Thailand’s tourism decline has compelled businesses to rethink their strategies

Our team views this period as a valuable opportunity to enhance operations and elevate the guest experience. We’ve proactively managed costs, optimised workforce planning, and introduced value-driven offers to stay competitive while delighting our guests. We’re also investing in team development, facility upgrades, and sustainable practices that align perfectly with today’s conscious travellers. While Thailand experiences some short-term shifts, strong regional travel demand in Southeast Asia, especially from destinations like Vietnam, reinforces that the passion for travel is vibrant. We are confident that Thailand’s rich and diverse offerings will fuel a robust recovery in the near future. At Le Méridien Khao Lak Resort & Spa, our focus on agility, innovation, and delivering exceptional value positions us well. With a refreshed beachfront, exciting new recreation programmes, and unique destination experiences, we are excited and ready to welcome both returning and new guests as travel confidence soars.

At Le Méridien Khao Lak Resort & Spa, the recent tourism slowdown has inspired innovation and focus. With fewer long-haul travellers, especially from Europe and Australia, we’ve adapted by targeting domestic and regional markets, supported by the Thai Discovery campaign and government subsidies, which have boosted domestic bookings. We offer curated experiences that highlight Khao Lak’s natural and cultural beauty. Lower on-site spending has led us to redesign offerings like destination dining, wellness journeys, and local tours to be more flexible and value-driven. While streamlining operations, we remain committed to service excellence through team training and engagement, keeping morale high. Facing increased competition, we prioritise delivering unique Le Méridien seasonal programmes over discounting. Though travel trends remain unpredictable, our agility and collaboration enable us to continue providing the thoughtful, elevated experiences guests expect.

Le Méridien Khao Lak Resort & Spa is deeply connected to the local economy. A decline in tourism affects not only our resort but also the livelihoods of transport providers, farmers, artisans, and activity operators who depend on guest traffic and resort partnerships. To help ease the impact, we continue to source from local producers, support small businesses through guest referrals, and promote authentic experiences that benefit the wider community. Our sustainability programmes with the Moklen Village is a great example, offering cultural immersion for guests while directly supporting the indigenous community and preserving local heritage. Even during softer seasons, we remain committed to being a strong community partner and contributing to the long-term resilience of Khao Lak.

To accelerate recovery, stronger collaboration between the public and private sectors is essential. Enhanced marketing campaigns that promote Thailand, especially lesser-known destinations like Khao Lak, can help diversify visitor flows beyond major cities. Streamlining visa processes and expanding regional air connectivity would also make travel more accessible. At the local level, support for sustainable tourism initiatives, like our Moklen Village programme, can create meaningful experiences for guests while empowering communities. Incentives for domestic travel, training for tourism workers, and digital transformation support for small operators would also go a long way. With the right support and a unified effort, Thailand’s tourism sector has every opportunity to rebound stronger and more resilient than before.

We’re beginning to see positive momentum. Forward bookings for the upcoming high season are picking up, especially from our core international markets like Germany, the UK, and Australia. There’s also growing interest from regional travellers and long-stay guests seeking wellness, nature, and quieter destinations, areas where Khao Lak naturally excels. Flight capacities are gradually increasing, and there’s renewed confidence in travel planning. Guests are spending more time exploring cultural and sustainable experiences, which reflects a shift toward meaningful travel. While the pace may be gradual, the signs of recovery are encouraging, and we’re confident that Khao Lak is well-positioned to benefit as demand continues to rise

Ratish: The drop in tourist numbers, which honestly came as a bit of a surprise to us, has had quite an impact on our businesses. It’s not only about macroeconomic factors. It’s also about the momentum we were gaining in terms of our demographic, which leaned heavily towards tourists. We had invested significantly in marketing, branding, and other resources to attract this audience, so the slowdown really stalled our progress. For Birdies, being a relatively new brand in a challenging market, where around 60 percent of businesses in the industry face default or turnover, it has been an uphill climb to build a loyal client base. We’re also pioneering a concept that’s not typically seen here: bringing something that’s usually in the fast casual category into a new sector—affordable fine dining, effortlessly with all the sass.

Jennifer: One of the biggest challenges is forecasting product supply to minimise wastage, both for sustainability and cost control. That’s always tricky in F&B, but when the market outlook is uncertain, it’s even harder. We’ve had to adapt and innovate on the go to keep expenses in check without compromising our people. We see our team as family, so making sure they are looked after is a top priority. At the end of the day, the people are the most important drivers of any business and brand.

Ratish: Definitely. With everything happening globally—market volatility, political tensions, rising prices—customers are understandably more cautious with their spending. We’ve noticed a drop in average spend per head, and alcohol sales in particular have slowed, with some guests choosing not to drink at all. There’s also a smaller proportion of customers spending in the premium category. Interestingly, our other brand, Cholos—a quick-service restaurant—has felt less of an impact since it sits in a more affordable food category.

Jennifer: At Birdies, we’re in the premium market, and one of our core values is to never compromise on quality. We use only the highest-quality ingredients, both imported and local. So, despite rising costs, such as the significant jump in chocolate prices, which have increased by over 40 percent in the past year, we’ve been firm about not reducing our menu prices. For example, one of our most-loved desserts, the Weekend chocolate cake, is made with imported premium chocolate. Even though the cost of producing it has risen sharply, we haven’t increased the price because we believe in always charging our customers a fair rate. Lowering quality to save money or raising prices simply to offset costs would go against everything Birdies stands for. Instead, we’ve become more creative in cost management. For example, we’re now leveraging both brands together to negotiate better deals with suppliers—something we hadn’t done before but are now fully committed to.

Ratish: My outlook on the F&B market really depends on how global market volatility and political tensions play out. That said, F&B is a strong, essential industry that has been around for centuries and will stand the test of time. The question is: which sectors will thrive? Right now, I think the premium dining sector in Thailand looks quite saturated, while the Quick Service Restaurant (QSR) space or concepts sitting between fast casual and mid-range dining feel far more promising. Especially those exploring cloud kitchen models and delivery platforms, which can tap into the huge base of online users, particularly the younger generation, who are moving from dining out to prioritising convenience. Another factor that can be considered is that having a solid local and expat customer base is much more dependable than relying heavily on tourists. A repeat customer base—which we have worked hard to build at Birdies and Cholos—means that fluctuations in tourism have far less impact on our overall sales and growth, creating a more stable business model.

Jennifer: There’s plenty that can be done to uplift the F&B community. First, we believe in greater synergy and cross-collaboration between brands, even across industries. By working together, we can tap into each other’s audiences and bring more exposure to the F&B space as a whole. Secondly, the industry could benefit greatly from incubation spaces within hospitality schools, whether government-led or privately run. These spaces could nurture talent, provide real-world training, and build a skilled workforce. The lack of available skilled labour has driven up labour costs, adding pressure to already tight margins. Addressing this gap would make the industry more sustainable and allow it to grow in a healthier way.

Ratish: I completely agree with Jennifer. I’d also add that fostering stronger networks between independent operators, rather than seeing each other purely as competitors, could help the industry grow collectively. Joint events, supplier partnerships, and knowledge sharing could go a long way in strengthening the overall F&B ecosystem. The more we view the industry as a shared community rather than isolated businesses, the more resilient and innovative it can become.