Chinese Tourists Reshape Southeast Asia’s Travel Landscape

As Chinese tourists redefine travel patterns across Southeast Asia, Vietnam and Malaysia are emerging as new favorites while Thailand, long the region’s tourism powerhouse, grapples with a surprising decline. Economic headwinds, currency fluctuations, and shifting preferences among younger travelers are redrawing the map of one of the world’s most vibrant tourism markets, with significant implications for economies heavily reliant on visitor spending.

Vietnam Surges Ahead as Thailand Falters

In the first half of 2025, Thailand recorded a 4.2% drop in foreign tourist arrivals compared to the same period in 2024, totaling 16 million visitors, according to the country’s Ministry of Sports and Tourism. The decline is particularly stark among Chinese tourists, who once formed the backbone of Thailand’s tourism sector. In the first five months of 2025, Chinese visitors accounted for just under 14% of total arrivals—a significant fall from 28% in 2019 before the pandemic and 19% in 2024, as reported by Bank of America data.

Meanwhile, Vietnam has seized the spotlight with a remarkable 78% surge in Chinese arrivals during the first quarter of 2025 compared to the previous year. This growth outpaced Thailand by roughly 200,000 visitors, driven by the allure of luxury resorts and pristine beaches in coastal destinations like Da Nang and Nha Trang. Vietnam’s overall tourism growth led the region in the same period, with a 30% increase in arrivals, followed by Malaysia at 16%, while Thailand and Indonesia managed only a modest 2% uptick, per Bloomberg Intelligence figures.

“This might be the first time Thailand has been outpaced by another Southeast Asian rival,” noted Bloomberg Intelligence analysts Eric Zhu and George Ferguson in a report published on June 24, 2025.

Currency Shifts and Safety Concerns

Economic factors are playing a pivotal role in these shifting travel trends. Over the past year, the Chinese yuan has depreciated by 10.5% against the Thai baht, eroding Thailand’s reputation as an affordable destination for Chinese tourists. In contrast, the yuan has gained value against the Vietnamese dong and Indonesian rupiah, making trips to these countries more attractive for Chinese wallets, according to Zhu and Ferguson.

Beyond economics, safety perceptions are influencing choices. High-profile incidents, such as a kidnapping involving a Chinese actor in Thailand in January 2025 and a March earthquake in the region, have tarnished the image of some Southeast Asian destinations, including Thailand, Laos, and Cambodia. These countries have long battled reputations as hubs for illegal activities, and recent events have amplified traveler caution. By comparison, destinations like Japan and South Korea, perceived as safer, have seen Chinese arrivals jump by 68% and 10%, respectively, in early 2025, as per Bloomberg Intelligence data.

Changing Traveler Profiles: The ‘Special Forces’ Generation

The evolving preferences of younger Chinese tourists are adding another layer of complexity to the region’s tourism outlook. Often referring to themselves as “special forces travelers” on social media platforms like Xiaohongshu and Douyin, these younger visitors prioritize short, budget-friendly, and spontaneous trips over traditional long-haul vacations. Their itineraries are heavily influenced by viral online trends, leading to unexpected spikes in demand for offbeat locations.

“Rather than the Merlion and the Petronas Twin Towers, we now see the Chinese chasing experiences in less-traveled places,” said Chai Boon Sian, managing director and vice president of international markets at Trip.com, in an interview with The Business Times. Destinations such as Cambodia’s lesser-known spots, Brunei, Semporna in Malaysia, and Phu Quoc island in Vietnam have seen surprising interest, he added.

Chai also highlighted a shift from large tour groups, common before the pandemic, to smaller, more agile groups staying for shorter periods. This unpredictability makes it challenging to forecast a return to pre-pandemic tourism volumes. “It’s hard to say, given the changing travel preferences and group sizes,” he noted. However, he remains optimistic about long-term demand due to China’s vast population, suggesting that even amid economic challenges, travel interest will endure.

Economic Vulnerability and Spending Shifts

For countries like Thailand and Malaysia, where tourism contributes significantly to gross domestic product—around 12% and 14%, respectively, in 2024—the downturn in Chinese arrivals poses a serious economic risk. Iconic destinations such as Bangkok, Phuket, Penang, and Kuala Lumpur have historically relied on Chinese visitors for revenue. Yet, China’s domestic economic slowdown is curbing outbound travel, while those who do venture abroad are tightening their budgets.

A Bloomberg Intelligence survey on Chinese travel sentiment revealed a 23-percentage-point drop in international travel budgets since April 2024, with younger travelers showing increased caution. “Younger travelers indicated greater caution about spending, likely a reflection of the tougher economic challenges they are facing,” wrote Zhu and Ferguson in their analysis.

Interestingly, Chai observed a countertrend in spending behavior among the younger demographic. “Unlike older generations who budgeted carefully, the younger generation spends what they want,” he said. “They’re not afraid to spend first and figure out savings later.” This aligns with projections from the World Travel and Tourism Council (WTTC), which anticipates that Chinese spending on international holidays will surpass pre-Covid-19 levels in 2025, despite a shortfall of about 11% in 2024 following China’s reopening.

Regional Responses and China-Friendly Initiatives

Governments and private sectors across Southeast Asia are not sitting idle as Chinese tourist numbers waver. The Tourist Authority of Thailand has launched targeted campaigns, including joint marketing efforts with travel agencies and airlines, alongside subsidies worth up to 1.8 billion Thai baht (~US$50 million) to attract visitors during the off-season. Similarly, Malaysia extended its visa-free policy for Chinese tourists for up to 90 days through 2028, a move initiated in December 2023. This policy contributed to a rise in Chinese arrivals to 3.3 million in 2024, up from 1.5 million the previous year.

Singapore, too, introduced a 30-day visa exemption for Chinese travelers in February 2024, leveraging its linguistic familiarity with a significant Mandarin-speaking population to maintain appeal. Across the region, hospitality providers are adapting with “China-friendly” services, such as Mandarin-speaking staff, Chinese-style breakfasts in hotels, and retailers accepting payment platforms like Alipay. “Chinese tourists prefer familiar comforts,” Chai emphasized.

Private initiatives are also gaining traction. In 2024, Singapore-based Trip.com partnered with Malaysia’s tourism authority to boost Chinese visitor numbers, signaling a collaborative push to revive demand from Asia’s largest economy.

Domestic Travel Gains Ground in China

While Southeast Asia vies for Chinese tourists, a growing number are opting to explore closer to home. Domestic travel within China is booming, with less expensive road and train journeys gaining popularity. The WTTC projects domestic travel spending to reach nearly US$1 trillion in 2025, a 19% increase from the prior year, as the government encourages consumption through retail and tourism initiatives.

Bloomberg Intelligence’s survey further underscores this trend, finding that only 47% of Chinese travelers intended to venture abroad in the third quarter of 2025—typically a peak period for tourism. This figure represents the lowest in the past four quarters, while domestic travel demand remained steady at around 71%.

Looking Ahead: A Fragile Recovery

The uneven recovery of Chinese tourism in Southeast Asia raises critical questions for the region’s economic future. While Vietnam and Malaysia capitalize on favorable currency rates and targeted policies, Thailand faces an uphill battle to reclaim its status as the go-to destination. The unpredictability of younger “special forces travelers,” coupled with broader economic challenges in China, suggests that a full return to pre-pandemic levels may remain elusive in the near term.

Yet, the sheer scale of China’s population offers a glimmer of hope. As governments and businesses adapt to new travel behaviors—whether through visa relaxations, cultural accommodations, or social media-driven marketing—the region’s tourism sector could find fresh momentum. For now, the question lingers: can Southeast Asia balance these evolving dynamics to secure a sustainable rebound?