Revolt puts Thailand’s ฿1,000 departure tax in doubt as hotels battle a debt crisis. Over half face liquidity problems, as COVID-era repayment deadlines threaten ownership. The Royal Orchid Sheraton faces sale after missing a ฿4.873 billion payment.
Thailand’s government may scrap its controversial ฿1,000 departure tax after fierce tourism industry opposition, sources close to Finance Minister Ekniti Nitithanpraphas suggest. Meanwhile, a deeper hotel debt crisis is unfolding. Over half of Thai hotels face liquidity problems, while COVID-era property repayments threaten ownership. Bangkok’s Royal Orchid Sheraton has already missed a ฿4.873 billion repurchase deadline. Thai Hotels Association President Thienprasith Chaiyapatranun is fighting higher visitor charges as tourism receipts remain depressed. Although the Bank of Thailand has extended pandemic-era property repurchase deadlines until December 2027, hotel owners still face mounting debts, weak revenues and fierce regional competition.
Thailand’s government is preparing to abandon its controversial ฿1,000 departure tax amid mounting pressure from the tourism industry. Sources close to Finance Minister Ekniti Nitithanpraphas suggest the proposal could be withdrawn.
The possible reversal follows disappointing foreign tourism performance and continued weakness in the Thai economy. At the same time, hotel operators face mounting financial problems as COVID-era property financing arrangements approach repayment deadlines.
Leading the industry’s opposition is Thai Hotels Association (THA) President Thienprasith Chaiyapatranun. He has warned about rising travel charges while highlighting the financial difficulties facing hotel owners. Notably, some businesses must now refinance properties transferred to banks during the pandemic. Others face mounting debts, falling occupancy and insufficient revenue to meet existing obligations.
Finance Ministry weighs withdrawal of departure tax as hotels and airlines challenge rising travel costs
The government has not formally confirmed the departure tax’s withdrawal. Nevertheless, sources close to the Finance Ministry indicate that industry objections are influencing discussions. Thailand’s weak economic performance and disappointing tourism receipts have added to the pressure. The proposal now faces uncertainty as the country approaches its important year-end tourism season.
Under the proposed legislation, passengers departing Thailand by air would initially pay ฿1,000. The charge would apply to every nationality, including Thai citizens. Furthermore, the legislation provides for a maximum charge of ฿5,000. Land and sea departures could subsequently be brought within the scheme.
Finance Minister Ekniti previously supported the proposal, partly to discourage outbound travel by Thai residents. However, industry representatives argue that the measure would also increase costs for international visitors. The proposal has therefore attracted opposition from hotels, airlines and travel agents.
Separately, Thailand has already increased another major travel charge. In June, the international airport passenger service charge rose to ฿1,120. The government is also pursuing a ฿450 foreign tourist entry levy, with implementation targeted for 2027. That measure remains subject to Cabinet approval.
Tourism operators warn combined travel charges could reach ฿2,570 as hotel liquidity problems deepen
Initially, the entry levy would apply to international air arrivals. Land and sea visitors would be included later. Together, the existing airport charge and two proposed taxes could total ฿2,570 per foreign visitor arriving and departing by air. The cumulative figure has become a central concern for tourism operators.
On 9 October, Thienprasith confirmed that the Thai Hotels Association had formally objected to the departure tax. He warned about the combined burden of higher charges on international travellers. His intervention followed months of concern about the industry’s financial condition.
Indeed, the association had issued a serious warning on 19 June. More than half of hotel operators were experiencing liquidity difficulties, according to its assessment. Rising operating costs were squeezing businesses already reporting weaker revenues. Meanwhile, some hotels were cutting staff, reducing working hours and delaying payments to suppliers.
The association reported hotel occupancy of 56% in May. It also expected occupancy to deteriorate during June. Smaller and medium-sized establishments were particularly vulnerable because of limited financial reserves. Yet substantial hotel businesses have also encountered serious debt repayment and refinancing difficulties.
COVID-era hotel rescue arrangements approach repayment deadlines five years after tourism shutdown
Behind the operating pressures lies another financial problem. Hotel owners who survived the pandemic through debt restructuring now face obligations originating five years ago. In particular, property repurchase arrangements established during the COVID-19 shutdown began reaching their original deadlines in 2026.
In March 2021, the government of General Prayut Chan-o-cha introduced an asset warehousing programme. The initiative was designed to prevent financially distressed businesses from collapsing during the pandemic.
At that point, international tourism had virtually stopped. Hotels had lost much of their revenue, although mortgage payments and other financial commitments continued.
Under the programme, borrowers could transfer mortgaged properties to participating financial institutions. In return, their outstanding debts were reduced. Crucially, businesses retained the right to repurchase their properties within an agreed period. The original repurchase window generally extended from three to five years.
Consequently, arrangements established in 2021 began approaching their final deadlines this year. For participating hotel owners, recovering their properties required substantial new financing. Some needed fresh borrowing, while others required additional investors or capital injections. The pandemic rescue arrangements had therefore created future financial commitments.
Bank of Thailand extends property repurchase deadlines after hundreds of businesses seek more time
The scheme provided immediate relief when tourism revenues collapsed. However, reopening Thailand to international travel did not guarantee that every business could meet its repurchase obligations. Banks still needed to assess borrowers’ finances, property valuations and capacity to support renewed lending.
By April 2023, the Bank of Thailand reported that the programme had approved ฿74.11 billion in assistance. The arrangements involved 500 borrowers across several sectors. Hotels were among the participating businesses, although the scheme was not restricted to tourism.
Importantly, these figures do not establish how much hotel-related debt remains outstanding in 2026. Nor do they identify the number of hotel owners unable to complete repurchase agreements. Nevertheless, the central bank’s subsequent intervention confirmed that the original repayment timetable was creating difficulties.
On 17 July, Bank of Thailand Governor Vitai Ratanakorn announced an extension of the programme’s repurchase deadline. The new deadline was set at 31 December 2027. More than 400 participating businesses were facing repurchase deadlines beginning that month.
Hotel owners gain until December 2027 to refinance properties but still face substantial repayments
In response, the central bank gave eligible businesses additional time to arrange financing and recover their properties. The extension postponed immediate deadlines but did not cancel outstanding obligations. Furthermore, it offered no guarantee that every participating business would obtain replacement financing.
Eight days later, Thienprasith welcomed the decision. On 25 July, the Thai Hotels Association president explained why the extension mattered to hotel owners. Many needed additional time to refinance, raise capital and secure investment partners.
For these businesses, recovering properties transferred during the pandemic remained a substantial financial challenge. Without sufficient financing, owners risked losing the opportunity to regain their hotels. Some could also decide against repurchasing properties because of financing costs and commercial considerations.
The central bank’s intervention therefore provided additional breathing space. However, the underlying financial commitments remained in place. Owners still needed sufficient capital to complete transactions before the revised deadline.
Royal Orchid Sheraton faces sale after ฿4.873 billion repurchase obligation goes unpaid in July 2026
On another front, a major Bangkok hotel financing dispute illustrated the consequences of a missed repurchase obligation. On 14 July, Royal Orchid Hotel (Thailand) failed to complete a ฿4.873 billion property repurchase. The transaction concerned the Royal Orchid Sheraton Hotel & Towers, a prominent riverside hotel.
Royal Orchid Hotel (Thailand) is linked to Grande Asset Hotels and Property. The hotel had previously entered a sale-and-leaseback arrangement during the pandemic recovery period. Under that agreement, the company was required to repurchase the property from the GROREIT property trust.
However, the ฿4.873 billion transaction was not completed by the contractual deadline. Consequently, the trust began preparing to sell the hotel to another investor. The missed payment placed one of Bangkok’s established hotel properties at risk of changing ownership.
The trust also faced approximately ฿1.35 billion in outstanding borrowing from the Government Savings Bank. It subsequently sought an extension of its repayment arrangements. The financial difficulties therefore involved both the failed repurchase transaction and the trust’s own borrowing obligations.
The Royal Orchid Sheraton agreement was separate from the Bank of Thailand’s asset warehousing programme. Nevertheless, it provides a documented example of a substantial hotel repurchase obligation falling due after the pandemic.
Grande Asset misses further bond interest payment as hotel property sales become part of debt plans
The financial problems extended beyond the missed July payment. On 12 October, Grande Asset reportedly disclosed another repayment difficulty. The company could not meet approximately ฿19.32 million in interest on outstanding debentures.
The bonds involved had an outstanding principal of approximately ฿635.27 million. In addition, Grande Asset had already experienced other bond payment defaults. Its restructuring plans included asset disposals to reduce debt and improve liquidity.
The company was also awaiting proceeds from property sales. These developments illustrate how debt repayment difficulties can lead to the disposal of valuable hotel assets. In the Royal Orchid Sheraton case, the missed repurchase deadline had already prompted preparations for another sale.
However, the Grande Asset case does not establish that similar defaults are occurring throughout Thailand’s hotel industry. There is no verified aggregate figure for hotel-related balloon payments falling due during 2026. Likewise, the number of hotels facing compulsory sales because of refinancing failures remains unknown.
Even so, the central bank’s July extension confirms that participating businesses needed additional time. The original asset warehousing arrangements had preserved properties during the pandemic. Five years later, some owners were still unable to complete the financial transactions required to recover them.
Tourism receipts remain below 2019 levels as hotel groups face sharply different refinancing prospects
Not every hotel group faces the same financial conditions. Larger operators with stronger balance sheets can still obtain refinancing. For instance, Erawan Group reported successfully refinancing a facility during the second quarter of 2026. Its experience contrasts with businesses unable to raise fresh capital or meet existing repayment commitments.
Meanwhile, Thailand’s foreign tourism performance has added to the financial pressures. By mid-October, international arrivals had reached approximately 23.94 million for the year. However, recent figures showed continued weakness in important visitor markets.
Weekly arrivals had fallen by 7.49%. Arrivals from ASEAN countries were also down approximately 20%. More significantly, tourism receipts were estimated to remain around ฿360 billion below their 2019 level.
These figures reveal the importance of visitor spending alongside arrival numbers. Hotels depend on occupancy, room rates and the length of guest stays. Their earnings also reflect the spending capacity and travel patterns of different visitor groups.
For example, higher occupancy does not automatically produce sufficient cash flow to meet substantial financing obligations. Equally, increasing visitor numbers does not guarantee a return to former revenue levels. Hotels carrying debt from the pandemic must still generate enough income to meet repayment commitments.
Competition from Vietnam adds to pressure as Thailand seeks higher-spending visitors and longer stays
This point is particularly important for businesses facing property repurchase deadlines. International tourism has recovered substantially since Thailand reopened. Yet the industry’s financial position remains uneven, with many operators still reporting liquidity problems.
In parallel, Thailand faces increasing competition from regional tourism destinations. Vietnam has become an increasingly important competitor for international visitors. Thailand’s tourism industry continues seeking higher-spending travellers and stronger visitor receipts.
Traditional Western visitor markets remain important, particularly for hotels serving longer-staying guests. Older Western travellers have historically supported accommodation businesses and related tourism services. However, available figures do not establish how many have stopped visiting Thailand or switched to competing destinations.
Similarly, there is insufficient evidence to quantify a change in hotel spending attributable to visitor age or nationality. What is established is the continuing weakness in tourism receipts compared with 2019. The Thai Hotels Association has also reported liquidity difficulties affecting more than half of hotel operators.
Hotel debt pressures and departure tax objections place Thai Hotels Association president in focus
As a result, the industry’s financial problems extend beyond individual properties. They include weaker revenues, rising operating expenses and continuing debt obligations. For businesses seeking refinancing, lenders must also assess their ability to meet future payments.
Against this background, the proposed departure tax has become another source of conflict between the government and tourism operators. Thienprasith’s interventions place him at the centre of both the financing debate and opposition to additional visitor charges.
In July, he welcomed additional time for hotel owners to refinance and recover their properties. Then, in October, he confirmed the association’s formal opposition to the ฿1,000 departure tax. Both interventions concerned financial pressures affecting the accommodation industry.
However, Thienprasith has not been shown to have explicitly connected asset warehousing repayments with his departure tax objections. His documented statements nevertheless establish his involvement in both issues.
Other industry representatives have also challenged the proposed departure charge. Thai AirAsia executive chairman Tassapon Bijleveld warned of potential economic losses reaching ฿150 billion. That estimate contrasts with projected tax revenue of approximately ฿45.9 billion.
Airlines and travel agents join hotels in challenging new taxes and rising costs for foreign visitors
The figures represent an industry warning rather than a confirmed assessment of the measure’s eventual economic impact. Separately, the Thai Travel Agents Association has expressed concern about higher travel costs and their effect on demand.
The departure tax would affect Thai citizens as well as foreign visitors. Consequently, opposition has extended beyond hotels to airlines and travel agents. Industry representatives have warned about the potential consequences for ticket prices, passenger demand and Thailand’s competitiveness.
The proposed foreign tourist entry levy has generated separate objections. The government has argued that the ฿450 charge would support visitor insurance and tourism-related expenditure. It has also cited unpaid medical bills involving foreign patients.
Under the proposal, insurance would provide medical and death-related cover, although final terms remain unsettled. An official consultation attracted 5,954 responses. Of those, 80.5% supported the draft scheme, while 78.3% supported the proposed ฿450 charge.
Nevertheless, industry representatives have questioned the financial assumptions behind the scheme. Thienprasith has challenged the use of approximately ฿7 billion in unpaid foreign medical bills to justify additional charges.
Proposed tourist entry levy faces questions over medical bills as Thailand’s debt pressures mount
The entry levy is expected to raise at least ฿8 billion annually after insurance and collection costs. However, Cabinet approval remains outstanding, with implementation targeted for the first quarter of 2027.
The proposed departure tax is a separate measure. Its application to Thai citizens as well as foreign visitors has intensified opposition. Furthermore, it would add another charge to international travel following the airport passenger service fee increase.
The wider economic situation has complicated the government’s calculations. Thailand’s economy remains weak, with the International Monetary Fund estimating growth of approximately 1.9% in 2026. Household debt remains high at approximately 85.2% of GDP.
Public debt has also reached around 67.5% of GDP, approaching the statutory ceiling of 70%. These conditions have increased pressure on government finances while limiting fiscal flexibility.
Tourism remains a major source of foreign exchange, employment and business activity. Accordingly, the industry’s performance carries considerable weight in economic policymaking. The government must also consider the revenue expected from new taxes alongside their potential effect on travel demand.
Finance Ministry considers retreat on departure tax while hotel owners still face refinancing deadlines
Finance Minister Ekniti previously supported the departure tax proposal. However, sources close to the minister now suggest the government is preparing to abandon it. The reported change follows strong industry opposition and disappointing tourism performance.
No formal withdrawal has been announced. Furthermore, the government has not publicly confirmed that the proposal will be cancelled. The departure tax therefore remains under consideration until an official decision is made.
For hotel owners, the financial challenges extend beyond the outcome of that decision. Eligible businesses have received additional time under the central bank’s asset warehousing extension. Nevertheless, the revised December 2027 deadline has not eliminated their financing obligations.
Owners must still secure sufficient capital to recover their properties. The Royal Orchid Sheraton case has already demonstrated the consequences of a missed repurchase deadline. Grande Asset’s subsequent bond payment problems have added another documented example of financial strain.
Hotels enter year-end tourism season with weak revenues and unresolved pandemic-era debt
The Thai Hotels Association’s June warning also remains significant. More than half of hotel operators were experiencing liquidity difficulties, while occupancy and revenues remained under pressure. Some businesses were already cutting staff and delaying supplier payments.
Meanwhile, the industry’s financial position remains divided. Stronger hotel groups can continue refinancing, while weaker operators face substantial capital requirements. The central bank’s extension has postponed deadlines for eligible businesses but has not resolved their underlying financial problems.
Thailand therefore enters the final months of 2026 with several unresolved pressures on its tourism industry. Visitor receipts remain below pre-pandemic levels, while hotel operators continue facing rising costs and outstanding debt.
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At the same time, the Finance Ministry is reconsidering a proposed tax opposed by the industry’s leading representatives. Thienprasith has already challenged additional travel charges while supporting refinancing relief for hotel owners.
The central bank has extended the timetable for recovering properties transferred during the pandemic. However, the financial obligations remain, and some separate hotel financing arrangements have already missed their repayment deadlines.
The government’s decision on the ฿1,000 departure tax is still pending. For hotel operators, the more immediate financial challenge remains securing sufficient revenue and capital to meet their obligations.
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