Gunfire and no guests: Cambodia border clash a real threat for Thailand’s travel economy

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By ET Online

Published July 25, 2025

Thailand’s tourism industry was already on shaky ground — now, with heavy artillery exchange across its border with Cambodia, it’s facing its toughest blow yet. As the region plunges into its worst conflict in over a decade, hopes of a travel rebound risk being buried under smoke and uncertainty.

Several countries, including India, have issued travel advisories against visiting parts of Thailand. The Indian Embassy on Friday urged nationals to avoid seven provinces amid ongoing border unrest. Britain's foreign ministry also advised against all but essential travel to parts of Cambodia and Thailand.

Thailand’s tourism industry is caught in the crossfire of clashes, as accommodation cancellations surge in provinces near the conflict zone, according to The Nation, Thailand.

Natreeya Taweewong, Permanent Secretary for the Ministry of Tourism and Sports, revealed a notable decline in tourist numbers and widespread booking cancellations in Sa Kaeo Province's border districts of Aranyaprathet, Ta Phraya, and Khlong Hat.

While other parts of Sa Kaeo remain unaffected, with planned tourism and sports events proceeding as scheduled, these front-line areas are now largely devoid of visitors.

Thailand’s tourism troubles

Thailand’s tourism outlook is in such doldrums that even the so-called The White Lotus effect — a temporary boost in Western visitors inspired by the latest Koh Samui—set season of HBO’s hit show — hasn’t been enough to offset a slump in arrivals from neighboring countries.

Foreign arrivals to Thailand dropped for the fourth straight month in May, slipping 14% to 2.6 million, government data show. That’s the country’s longest streak of declines since 2021, when the Covid pandemic closed international borders.

The biggest drop came from travelers from other Asian countries, whose citizens make up the vast majority of tourists to Thailand. Regional arrivals fell nearly 11% this year through May, compared to the same period in 2024. Visits by Chinese tourists, who make up the largest group by nationality, have plummeted — nearly 1 million fewer arrivals so far this year versus 2024.

The plunge heading into the summer holiday period and beyond is causing consternation in Thailand, where tourism makes up about 12% of gross domestic product. It’s being fueled by lingering concerns about safety, with fears about the growing presence of scam centers around the Myanmar border spooking visitors from China.

Losing tourists to other Asian giants

Thailand has also in recent months contended with an earthquake that beamed images of a destroyed Bangkok skyscraper around the world, the rising popularity of Japan and China as regional tourism destinations and a strong baht that’s made it less of a value destination.

“We have lost a lot tourists to other competing countries in Asia because we didn’t tackle the negative images seriously,” Ratchaporn Poolsawadee, vice president of the Tourism Council of Thailand told Bloomberg in June. “Thailand’s tourism is resilient, but this may take months to rebound.”

Arrivals from China have fallen 33% so far this year after a scam gang’s January kidnapping of Chinese actor Wang Xing near the Thai border. Wang’s ordeal went viral in the mainland, prompting thousands of cancellations as mainland tourists opted for regional competitors including Japan and Singapore that they perceive as safer.

Visits from Malaysia, Thailand’s second biggest source of arrivals, dropped as much as 17% during the same period. Travel warnings from Hong Kong, the UK and Australia have cited concerns related to earthquakes and safety.

Flight bookings for the height of summer, June to August, show a 15% decline in Chinese arrivals compared to a year ago, according to data from China Trading Desk, which tracks the mainland tourism market.

Hotel occupancy is forecast to fall to 52% in May from 63% the month before, driven largely by the drop from China, according to a survey of nearly 140 hotel operators within the Thai Hotel Association. Daily room rates are expected to decline in the second quarter as hotels slash prices to compete for guests.

The self-branded “Land of Smiles” has publicized efforts to shut down some scam compounds and arrests following Wang’s kidnapping. The efforts come as concerns mount in the tourism industry that Thailand will miss its goal of attracting more than 39 million visitors this year, accounting for about $68 billion in tourist spending.

The ongoing clashes are set to further strain Thailand’s already struggling tourism industry.

What is happening now?

Thailand and Cambodia are at loggerheads, with clashes erupting along a disputed area near an ancient temple. The violence quickly spread to other parts of the contested border, with heavy artillery exchanges continuing for a second consecutive day.

Thailand recalled its ambassador to Phnom Penh on Wednesday and expelled Cambodia's envoy, in response to a second Thai soldier losing a limb to a landmine that Bangkok alleged had been laid recently by rival troops. Cambodia called that accusation baseless.

Both sides accuse each other of firing the first shots that started the conflict on Thursday, which have so far claimed the lives of at least 15 civilians, most of them on the Thai side.

Cambodia has deployed truck-mounted rocket launchers, which Thailand says have been used to target civilian areas, while the Thai armed forces dispatched US-made F-16 fighter jets, using one to bomb military targets across the border.

Some 130,000 people have been evacuated from border areas in Thailand to safer locations, while some 12,000 families on the Cambodian side have been shifted away from the frontlines, according to local authorities.