BANGKOK – Thailand’s tourism industry, already under pressure, faces even tougher days ahead. Jetstar Asia, a major budget airline, plans to close by July 2025. Rising costs and tough competition have forced the Singapore-based carrier to stop flying. disrupting travel across Southeast Asia. Thailand, which depends heavily on tourism, now faces more economic challenges as it loses a key airline.

Jetstar Asia, part of the Qantas Group, runs 16 regional routes. These include Bangkok and Phuket, both crucial for tourists. Losing direct flights is more than an inconvenience for Thailand, where tourism makes up about 12% of the economy. The closure puts extra weight on an industry already struggling with fewer visitors and market changes.

Thailand’s tourism numbers have been dropping in 2025. Official reports show a 2.7% fall in foreign arrivals from January to May, reaching 14.36 million visitors. May saw the steepest drop yet, with a 14% decrease to only 2.6 million arrivals.

This marks the fourth month in a row of falling numbers, the worst decline since COVID-19 border closures in 2021. Even though tourism revenue inched up by 1.05% to 672.63 billion baht, the drop in tourists puts the government’s goal of bringing in 39 million visitors and 3.3 trillion baht this year at risk.

The fall is sharpest among Asian travellers, who make up most of Thailand’s tourist market. Arrivals from the region dropped nearly 11% in the first five months of 2025.

Chinese visitors, once the largest group, have stayed away due to safety worries and new options like Japan and China. Incidents such as the high-profile kidnapping of a Chinese actor in January and ongoing concerns about scams near the Myanmar border have made things worse. A strong baht has also made trips to Thailand more expensive.

Jetstar Asia’s Departure Makes Things Worse

Jetstar Asia’s closure will hit routes popular with Singaporeans especially hard. Singaporean tourists bring in significant revenue; on average, each spends 7,500 baht daily during a typical 5.5-day stay.

Without Jetstar Asia’s budget flights, these travellers could face higher ticket prices or fewer choices, which may lead some to choose other nearby destinations. Malaysia, for example, has seen more visitors thanks to new visa policies and a strong reputation for safety.

The loss of Jetstar Asia’s flights could also make life tougher for hotels and resorts. Many are already struggling with lower occupancy as fewer Asian tourists visit. In response, hotels have started chasing domestic travellers.

The Tourism Authority of Thailand (TAT) has joined forces with companies like Grab, rolling out campaigns such as “Tiew Tua Thai Suk Kan Yai Wai Jai Grab” to get locals exploring less-visited provinces with travel discounts. However, domestic tourists, who added 1 trillion baht to the industry last year, tend to spend less than overseas visitors, making it harder to fill the gap.

As international tourists decline, Thai hotels are putting more effort into attracting people from within the country. Resorts in Chiang Rai, Chiang Mai and Phuket now offer special deals and promote eco-friendly activities such as coral planting and community visits. The TAT has shifted its strategy to attract high-spending guests who stay longer, but the loss of affordable carriers like Jetstar Asia could make it harder for cost-conscious tourists to visit.

Bangkok’s famous sites, including Wat Pho, are seeing more visitors from Europe and North America. The popularity of shows like “White Lotus,” filmed in Koh Samui, has helped boost numbers from the West. Still, this increase is not enough to make up for the big drop in Asian arrivals. Spots like Banthat Thong food street in Bangkok, where Chinese tourists once made up 20–30% of daily visitors, are noticing a drop in business as revenue falls.

Efforts to Reverse the Downturn

Thailand’s government and the TAT are working to turn things around after JetStar Asia’s Announcement. The “Amazing Thailand Roadshow to Japan 2025” hopes to draw more Japanese travellers, building on last year’s 1.05 million arrivals that brought in almost 94 billion baht.

The “Thailand Summer Blast” campaign is designed to win back Chinese tourists with charter flights and cultural events. TTM+ 2025, a major travel fair in Chiang Mai, is focusing on sustainability and new technology to forge business partnerships worth an expected 4.29 billion baht.

Infrastructure projects are also in progress, including a new motorway linking Pattaya to U-Tapao International Airport. These improvements aim to make travel easier and attract more guests to the Eastern Economic Corridor, though results may take time and are unlikely to offset the immediate impact of Jetstar Asia’s closure.

Thailand’s travel industry faces a tough period. The loss of Jetstar Asia, falling numbers from Asia, and a strong baht are making recovery harder. Efforts to attract visitors from new markets, improve safety, and promote sustainable travel are underway, but losing a major low-cost carrier shows how fragile the situation is.

For a country long known for its warm welcome, restoring traveller trust and keeping prices competitive will be key to regaining its spot as a top destination.

With Singaporean tourists facing higher costs and more locals needed to support struggling hotels, the coming months will reveal how Thailand adapts to these new challenges while aiming to stay Southeast Asia’s favourite holiday spot.