Thai hotel operators are growing increasingly concerned about rising energy costs, which they say pose a greater threat than booking cancellations as the peak tourism season draws to a close. With only one month remaining in the high season, industry leaders are urging the government to stimulate domestic travel during the Songkran holiday to help sustain occupancy levels.
Kasmaporn Limpanapongthep, president of the Krabi Hotel Association, said escalating airfares and energy prices are expected to impact both travel demand and hotel operating costs. Krabi, home to around 500 registered hotels, entered the final stretch of its high season in March just as tensions in the Gulf began to escalate.
As of March 13, the province had recorded approximately 3,500 room-night cancellations, amounting to an estimated 25 million baht in lost revenue. The majority of cancellations came from travellers relying on Middle Eastern airlines, as well as film production crews—both key market segments for the region.
Ms Kasmaporn said the ongoing conflict is likely to weigh on tourism activity throughout March, with average occupancy rates projected to drop from 95% to 80% or lower. Demand is expected to remain subdued until early April, before rebounding during the Songkran festival, when occupancy could recover to around 90%, driven largely by domestic travellers opting to holiday within Thailand.
In response, many hotels have shifted their focus to markets with direct connectivity to Krabi, including Singapore, Malaysia and India, which offers direct flights from cities such as New Delhi, Mumbai and Bangalore.
“During the initial weeks of the conflict, hotels in Krabi collaborated to support stranded guests by offering discounted rates and dedicated relaxation spaces,” she said. “Some guests were under significant stress due to concerns about their families in affected areas, and in certain cases, medical consultations were arranged to help ease their anxiety.”
She added that long-haul markets are likely to face more prolonged impacts due to rising travel costs linked to higher fuel prices and weakening consumer confidence. For example, a family of four could face travel expenses of up to 400,000 baht if airfares climb to nearly 100,000 baht per person, as seen on some routes.
Hotel operators have already raised their concerns with the Tourism Authority of Thailand, calling for stronger efforts to offset declining European arrivals by attracting more visitors from Asia and boosting domestic demand, particularly through government and corporate travel.
While some hotels are turning their attention to the Chinese market, uncertainty remains over whether China will permit outbound group travel under current conditions. Ms Kasmaporn noted that Beijing has been actively promoting domestic tourism in recent years and may further prioritise internal consumption.
“The domestic market remains the most reliable pillar during times of crisis,” she said. “Rather than direct financial subsidies, targeted incentives such as tax breaks would be more effective in encouraging local travel and spending.”