Malaysia Surpasses China to Become Thailand’s Largest Inbound Market in 2025 Amid Shifting Regional Dynamics

Malaysia Edges Ahead in Thailand’s Inbound Tourism Rankings

Thailand’s tourism sector entered a transformative phase in 2025. For the first half of the year, Malaysia has officially overtaken China to become Thailand’s largest source of international visitors—a milestone reflecting deep changes in regional travel dynamics.

According to Thailand’s Ministry of Tourism and Sports, the country welcomed around 16.6 million international arrivals between January and June 2025. However, this marks a 4.6% year-on-year decline, signalling turbulence beneath the surface as Thailand prepares for the traditionally slow third quarter.

Malaysia’s Rise and China’s Decline

Historically, China has dominated Thailand’s inbound tourism landscape. Yet in H1 2025, Malaysia delivered 2.29 million arrivals, narrowly surpassing China’s 2.26 million. While Malaysian arrivals dipped slightly by 5.59% year-on-year, China saw a dramatic 34.1% decrease, sparking concern across Thailand’s travel sector.

Several factors have fueled Malaysia’s leading position:

• Strong regional connectivity and ease of cross-border movement

• Shared cultural and geographic proximity encourages short-haul travel

• Stable traveller sentiment compared to other markets grappling with economic or safety perceptions

Conversely, Chinese travelers are increasingly cautious, citing safety concerns, rising costs, and diminishing perceptions of value in Thailand.

India and Russia Fuel Market Diversification

Beyond Malaysia and China, only India and Russia surpassed the million-visitor mark in H1 2025, offering hope for market diversification:

• India contributed 1.18 million arrivals, a robust 13.8% growth from last year, buoyed by strong air connectivity and rising middle-class travel demand.

• Russia saw 1.03 million arrivals, reflecting a 12.3% increase despite geopolitical challenges and logistical hurdles.

This trend underscores Thailand’s pivot towards attracting visitors beyond its traditional East Asian strongholds.

Challenges ahead: Low Season and Eroding Value Perception

Despite positive signals from some markets, Thai tourism operators are bracing for challenges in the second half of 2025. The Chonburi Tourism Federation, representing one of Thailand’s prominent tourism provinces, warns that Chinese outbound travel remains subdued, with Thailand losing ground to Japan and South Korea—destinations perceived as safer and offering higher value.

China’s shrinking share of Thailand’s market is tied to several issues:

• Concerns over scams and personal safety

• Rising costs in accommodation and services

• A strengthening Thai baht, eroding affordability

• Perceptions of inconsistent service quality

Such sentiments threaten Thailand’s historic reputation as a value-for-money destination, especially among Chinese budget and family travellers.

Changing Travel Behaviours in the Post-Pandemic Era

The post-COVID travel landscape has fundamentally reshaped traveller expectations. Mass tourism from China has given way to:

• Smaller, more independent traveller groups

• Higher demand for personalised experiences

• Greater sensitivity to safety, digital connectivity, and price transparency

Thailand’s tourism industry faces the challenge of adapting infrastructure, marketing strategies, and service standards to attract these new, discerning segments.

Thailand’s Strategic Pivot: Building a Broader Market Base

Thailand recognizes the risks of overreliance on any single market. Policymakers and private stakeholders are charting a path to diversify:

• Tailoring experiences for India, Russia, Malaysia, Europe, and the Middle East

• Investing in premium and niche tourism sectors, from eco-tourism to digital nomad hubs

• Enhancing safety standards, transparent pricing, and streamlined immigration procedures

Sustainable success will depend on structural reforms, not just short-term promotions. This includes:

• Addressing overcrowding at popular destinations

• Promoting lesser-known regions and secondary cities

• Implementing environmentally responsible tourism practices
  
  

The Road Ahead: Balancing Risks and Opportunities

Thailand heads into the second half of 2025 at a critical crossroads. Malaysia’s surge to the top spot reflects positive regional trends, while India and Russia offer valuable growth channels. Yet persistent declines from China and the looming low season expose significant vulnerabilities.

For Thailand’s tourism industry to thrive in this shifting environment, it must focus on:

• Delivering consistent quality and value

• Rebuilding trust among sceptical markets like China

• Innovating products and services to attract diverse traveller profiles
  
  

Thailand remains a powerhouse travel hub—but only if it embraces this new era of strategic diversification and traveller-centric experiences.

Stay Connected with the Travel Community. Follow our updates at blog.agentbazar.in and transform how you support your clients at every stage of travel.