Key points
- According to insights from research reports, operators will continue to face uncertainty in key foreign source markets, heightened geopolitical risks, and the persistent strength of the baht, all of which are dampening travel demand and compressing margins.
- At the same time, structural challenges such as shifting traveler behavior and a steady influx of new hotel supply are intensifying competition nationwide.
- Domestic demand will remain an important secondary stabilizer, especially during the low season, but its contribution is likely to be constrained by high travel costs, household debt concerns, and competition from overseas destinations.
Thailand Hotels: Mounting Headwinds for Thailand’s Hotel Industry
Thailand’s hotel sector is bracing for another demanding year in 2026 as multiple pressures converge across domestic and international markets. According to insights from research reports, operators will continue to face uncertainty in key foreign source markets, heightened geopolitical risks, and the persistent strength of the baht, all of which are dampening travel demand and compressing margins. At the same time, structural challenges such as shifting traveler behavior and a steady influx of new hotel supply are intensifying competition nationwide.
Image Credit: Thailand Hotel News
Prolonged tensions along the Thai–Cambodian border are expected to continue affecting hotels in several eastern and northeastern provinces, while climate-related disruptions and fast-changing travel trends further complicate recovery efforts. Kasikorn Research forecasts that the nationwide hotel occupancy rate in 2026 will remain flat compared with 2025, when the average stood at 71.42 percent, slightly down from 71.49 percent in 2024. However, many industry experts argue that this Thailand Hotels report may prove optimistic, suggesting that real occupancy could fall to between 68.5 and 70.2 percent as forward bookings particularly for the upcoming Chinese New Year period show very weak performance from various markets. Japan, Vietnam, Malaysia and Indonesia is witnessing a much better forward booking performance for the coming Chinese New Year period.
Provincial Performance Shows Uneven Recovery
In 2025, hotel occupancy declined year-on-year in 19 provinces, underscoring the uneven nature of the recovery. Some regions were hit by weaker international demand, others by border tensions or severe flooding that disrupted tourism activities and travel confidence.
Among top destinations, Chon Buri remained the strongest performer with an occupancy rate of 80.6 percent, though this was marginally down from 81.3 percent a year earlier. Phuket followed with 77.2 percent, slipping from 78.6 percent in 2024, reflecting softer long-haul demand and growing competition from regional beach destinations. Surat Thani, driven largely by Koh Samui, recorded an occupancy rate of 77.7 percent, down from 78.5 percent.
Bangkok, traditionally the country’s anchor market, fell to fourth place with an occupancy rate of 76.4 percent, compared with 78.8 percent the previous year. Songkhla saw one of the sharpest declines, with occupancy plunging to 69 percent from 74.8 percent, largely due to flooding in Hat Yai that disrupted both leisure and business travel.
Border Provinces Under Continued Strain
Provinces located along the Thai–Cambodian border continued to suffer from prolonged tensions, which weighed heavily on tourism confidence. Chanthaburi posted an occupancy rate of 60.5 percent, marginally down from 60.7 percent, while Ubon Ratchathani slipped to 54.4 percent from 58.1 percent. Si Sa Ket recorded 50.4 percent, down from 51.6 percent, and Trat declined to 51.3 percent from 52.6 percent. Sa Kaeo experienced the steepest drop, with occupancy falling sharply to 42 percent from 50.6 percent a year earlier.
Demand Trends and Market Realities
Despite the challenges, analysts note that Thailand’s hotel market remains structurally resilient, underpinned by its strong leisure appeal and global brand recognition. Growth, however, is expected to moderate in an increasingly competitive and rate-sensitive environment. International arrivals are likely to rise only modestly, supported by established long-haul markets and regional travelers.
Image Credit: Thailand Hotel News
Chinese outbound travel is expected to recover gradually, with a continued preference for independent and small-group travel rather than mass tours.
Meanwhile, industry insiders warn that bookings trends for the coming Year appear weak, as Japan, Vietnam, and Malaysia emerge as strong alternative destinations offering competitive pricing and perceived value.
Domestic demand will remain an important secondary stabilizer, especially during the low season, but its contribution is likely to be constrained by high travel costs, household debt concerns, and competition from overseas destinations.
Rates Hold, Supply Surges
Hotel performance in 2026 is expected to remain largely rate-led, with average daily rates proving more defensible than occupancy. However, significant new supply entering the market will make pricing discipline, cost control, and brand differentiation increasingly critical.
Revenue per available room growth is forecast to remain modest and highly location-specific. Performance gaps are expected to widen between well-positioned branded properties and those lacking a clear target segment or value proposition.
Bangkok’s development pipeline remains active, with 18 new properties totaling approximately 3,292 keys scheduled to open in 2026, largely concentrated in the luxury, upper-upscale, and upscale segments. Phuket will also see continued expansion, with 12 new hotels totaling around 3,9042 keys, anchored by large-scale resort developments.
Wellness Tourism Hopes Face Reality Check
While policymakers continue to promote Thailand as a medical tourism and wellness hub, many industry observers caution that these ambitions may fall short in the near term due to regulatory hurdles, staffing shortages, pricing issues, and rising regional competition. Without coordinated reforms and clearer positioning, the sector may struggle to deliver the high-spending demand needed to offset softer mass-market travel.
Thailand’s tourism sector in 2026 is expected to shift towards value-led growth, with a stronger focus on higher-spending travelers, wellness offerings, and improved security perceptions after a softer-than-expected recovery in 2025. Yet the year ahead will demand agility, discipline, and realistic expectations from hotel operators navigating an increasingly complex landscape.
The Kasikorn Research report on the Thai hotel industry for 2026 can be found here: https://www.kasikornresearch.com/th/analysis/k-social-media/Pages/Info395-Hotel-FB-30-01-26.aspx
For the latest on the hospitality industry in Thailand, keep on logging to Thailand Hotels News.
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