Knight Frank Thailand has revealed that the tourism and hotel market in Thailand in 2025 has entered a phase of normalization, with demand stabilizing at levels lower than before the pandemic, amidst continuous supply expansion and changing travel behaviors of tourists.

In 2025, Thailand is expected to welcome a total of 32.97 million international tourists, a decrease of 7.2% compared to the previous year, which is about 83% of the pre-COVID-19 peak. The market structure of tourists has clearly shifted, with Malaysia emerging as the largest source market for inbound tourists, while the number of tourists from China has significantly declined. Meanwhile, India and Russia continue to be growing markets.

Bangkok accounted for approximately 89% of its historical peak in tourist numbers in 2025, with domestic tourism playing a crucial role in supporting occupancy rates, especially during the off-peak season. However, hotels that rely on international tourists still face limitations due to an incomplete recovery.

The average occupancy rate of hotels in Bangkok has dropped to 75.7%, while the average daily rate (ADR) has decreased by 1.4%, reflecting pricing power constraints in an increasingly competitive environment. Part of the pressure comes from the influx of new supply, with 14 new hotels opening in 2025, adding over 3,200 rooms.

In Phuket, the tourism sector remains resilient, with the number of international tourists arriving through the airport increasing by 2.2% compared to the previous year. The hotel market continues to be primarily driven by room rates. However, the average occupancy rate has decreased to 76.2%, while the ADR has increased at a slower rate, indicating the emergence of a price ceiling amidst competition from both new supply and coastal destinations in the region. In 2025, Phuket saw the opening of 8 new hotels, adding over 1,300 rooms, with more new supply in the pipeline for 2026.

Knight Frank predicts that in 2026, the Thai hotel market will continue to face intensified competition, with demand growth likely to be gradual, while new supply continues to enter the market, resulting in limited growth in revenue per available room (RevPAR).

Mr. Carlos Martinez, Director of Research and Consultancy at Knight Frank Thailand, stated, “The Thai tourism and hotel market has entered a normalization phase in 2025, with demand stabilizing below previous peaks amidst continuous supply growth. Although domestic tourism has partially supported the market, the incomplete recovery of international tourists and pricing power constraints continue to pressure hotel performance, especially during the off-peak season. In 2026, market growth will be more disciplined, with operators needing to focus on revenue quality, operational efficiency, and cost management rather than quantitative expansion.”