BANGKOK (Bloomberg): Thailand’s luxury hotels - from Andaman Sea beach resorts to Bangkok’s riverside icons - are trying to woo local residents with steep discounts as traditionally reliable streams of foreign tourists dry up, partly due to travel disruptions from the Middle East conflict.
Thai residents and expatriates can now snap up prices up to 70% off at five-star properties where nightly rates can typically approach $1,000. A stay at Mandarin Oriental, Bangkok’s oldest hotel with a landmark riverside view, is now going for under $300, including butler service and breakfast.
Elsewhere, a beach resort overlooking the limestone cliffs of Railay Beach offers stays from $430 a night, nearly a 50% discount, featuring two-story accommodation set on a former coconut plantation.
Flight cancellations and airspace closures due to the war in Iran - especially those that affect Europe-Asia routes important for Thailand - are making trips more complicated and expensive, weighing on visitor numbers. Arrivals from Europe and the Middle East are already running 16% below typical levels just weeks into the conflict.
Tourism accounts for about one-fifth of Thailand’s economy, and a prolonged slowdown would hit a sector still recovering from the pandemic.
The nation’s tourism authority is targeting about 37 million foreign visitors this year, up more than 11% from 2025. But that goal looks increasingly shaky, and arrivals below 33 million would mark a second straight annual decline. As of mid-March, 7.9 million travelers had visited Thailand, with China, Malaysia and Russia the top source markets.
Thai tourism officials have warned that sustained increases in oil prices could further dent demand.
"A lot of cause for concern, the segment that will be more impacted is the broad mass tourism market,” Bill Barnett, managing director at consultancy firm C9 Hotelworks Ltd., said. "When we look at the numbers from last year, is Thailand going to be able to achieve that? This year’s target is certainly compromised.”
Bargain basement offers are becoming increasingly easy to find. A search for "Thai resident hotel deals” yields dozens of properties advertising lower rates. While discounts are common during the May-October rainy season and some are tied to events such as Mandarin Oriental’s 150th anniversary, the breadth of current cuts also points to softer foreign demand, echoing the pandemic period when Thailand lost tens of millions of visitors.
Even in the luxury segment, where travelers are typically less sensitive to price increases, the recent markdowns signal a shift, Barnett said. Room rates that surged over the past three years are starting to ease, partly due to new supply, especially in Bangkok, and expectations of weaker demand during the World Cup as people choose to watch the games at home.
Similar patterns are emerging elsewhere. In Dubai, high-end properties have been cutting rates and promoting staycation packages for residents as the war dents international arrivals, while tourism operators globally are offering promotions and alternative options as long-haul demand weakens.
--With assistance from Suttinee Yuvejwattana. -- ©2026 Bloomberg L.P.
