Thai tourism hit by strong baht

Thapanee Kiatphaibool, governor of the Tourism Authority of Thailand (TAT), said the Thai baht has appreciated by 7.24 percent since the beginning of the year, rising from 34.23 to the US dollar in January 2025 to 31.75 in September.

She noted that the stronger baht has inevitably influenced travel decisions, particularly among foreign tourists, as it raises the overall cost of visiting Thailand.

By comparison, the Chinese yuan strengthened modestly by 2.35 percent over the same period, from 7.1028 to 7.2963 yuan per US dollar. The Japanese yen appreciated by 5.51 percent, moving from 157.72 to 147.95 yen per US dollar, while the Vietnamese dong gained 3.38 percent, from 25,510 to 26,374 per US dollar.

The baht's appreciation, which runs counter to movements in rival tourism markets such as Japan, China and Vietnam, has prompted the TAT to assess the exchange-rate impact. When foreign travellers exchange their money for baht, they receive less, making hotel rooms, food, and entry fees appear more expensive.

TAT estimates that Thailand could lose 15-17 percent of projected tourism revenue as visitors cut back on spending or choose cheaper destinations in the region. The perception that Thailand has become a costlier option compared to competitors is also driving some Thai travellers abroad, with China, Japan and Vietnam among the preferred destinations.

Currently, the baht ranks as the second-strongest currency against the US dollar, trailing only the Swiss franc, which has gained 12.32 percent. The euro has also strengthened, rising 5.18 percent against the dollar.

The sharp depreciation of the US dollar has been a key factor behind recent currency shifts, beginning with the reciprocal tariffs imposed by the US president in April 2025. The situation worsened in July as the tariff implementation date drew closer, fuelling uncertainty over the economy amid expectations of higher living costs and rising product prices, with tariffs in some partner countries climbing as high as 20–40 percent. This, in turn, raised concerns over forthcoming US economic indicators.

Thailand's strengthening baht has had a direct impact on the US tourist market, which has shown signs of contraction since May. From January to April 2025, US arrivals to Thailand had been growing steadily, surging by 22 percent in January and by around 7–12 percent each month from February to April.

However, between May and August 2025, the market contracted by about 2 percent, coinciding with the baht's appreciation following the US tariff move in April. Immigration Bureau statistics show that between September 1-19, 2025, Thailand welcomed around 33,400 American tourists, a 5 percent drop compared with the same period last year.

As the US is considered a "super long-haul" source market with inherently higher travel costs, the weaker dollar, combined with a stronger baht, has reduced Americans' purchasing power in Thailand. This has become a critical factor in the slowdown of arrivals.

In addition to currency effects, US tourists are also worried about their domestic economy. Consumer goods imported into the United States are expected to become more expensive once old stock is depleted and new shipments, subject to higher tariffs, arrive. Thailand is unlikely to be the only country affected, as the weaker dollar is reducing Americans' outbound travel worldwide.

By contrast, European markets remain robust. Since April 2025, arrivals from the United Kingdom, France, Switzerland, Germany, Russia, Eastern Europe and Southern Europe have continued to grow, with some segments reporting double-digit monthly increases. Other key markets also appear largely unaffected, with the baht's appreciation having no significant impact so far.

However, the TAT acknowledged that these shifts may lower overall tourism revenue from the government's original target. The agency is reviewing its promotional strategies to boost incentives for inbound travel and mitigate the exchange-rate impact.

Meanwhile, outbound travel among Thais with higher purchasing power is on the rise. Many are choosing destinations where local currencies have weakened, reducing travel costs, notably Japan, Vietnam and China.