Thailand’s Hospitality Sector Targets Domestic Travelers

Opportunities in Domestic Market

Thailand’s tourism industry, facing a downturn in foreign arrivals, is prompting hotel operators like Koko Global Hospitality (KGH) to focus on domestic travelers, as reported on June 12, 2025. Despite a quieter low season, KGH, which manages the Kokotel chain, sees potential in local vacationers to bolster its portfolio, maintaining optimism for a high-season rebound by year-end.

Foreign Visitor Decline

Shifting Market Dynamics

From January 1 to June 8, 2025, Thailand welcomed over 15 million foreign tourists, a 2.87% drop year-on-year, with Malaysia overtaking China as the top source market. Chinese visitors, now second, constitute 15% of KGH’s hotel guests. Emerging markets like India and the Middle East show growth, but KGH avoids reliance on any single nationality to ensure stability.

Steady Occupancy Goals

Efficient Operations Key

KGH aims to sustain a 75% occupancy rate nationwide and 80% in Bangkok for 2025, despite the tourism slump. Rei Matsuda, KGH’s founder and CEO, emphasized operational efficiency to weather the slowdown. The company anticipates Thai travelers, opting for domestic trips over international ones, will drive bookings, particularly in destinations like Chiang Mai and Pattaya.

Thai Travelers Boost Demand

15-20% of Guest Base

Thai guests account for 15-20% of KGH’s hotel bookings, with higher proportions in Chiang Rai, Hua Hin, Pattaya, and Chiang Mai. This shift mirrors trends among Chinese tourists favoring domestic travel. Matsuda noted that economic challenges may encourage more Thais to vacation locally, presenting a strategic opportunity for hotels to capture this growing segment.

Expansion in Three-Star Segment

Regional Growth Potential

KGH sees promise in the three-star hotel market, particularly in Phuket, Krabi, and Khao Lak, where demand remains strong despite Bangkok’s oversupply. The sluggish economy has led independent property owners to seek professional management, enabling KGH to expand its footprint. As of May 31, KGH manages 41 hotels with over 2,500 rooms across Thailand, Japan, and the Philippines.

Ambitious Growth Targets

100 Hotels by 2026

KGH plans to manage 100 hotels by 2026, with 75% in Thailand, 20% in the Philippines, and 5% in Japan. By 2035, the company aims for 1,000 hotels across 10 countries, capitalizing on underserved three-star markets, particularly in the Philippines, which shares similarities with Thailand. This long-term vision positions KGH as a leader in regional hospitality management.

Strategic Market Diversification

Balancing Local and Global Guests

By diversifying its guest base and expanding management services, KGH mitigates risks from fluctuating foreign tourism. The company’s focus on three-star hotels, combined with its adaptability to local travel trends, ensures resilience. As Thailand’s tourism sector navigates challenges, KGH’s strategy of targeting Thai travelers and regional growth sets a model for sustainable hospitality success.