Thailand’s Tourism Empire Under Threat: Vietnam Surges Ahead in 2025

Thai hoteliers demand emergency “war room” as rival Vietnam shatters records and steals market share

As Southeast Asia’s tourism landscape shifts dramatically, Thailand—long the undisputed king of regional travel—faces its first post-pandemic decline in international arrivals, while Vietnam surges to a historic high, redefining affordability, novelty, and momentum for global travelers and investors alike.

In 2025, Thailand welcomed 32.9 million foreign visitors—a 7.23% drop from 2024—generating about 1.53 trillion baht ($49 billion) in revenue from international spending, down nearly 5%. Key markets like China plummeted 30%, hit by a stronger Thai baht, aging infrastructure, resort saturation, and emerging safety concerns. The Tourism Authority of Thailand now targets an ambitious rebound to 36.7 million arrivals in 2026, emphasizing higher-spending, longer-stay visitors through mega-events and quality campaigns.

By contrast, Vietnam shattered expectations with nearly 21.2 million international arrivals in 2025—a 20.4% surge and an all-time record—surpassing its pre-pandemic peak of 18 million. Fueled by visa relaxations, new airports, expressways, integrated resorts, and aggressive promotion, Vietnam drew massive growth from China (over 5 million), South Korea, and especially Russia (nearly tripling). This momentum has redirected group tours and price-sensitive travelers from Thailand’s traditional strongholds like Phuket and Pattaya toward Vietnam’s central coast and emerging hotspots.

The Thai Hotels Association, led by Chairman Thienprasit Chaiyapatranun, has proposed an urgent “tourism war room”—a centralized, data-driven unit uniting government, airlines, hotels, and marketers—to counter the slide. The mandate includes real-time competitor analysis, targeted promotions in vulnerable markets like Russia and Eastern Europe, and strategies to offset Thailand’s 15-20% higher service costs. Without coordinated action, leaders warn, the gap could widen permanently, forcing Thailand into catch-up mode against a nimbler rival.

Thailand retains powerful advantages in global brand recognition, diverse offerings, and loyal repeat visitors, but Vietnam’s cost edge and fresh infrastructure signal a structural challenge. As competition intensifies, the real question for 2026 isn’t just recovery—it’s whether Thailand can reinvent itself fast enough to reclaim dominance or if Southeast Asia’s tourism crown is quietly shifting north. Investors and travel operators watching closely may find the next big opportunity lies in betting on adaptation over legacy.