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Luxury hotels across Thailand—from Andaman Sea beach resorts to Bangkok’s iconic riverside properties—are offering steep discounts to attract local guests, as the usual stream of international tourists slows amid travel disruptions linked to the U.S.-Israel conflict in Iran, Bloomberg reports.

Thai residents and expatriates can now book rooms at rates up to 70% off. For instance, a stay at Mandarin Oriental, Bangkok, the city’s historic riverside hotel, is now under $300 per night, including butler service and breakfast. Meanwhile, a beach resort near the limestone cliffs of Railay Beach offers two-story accommodations starting at $430 a night—almost half the regular rate—on a former coconut plantation.

Flight cancellations and airspace closures, particularly on Europe–Asia routes vital for Thailand, have made travel more complicated and expensive, causing a decline in visitor numbers. Arrivals from Europe and the Middle East are already 16% below normal just weeks into the conflict.

Tourism accounts for roughly 20% of Thailand’s economy, and a prolonged slowdown would hit a sector still recovering from the pandemic. Officials had hoped for 37 million foreign visitors this year, an 11% increase over 2025, but that target now seems uncertain. As of mid-March, 7.9 million tourists had visited, with China, Malaysia, and Russia topping the list of source countries. Authorities also warn that sustained oil price increases could further curb demand.

Even in the luxury segment, where travelers are usually less price-sensitive, the recent markdowns signal softer demand. Room rates, which rose steadily over the past three years, are now easing due to new supply—particularly in Bangkok—and expectations of lower interest during the World Cup, as many choose to watch matches from home.

Similar patterns are emerging internationally. In Dubai, high-end hotels are cutting rates and promoting staycation packages for residents, while travel operators worldwide are offering promotions and alternative options as long-haul demand weakens.

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