Middle East conflict raises concerns for Thailand’s tourism sector

Thailand

Rising fuel prices and travel disruptions could reduce visitor arrivals and impact the economy

The ongoing conflict in the Middle East is causing growing concern within Thailand’s tourism industry. Officials warn that rising fuel prices and disruptions to international travel could lead to fewer visitors this year, recalling the severe downturn experienced during the COVID-19 pandemic.

Thailand, Southeast Asia’s second-largest economy, relies heavily on energy imports from Gulf countries. Around 43 percent of its energy supply — valued at roughly 43 billion US dollars in 2024 — originates from the region. Tensions around the Strait of Hormuz, a key route for oil shipments to Asian markets, are raising fears of supply disruptions and further increases in energy costs.

Rising fuel prices trigger domestic tensions

The government of Prime Minister Anutin Charnvirakul recently announced higher fuel prices, prompting panic buying across the country. Long queues were reported at petrol and diesel stations, while opposition parties criticised the government’s handling of the situation.

The broader conflict has also affected global aviation, with airlines adjusting routes and schedules while travel demand shows signs of weakening. Flight cancellations and hotel booking cancellations have been reported as uncertainty grows.

Tourism plays key role in the Thai economy

Tourism accounts for around one-fifth of Thailand’s economy. The country welcomed approximately 33 million international visitors last year, making the sector one of the most important sources of foreign revenue.

The industry was among the hardest hit during the COVID-19 crisis in 2020, when border closures and strict entry restrictions led to a collapse in international travel.

For 2026, the government had set a target of 37 million visitors. However, tourism officials warn that sustained increases in oil prices and continuing geopolitical instability could weaken travel demand.

Potential economic impact estimated at $4.6 billion

Natthriya Thaweevong, permanent secretary at Thailand’s Ministry of Tourism and Sports, told Bloomberg News that a prolonged decline in tourist arrivals could have significant economic consequences.

She estimated that the downturn could cost the Thai economy about 150 billion baht, equivalent to roughly 4.6 billion US dollars. This would represent around ten percent of the country’s total foreign tourism revenue last year.

According to Thaweevong, if the conflict continues for six months, Thailand could receive around three million fewer international visitors in 2026.

Hotels turn to domestic travelers

As international travelers cancel reservations and flights, many hotels are shifting their focus to the domestic market. According to reports, accommodation providers are offering substantial discounts to attract Thai residents as traditional streams of foreign tourists weaken.

Regional tensions continue to escalate

The situation in the Middle East has remained volatile since late February, when the United States and Israel launched a joint offensive against Iran. The conflict has since expanded, affecting global markets and aviation routes.

The tensions have also had direct consequences for Thailand. Earlier this month, a Thai-flagged cargo ship was reportedly struck near the Strait of Hormuz, leaving at least three Thai citizens missing.

The ongoing hostilities have led to drone and missile strikes in several parts of the region, including Israel, Jordan, Iraq and Gulf states hosting US military facilities, further heightening concerns about global security and economic stability.