BANGKOK, Thailand – Thailand’s tourism industry enters 2026 at a complex and delicately balanced moment. The long-anticipated rebound in Chinese arrivals has fallen short of official forecasts, while breaking news of a virus outbreak in India and Nepal now threatens to disrupt one of Thailand’s fastest-growing source markets. Together, these developments point to a tourism sector moving beyond recovery and into a period of structural adjustment.
The numbers tell a sobering story
The Tourism Authority of Thailand originally forecast around eight million Chinese arrivals for 2025, expecting a strong post-pandemic recovery supported by restored air capacity. In reality, Chinese arrivals reached approximately 5.5 million, a shortfall of about 2.5 million visitors and a decline of roughly 30 percent year on year. Overall foreign arrivals fell by 7.2 percent to 32.97 million, marking the first annual decline since the pandemic years and remaining nearly 20 percent below the 2019 peak. Those headline figures, however, mask an important structural shift.
China a forecast miss but a segmented market
At the Thailand Tourism Forum held recently at The Athenee Hotel in Bangkok, industry operators acknowledged that the expected rebound from China has not materialised as anticipated. Yet discussions also revealed a more nuanced reality. The downturn is concentrated largely within the mass tour group segment, with budget two- and three-star hotels, high-volume coach tours and low-margin group travel operators most affected.
These travellers traditionally arrive in large numbers, follow structured itineraries and generate limited discretionary spending beyond standard sightseeing activities. By contrast, the four- and five-star market presents a different picture. Independent travellers, couples and small private groups from China continue to travel, while high-net-worth visitors remain active. Premium hotels and luxury resorts report occupancy levels broadly consistent with previous years. In other words, the Chinese market has not collapsed. It has segmented, and that distinction is critical.
A combination of factors — including safety perceptions linked to regional scam centre reporting, geopolitical anxiety following the Thailand–Cambodia border tensions, a strong baht reducing Thailand’s appeal as a budget destination, and flooding in southern regions — has disproportionately affected mass tourism. These issues have had far less impact on affluent travellers or high-end FIT visitors.
Seen in this context, the current slowdown may represent less a collapse than a structural shift away from low-yield volume tourism toward higher-value demand. Ironically, this aligns with one of the Tourism Authority of Thailand’s long-standing strategic goals: moving from volume to value. In practice, however, this transition appears to have occurred more by circumstance than deliberate policy. The retreat of low-yield mass tour groups has effectively upgraded market quality, even if it was not the result of targeted repositioning.
This does not lessen the immediate pressure faced by mid-scale and budget operators, but it does change how the challenge should be understood and addressed.
India and Nepal a new and potentially more serious risk
Just as Thailand hoped for stabilisation in 2026, a new external risk has emerged. Reports of a Nipah virus outbreak in southern India, particularly in Kerala, with suspected cross-border cases in Nepal, have raised fresh concerns.
Nipah is a rare but serious zoonotic disease transmitted from animals to humans and capable of spreading through close human contact. Health authorities have confirmed multiple fatalities, with past outbreaks showing fatality rates between 40 and 75 percent. Localised restrictions, school closures, quarantine measures and contact tracing efforts are already under way.
First and foremost, this is a human tragedy. The thoughts of the tourism industry must be with the families and communities affected. For Thailand, however, the implications are significant. India has become one of the country’s most important growth markets in recent years, helping offset weaker performance from China. Any prolonged disruption to outbound travel from India could remove one of the few remaining engines of short-term demand growth.
There is currently no specific antiviral treatment or antidote for the Nipah virus, with care remaining largely supportive. This makes early detection, isolation, contact tracing and international cooperation especially important. Thailand’s experience during the coronavirus pandemic demonstrated the heavy economic and social cost of delayed action, underscoring the need for a measured but proactive response.
Without creating panic or unnecessary alarm, Thailand should work closely with Indian and Nepali authorities through enhanced health screening, transparent public communication, medical preparedness and early containment protocols. Supporting India’s travel and tourism sector during this period will also be important, as confidence will depend on a strong, science-led response once the outbreak is contained.
If Covid taught the industry anything, it is that delay and denial are far more damaging than early, coordinated action. Thailand must not repeat past mistakes.
Strategic implications for 2026
For policymakers and industry leaders, the strategic outlook has become more complex than a simple narrative of waiting for China’s return. The high-end Chinese market remains resilient, and independent travellers continue to visit, but the low-yield mass segment appears structurally weaker rather than temporarily suppressed.
At the same time, India — until recently one of Thailand’s strongest growth stories — now faces a health-related uncertainty that could materially affect outbound travel patterns in 2026. Against this backdrop, the government’s target of achieving a 10 percent increase in foreign arrivals appears increasingly ambitious.
The challenge ahead is not to pursue volume for its own sake but to manage a careful transition. Thailand remains one of the world’s most compelling tourism destinations, with unmatched strengths in hospitality, cuisine, wellness, natural beauty and urban culture. The opportunity lies in consolidating higher-value tourism, diversifying source markets and building resilience in a sector that remains highly exposed to external shocks.
Chinese New Year 2026 will serve as an important test. If arrivals remain soft in the mass segment but stable at the premium end, it will confirm that Thailand’s Chinese tourism future is shifting from volume toward value. At the same time, developments in India and Nepal may determine whether 2026 becomes a year of stabilisation or another period of uncomfortable adjustment for the industry.
About the Author
Andrew J. Wood has lived in Thailand since 1991. He is a former Director of Skål International and a Past President of Skål International Asia, Past President of Skål International Thailand, and a two-time Past President of Skål International Bangkok. A former hotelier with senior management experience at leading hospitality groups including Shangri-La, Minor International, Landmark and Royal Cliff, he writes regularly for international travel and hospitality publications. His work focuses on tourism trends across Asia, sustainable tourism development, and the future of travel and hospitality in the Asia-Pacific region.
