by Mia Taylor
Last updated: 7:30 PM ET, Thu October 1, 2026
Thailand has long been the darling of the travel world in Southeast Asia, attracting record numbers of travelers.
But that may be about to change.
A new report from market research company Phocuswright reveals that while Thailand retained its position as Southeast Asia’s largest travel market in 2025, with gross bookings of $17.9 billion, another country is expected to soon take the lead.
Indonesia, which sat just behind Thailand in 2025 with bookings of $17.7 billion, is expected to slide into the top slot this year by a narrow margin.
Main Blue Chapel of Wat Rong Suea Ten Temple, Chiangrai, Thailand. (Photo Credit: iamdoctoregg / Adobe Stock)
A long popular destination with globetrotters, last year Thailand recorded its first decline in visitors in a decade, (excluding COVID). The country welcomed 32.97 million visitors, which amounted to a 7.23% decline over 2024, according to figures released by the Thai Tourism ministry. The country's tourism ministry has also said it expects to record between 32.6–32.7 million for 2026, which would roughly flat compared to 2025.
“With declining arrivals and weak domestic spending, Thailand's two-year tenure as Southeast Asia's largest travel market, from 2024 to 2025, is expected to end in 2026 as it is overtaken by Indonesia and Singapore,” the Phocuswright report explains.
The scale and strength of Indonesia's domestic market is helping it to overtake Thailand. Moreover, Indonesia is expected to be in a firm leadership positon by 2029 with gross travel bookings of $20.5 billion
The shift between the two countries comes during a hard year for the region as a whole. Like many other parts of the world, the U.S.- Iran war is having an impact on Southeast Asia. It drove up jet fuel prices across the region and carriers passed those costs on to travelers through surcharges and higher fares. At the same time, low-cost carriers cut routes.
Higher fares are pushing travelers, both in Southeast Asia and in other parts of the world, to stay closer to home, says the Phocuswright report.
“Expensive flights are lifting domestic travel in Malaysia and Indonesia,” the report continues. Thailand, however, is offering incentives to encourage local tourism as its inbound numbers fall.
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