Indonesia Will Become Southeast Asia's Top Travel Market
A 2026 forecast projects Indonesia to surpass Thailand in total gross travel bookings for the region.
Updated on Sept. 30, 2026 in Asia
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New projections indicate Indonesia will overtake Thailand as the largest travel market in Southeast Asia by 2026. This shift comes after total regional gross travel bookings reached $63 billion in 2025, reflecting a 6% growth rate.
Why it matters
The regional travel landscape faces pressure as rising jet fuel costs from the U.S.-Iran War drive higher airfares and route reductions. These logistical hurdles have suppressed hotel demand despite overall market expansion.
Southeast Asian travel saw $33.5 billion in air bookings and $28.4 billion in hotel bookings during 2025. Projections estimate online travel bookings will climb to $51.6 billion by 2029.
The players
Phocuswright
This travel industry research firm provides data, analysis, and consumer research for the global tourism sector.
Indonesia
This nation is an archipelagic state in Southeast Asia that is projected to lead the regional travel economy.
Thailand
This country is a major Southeast Asian tourist destination that held the regional top market position in 2025.
The details
Carriers have responded to increased fuel prices by raising fares and cutting routes throughout the region. These higher travel costs have dampened the growth of hotel bookings, which currently lag behind total air travel volume.
Timeline
2025 marked the year Thailand led regional travel with $17.9 billion in bookings.
2026 is the year Indonesia is expected to become the largest travel market.
2029 is the projected year for online travel bookings to reach $51.6 billion.
Travel Outlook
The regional market outlook follows the pattern set by the U.S.-Iran War and its subsequent impact on global energy costs. Rising jet fuel prices have fundamentally altered the travel economics of Southeast Asia by limiting connectivity.
Travelers should monitor shifting flight schedules and potential fare increases as carriers continue to adjust routes to offset fuel costs. Budgeting for higher airfare remains essential for those visiting Southeast Asian destinations in the coming years.
The takeaway
The transition of market leadership highlights how geopolitical conflicts can reorder regional economic rankings through fuel cost volatility. Travelers and investors should prioritize flexibility when planning for future trips or market expansions in this region.
Further reading
For more information on regional developments, visit the Asia travel section.
Source note: This article includes information reported by Phocuswire.
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