Southeast Asia’s tourism sector is rebounding from drastic declines during the COVID-19 pandemic, with countries like Malaysia, Thailand, and Vietnam reporting millions of foreign arrivals in early 2025. Regional tourists now comprise over one-third of visitors, although international tourism receipts remain below pre-pandemic levels. Despite a surge in Indian visitors and adoption of digital strategies, economic vulnerability persists due to slow recovery in markets like China. The region’s ongoing adaptation and recovery strategies continue to shape its tourism outlook. Further details follow.
Although tourism has long served as an essential economic driver across Southeast Asia, the region’s recovery from the COVID-19 pandemic remains uncertain and uneven. International visitor arrivals plummeted by 82% in 2020 and an even steeper 98% in 2021 compared to 2019, resulting in a dramatic reduction in tourism’s contribution to regional GDP, which fell by more than half in 2020. The sector’s vulnerability was further exposed as tourism receipts dropped by 78%—the steepest fall globally—while many tourism-related businesses, including 25% of Thai firms and nearly half of Cambodia’s small and medium enterprises, closed permanently.
While some signs of recovery have emerged, especially with the gradual return of European and American tourists, Southeast Asia’s main source market, China, remains considerably restricted. Chinese outbound travel is still at only 20% of pre-pandemic levels due to ongoing domestic priorities and a preference for destinations with zero COVID-19 cases. In contrast, Indian outbound travel has surged, now at 110% of 2019 levels, helping to partially offset losses from the Chinese market. Regional tourism also remains important, with 36% of visitors coming from within Southeast Asia itself. The adoption of digital technologies in tourism—such as contactless payments and mobile bookings—has accelerated in response to the pandemic, helping the industry adjust to new traveler expectations and safety requirements.
By early 2025, Malaysia led the region with 10.1 million foreign tourists in the first quarter, surpassing Thailand’s 9.55 million and Vietnam’s rapidly rising 6 million. Singapore continued to draw considerable numbers with 4.31 million arrivals. Malaysia’s ascendancy is closely linked to proactive visa reforms, including extended visa exemptions for Chinese and Indian tourists, which have made travel easier and more attractive. Visa exemption policies have played a crucial role in boosting Malaysia’s appeal and positioning it as the most visited country in Southeast Asia.
Despite these gains, the region’s reliance on international tourism remains a source of economic vulnerability. International tourists, while comprising just one-third of total visitors, contribute half of all tourism revenue, amplifying the impact of global travel disruptions.
Governments are now focusing on policies such as risk assessments, pandemic resilience, and safe travel measures to rebuild confidence and transform the sector. The future of Southeast Asia’s tourism depends on its ability to adapt to shifting source markets and changing traveler preferences amid ongoing global uncertainty.
