A possible US-Iran peace deal is unlikely to bring immediate relief to Thailand’s tourism sector, as hotels and airlines continue to face weak travel demand, cautious spending, and pressure from the low season.
Nuntaporn Komonsittivate, head of commercial at Thai Lion Air, said the airline’s average load factor for June and July has fallen from the same period last year, with many travellers becoming more careful about their budgets after spending on holidays in April and early May.
Although the tourism outlook could improve if the US and Iran sign a ceasefire agreement on Friday, Mrs Nuntaporn said airlines are not expecting fuel prices to quickly return to pre-war levels. This is despite crude oil prices having dropped close to where they stood before the conflict.
She said most airlines would need to wait until an agreement is officially signed and transport routes are fully restored before adjusting their operations. This could include increasing flight capacity or bringing back routes that were suspended during the conflict.
Thai Lion Air has already reduced seat capacity by 15% since the war in the Gulf began. Mrs Nuntaporn said the airline would continue to assess whether lower fuel prices could help bring down airfares from next month.
The hotel sector is also facing a difficult period, with La-iad Bungsrithong, a board advisor for the Thai Hotels Association, describing the 2026 low season as the weakest in several years.
She said average hotel occupancy in Chiang Mai is currently only 40-45%, while some areas have seen rates fall as low as 35%.
Unlike previous years, the slowdown has affected hotels across all segments, including five-star properties that usually continue to attract strong demand even during quieter months, Mrs La-iad said.
Three- and four-star hotels have been hit by weaker domestic purchasing power in both the leisure and meetings markets, as individuals and companies focus more of their spending on essential needs instead of travel.
Luxury hotels, meanwhile, have been affected by fewer international arrivals, particularly from Europe and the US, as high jet fuel prices have made long-haul travel less attractive for those markets.
Mrs La-iad said that even if a peace agreement is reached on Friday, many travellers are still likely to wait until the situation becomes more stable before confirming their travel plans.
Hotel operators are now monitoring bookings for July and August, a period that usually sees stronger demand from families during school holidays, as well as long-stay guests such as pensioners and digital nomads.
“The cost-of-living relief measures, such as the co-payment scheme, are unable to extend benefits to the tourism sector. They primarily help households absorb essential daily expenses rather than leaving them with additional budgets for travel,” said Mrs La-iad.
As of May 31, domestic trips had increased by 1.77% year-on-year to 86.7 million, with Bangkok, Chon Buri and Kanchanaburi recording the highest number of visits.
