Baht appreciation against a weakening yen has influenced travel spending between Thailand and Japan this year.
Thai tourists have always loved to visit Japan, and the favourable exchange rate has encouraged them to flock to the islands this year. However, Japanese visitors to Thailand face a noticeable increase in travel costs.
Thapanee Kiatphaibool, governor of the Tourism Authority of Thailand (TAT), said baht appreciation has emerged as one of the most crucial factors denting tourism growth this year, along with an unsafe image, global economic uncertainty, and Thai-Cambodian borders skirmishes.
She said the baht has strengthened against the US dollar and Chinese yuan by 7% and 4%, respectively, this year.
According to TAT, the Japanese post-pandemic economic recovery has been slow because the border reopening was delayed until 2022.
The yen has continued to weaken, shifting from ¥3.51 per baht in 2019 to ¥4.61 in 2025, an increase of roughly 30%.
This movement influenced market sentiment on the prices of tourism-related products and services in Thailand, said Ms Thapanee.
However, the currency is not the sole reason for the sluggish growth, said Mathurot Watanakomen, director of TAT’s Osaka office.
The Japanese inbound market still posted growth of 15-18% in the first quarter of this year, but momentum dropped sharply following the March 28 earthquake, which caused the collapse of a building under construction.
This was followed by tensions along the Thai-Cambodian border from June to July.
Ms Mathurot said the Japanese market is highly sensitive to safety concerns and tends to respond with heightened caution. Once those concerns ease, tourist flows typically rebound quickly.
SLOW RECOVERY
In 2019, Japanese arrivals peaked at 1.7 million, then declined during the pandemic.
Arrivals to Thailand did not surpass 1 million again until last year.
A positive factor this year is aircraft seat capacity rose 8.5% to 3 million, connecting Thailand with five Japanese cities: Tokyo, Osaka, Fukuoka, Nagoya and Sapporo.
Starting from Dec 1, Thai AirAsia X plans to launch flights to Sendai, a long-awaited route among Japanese tour operators, said Pattaraanong Na Chiangmai, deputy governor of international marketing for Asia and South Pacific at TAT.
In addition to the strong baht, she said fierce competition from other destinations also contributed to the slow recovery of the Japanese market.
Of the 13 million Japanese outbound travellers in 2024, Thailand was the No.4 destination behind South Korea, the US and Taiwan, which attracted 3.22 million, 1.54 million and 1.17 million visitors respectively, according to the Japan National Tourism Organization.
Ms Pattaraanong said TAT still aims to attract 1.25 million Japanese visitors this year by targeting new segments such as millennials, Gen Z, students, and “Oshi-katsu” fans of “Thai Boy Love” TV series.
The key segments to maintain include business-plus-leisure travellers, women, active seniors, and sports enthusiasts, particularly golfers and marathon runners, she said.
As of Sept 18, arrivals from this market tallied 767,923, up 5% year-on-year, with an average stay of 6.04 nights and spending of 39,108 baht per trip.
During the Tourism Expo Japan held Sept 25-28 in Nagoya, the TAT expanded its reach to other regions beyond the bustling Kanto area, home to Tokyo, seeking to capture more high-spending tourists, including professionals, retirees and families.
Ms Mathurot said despite a weak yen and high living costs in Japan, potential remains among untapped segments, such as those who have never held a passport.
She said the Japanese government is promoting outbound travel to encourage cultural exchange and global experiences, supporting tour operators and airlines that facilitate international travel.
Ms Mathurot said the three TAT offices in Japan continue to work to expand the first-time and youth traveller segments, especially students and Gen Z.
The agency partnered with Thai professors teaching in Japanese schools and universities to organise study trips to Thailand and promote Thai culture among students.
However, she said this segment faces stiff competition from Vietnam, which offers fresh and affordable tourism products that appeal to younger travellers.
WORLD EXPO BOOST
From April 13 to Oct 13 this year, many Japanese tourists opted for domestic travel as Japan hosted the World Expo 2025 in Osaka, one of the world’s largest events.
In the first five months of the expo, the Thailand Pavilion, hosted by the Public Health Ministry, welcomed 1.5 million Japanese and international visitors.
Ms Thapanee said TAT was allocated a budget of 978,280 baht to organise a temporary exhibition alongside the Thailand Pavilion from Sept 15-29, showcasing 20 low-carbon travel routes in Thailand.
The exhibition also featured workshops on traditional Thai paper crafts, allowing Japanese visitors to engage directly with Thai culture.
Looking ahead to the next expo in Riyadh in five years, she said TAT plans to nominate itself to host the Thailand Pavilion.
The event offers a prime opportunity to promote Thai tourism to more than 40 million expected visitors in Saudi Arabia, an emerging market for Thailand in the Middle East, said Ms Thapanee.
She said she is confident TAT would be able to design an exhibition aligned with the “Foresight for Tomorrow” concept.