos, which have both impressive natural sites as well as strong government support. The TEATA would like to see the subsector start to meet the highest level of international standards. It is working to attract both international and local tourists and expects the subsector to account for as much as 20% of the overall tourism market at some point.

Skills Development

Branching out and promoting new segments in the industry could be an important factor in tackling the country’s economic issues and providing jobs. However for this strategy to be effective requires the development of the right kind of human resources skills, especially in smaller, niche establishments. According to the EABC, hospitality graduates in Thailand look for more senior positions in management, leaving a jobs gap in entry-level jobs and forcing hotels to look abroad to find skilled workers. These places could be filled domestically, however, with the introduction of a work-study framework to enhance the skills of local and new workers through apprenticeships and on-the-job training. Participating companies could potentially receive incentives such as tax reductions and more relaxed visa regulations. Tourism operators and hoteliers should be mindful of the need to invest in training their staff visitors and offering new experiences to ensure that services are aligned with luxury products. If this aspect is lacking, then those tourists seeking high-end experiences could easily choose to travel elsewhere.


Despite challenges, the future looks generally bright for the tourism industry. The government’s commitment to growth, coupled with the country’s inherent attractions and experience as a global leader in the sector, make it reasonable to expect that Thailand will be successful in attracting an increasing number of high-end tourists. Key to this growth will be increased investment in integrated transport infrastructure to remove existing bottlenecks and create confidence for businesses considering investing in luxury developments.