Krungthai Fears Middle East Conflict Could Drag Into Year-End, Threatening Tourism Revenue Drop to 1.33 Trillion Baht
Middle East tensions threaten Thailand's tourism revenue, with Krungthai Bank warning that prolonged conflict could slash 2025 earnings to 1.33 trillion baht as aviation disruptions deter high-spending Western and Middle Eastern visitors.
Krungthai Bank analysts warn that Middle East instability is pressuring Thailand's tourism sector through aviation disruptions, causing flight restrictions, higher travel costs, and eroding traveler confidence. The impact threatens not just overall visitor numbers but also high-spending tourists from the US, EU, and Middle East—who spend 25-80% above average and face greater aviation challenges—putting significant high-value tourism revenue at risk.
While Chinese tourist arrivals grew 15.7% year-over-year in the first four months of 2025 and have recovered for three consecutive months since February, this growth cannot offset declines from Malaysian and long-haul visitors. Malaysian tourism remains sluggish due to early-year flooding in Thailand's southern region.
Krungthai COMPASS presents two scenarios for 2025 tourism: a base case assuming conflict ends by June would yield 32.1 million foreign visitors and 1.46 trillion baht in revenue, down 2.5% and 5.2% year-over-year respectively. A downside scenario with conflict extending through year-end would see visitor numbers drop to 29.4 million and revenue fall to 1.33 trillion baht, a decline of 10.7% and 13.6% year-over-year, as airlines pass increased costs to airfare and pressures extend into the crucial Q4 high season for long-haul travelers.
