Why Is Thailand So Cheap For Tourists? Reasons It’s So Affordable + Real Costs

Why is Thailand so cheap to visit? If you’re heading to Thailand for your next holiday, you’ll be happy to learn that you can have a hell of a good time with only a few months’ worth of savings!

I travelled around Thailand for weeks on a backpacking budget and spent around £650 per month! That’s incredibly affordable, and I’m guessing you’ll likely have more than that, which means you’ll be having an even more fantastic time. But why is Thailand so cheap?

In this post, I’m uncovering why Thailand is an affordable destination. I’m also including actual costs of accommodation, transport, food and activities for visiting or living in Thailand to help you budget.

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Why Is Thailand So Cheap For Tourists?

In a nutshell, Thailand has a low cost of living, making it an affordable destination for tourists. This affordability comes from the overall lower cost of labour, food, transport, and accommodation compared to Western nations, where the cost of living is higher.

For example, if I were to grab a meal from a local Thai street food stall, it would usually cost less than $3 USD, whereas here in the UK, I won’t even get a coffee for that! The low price is due to cheaper fresh produce and lower labour costs, which keep the final cost to consumers like us much more affordable.

Think of it like this: when the cost of production is low, whether it’s food, accommodation, or transport, the end product is much cheaper. These three factors—food, accommodation, and transport—play a huge role in the overall expense of a trip. This is why Thailand is such a budget-friendly place for tourists to visit.

Thailand’s geographical location

Thailand’s geographical location also impacts its affordability. The country is very fertile, and its climate makes it ideal for agriculture, allowing for the year-round production of rice, fruits, and vegetables.

Therefore, since most of the food in Thailand comes from Thailand, there is no import tax, and food can be bought cheaply. This means it can be sold cheaply, too.

The warm climate also allows for the construction of simpler, open-air accommodations, particularly in beach areas, which are less expensive to build and maintain.

What other factors affect the cost of living in Thailand?

Another reason Thailand is so cheap for tourists is that the Thai currency – called the Baht – is not as strong as other currencies, such as the GBP or the USD. Although the exchange rate fluctuates, it sits around:

• 1 GBP = 44 baht
• 1 USD = 34 baht

Different factors, like inflation and government policies, can affect the strength of a currency. Those of us visiting from countries with a stronger currency will get more value for our money due to the good exchange rates. This means that we can buy more things in Thailand for the same amount of money we would spend at home.

Low minimum wage

Thailand’s salaries are relatively low due to several factors, one of which is the abundance of low- or unskilled labour. In part, due to the government’s limited investment in education, it’s challenging for Thai workers to acquire advanced skills and progress into higher-paid industries.

Thailand last raised its minimum wage in October 2022 and is set to raise it again in 2024. The current minimum daily salary ranges from 328 baht (US$9.12) to 354 baht (US$9.84). Raising the daily minimum wage to 600 baht by 2027 is a core principle of the ruling Pheu Thai party’s campaign promise.

All of these factors combined make Thailand a cheap place for tourists to visit. However, this doesn’t mean that Thailand is affordable for everyone. If you’re a local or visiting from neighbouring countries, like Indonesia, Thailand might seem expensive. In this instance, “cheap” is a relative term.

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The Average Cost Of A Trip To Thailand

Thailand is not as affordable as it used to be, but it is still cheap to visit (although there are countries in Southeast Asia that are even more affordable – like Bali!), but it can get expensive. It’s great for backpackers and luxury holidaymakers since it has a selection of both high-end and budget facilities.

With this in mind, the average cost of a trip to Thailand will totally depend on your travel style and preferences. There are options to suit everyone, from local eats and group tours to fine dining and private excursions.

Thailand undoubtedly caters to backpackers and is renowned as a backpacker’s destination. I actually think it’s one of the best places for first-time backpackers to visit. If you’re on a small budget, you can get by on as little as $25 USD a day. You’ll need to stay in hostels and eat locally, but it’s entirely doable.

Over four weeks, I spent around £650, which is about £21 a day. In USD, that’s close to $25. That said, I think a backpacking budget of around £1,000 a month is best. 

For mid-range holiday goers, a daily budget of $120 USD is a comfortable target, which is still pretty low-cost. Keep in mind that accommodation prices are half if there are two of you. For luxury, anything between $300 and $400 is going to work.

Daily & weekly costs for Thailand

Daily costs in Thailand for a mid-range holiday would average something like this:

• Accommodation: £60 per night ($78)
• Meals: £2 – £10 per meal ($3 -$13)
• Drinks: £1.50 – £10 each ($2 – $12)
• Transport: Tuk-tuk £5 ($7) / Private driver – £40 per day ($52)
• Activities: £35 – £85 each ($45 – $110)

The table below shows the different levels of spending money you might need for budget and luxury expenditures in a week (7 days).

Note shopping and alcohol costs are not included.

Expenditure (7-day)	Backpackers (£/USD)	Luxury travellers (£/USD)
Accommodation	£70 / $91	£1,700 / $2,160 +
Transport	£30 / $35	£280 / $365 +
Breakfast	£20 / $26	£55 / $70 +
Lunch (incl. smoothie)	same as above	£70 / $90 +
Dinner (excl. drinks)	same as above	£105 / $135 +
Activity (per activity)	£30/ $40	£85 / $110 +

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How much money do you need for a week’s trip to Thailand?

Once you know this, you can work out how much money you will need. If you’re not sure, I’ve included the average cost breakdown below to help guide you.

• Backpackers: $226
• Mid-range travellers: $850
• Luxury travellers: $2,860

Travelling on a backpacker budget, you might easily spend $30 daily. This covers a hostel, three cheap meals a day, and one cheap activity. To keep costs down, opt for free activities like visiting the beach or walking tours.

• $91 hostel + $35 transport + $60 meals + $40 activity = $226

For mid-range holidays, set a budget of $120 per day. Your accommodation choice will impact your budget the most. However, you’ll be able to stay in a nice hotel and include more activities and beverages on your trip.

• $430 hotel + $140 transport + $200 meals + $80 activity = $850

Those of you wishing for a luxurious trip should budget $400+ per day. Think luxurious hotels, upscale dining, and private excursions at your fingertips… the sky is the limit!

• $2,160 hotel + $365 transport + $225 meals + $110 activity = $2,860

The most expensive part of the trip will be the flights over to Thailand. Luckily, there are many airports in Thailand. It’s possible to get direct flights from cities like London, L.A., Sydney and Dubai. Budget between $800 – $1200 + for a roundtrip.

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Reasons Behind The Low Cost Of Travelling To Thailand

I hope the information above has provided a good starting point for planning your holiday budget and helped you understand why Thailand is so cheap.

Next, I wanted to discuss the main factors impacting the cost of visiting Thailand in more detail: accommodation, food, entertainment and transport.

Why accommodation in Thailand is so cheap

I love visiting countries where I know accommodation is generally going to be affordable. Thailand is one of these countries, and I know I’ll always be able to find a great, affordable hostel to rest my head.

Since Thailand caters to all travel budgets, there are plenty of luxury resorts, especially in Bangkok and Phuket, that will cost a fair bit more. Still, in the best way, it’s surprising how much you can get for your money. There are always bargain deals at high-end hotels, which are much cheaper than their European equivalents.

Most hotels in Thailand have a ‘breakfast included’ offer, which is essentially a complimentary breakfast. I recommend booking accommodation with such deals as this saves even more money. Even though food isn’t expensive, every little bit helps, especially when it comes to budget travel!

So, why are Thailand hotels so cheap? The answer derives from the low living costs. It takes a lot less money to build, maintain, and manage the hotels, and this is reflected in the price. 

Hotel Costs In Thailand

Accommodation is generally one of the most expensive parts of a trip. Still, Thailand is one of the best places if you’re travelling on a budget, as you will find affordable accommodation. For example, on average, I paid between £5 and £10 ($6 and $12) per night for a hostel. For a more comfortable stay, budget $12 a night.

Although I stayed in hostels, there were times I got a private room instead of a dorm, especially in less-touristy destinations such as Koh Mook and Chiang Mai. These rooms cost the same as dorms in popular areas. Private rooms in hostels average between £10 and £25 ($12-$30) per night.

It’s also very possible to stay in total luxury without going bankrupt. A mid-range budget of $70 – $80 a day is going to get you a gorgeous room. However, luxury resorts and villas can go as high as a staggering $250+ a night! Keep in mind popular areas like Bangkok and Phuket are going to be a little more.

There are also homestays and guesthouses worth considering, which are similar in style and have an intimate feel. Homestays are generally more affordable, averaging $10-$20 per night, and you’ll get to experience a traditional stay with a family. Guesthouses tend to offer a boutique stay with more amenities, but prices increase slightly to about $50 per night.

Some of my favourite hostels/guesthouses in Thailand:

• Bangkok – Daraya Boutique Hotel
• Phuket – Sugar Ohana Poshtel
• Chiang Mai – POR Thapae Gate

Best Hotels In Thailand

During my time in Thailand, I travelled around the country and stayed in plenty of hostels and budget hotels. I had a few mishaps, some hilarious moments and one hostel where I really ought to have left.

• Best Homestay in Bangkok – Dara Three Hostel
• Best Hotel on Koh Mook – Sivalai Beach Resort
• Best Hostel in Khao Sok – Khaosok Secret Hostel
• Best Homestay in Kanchanaburi – Chez Bure – Bure Homestay
• Best Guesthouse in Ayutthaya – Zleepinezz Hostel
• Best Hostel in Chiang Mai – Mad Monkey Chiang Mai

Is Thailand cheap to eat & drink?

I would say Thailand is cheap to eat and drink, although it depends on whose perspective you’re looking from. As a budget traveller, seek out street food stalls and eat locally at family-run restaurants rather than modern spots. These canteen-style eateries offer very filling and cheap food and drinks that won’t go over $3 USD.

By doing this, I was able to keep my food budget to a minimum. However, this is not a travelling style for everyone. If you’re in Thailand on a two-week holiday, it’s unlikely you’ll be planning a budget trip, so food and drink costs can quickly escalate. There are plenty of high-end restaurants, cafes, and bars.

One of the biggest budget-breaking culprits is drinks. While local beers, like Chang, are affordable, other alcoholic beverages can quickly increase expenses. Although it’s not as expensive as back home, alcohol is relatively pricey compared to the cost of food in Thailand. Remember, western-style bars serving imported alcohol often charge premium prices.

So, is Thailand cheap for eating and drinking? Overall, it’s very easy to eat and drink on a budget if you stick to local meals. However, if you enjoy dining at restaurants and sipping cocktails at sunset, allocate more money to your trip.

Food Costs In Thailand

Back to our budget-friendly meals: Street food stalls and local restaurants will keep costs down, although popular tourist spots will inevitably be more expensive.

Food and drink in Phuket and Bangkok are more expensive than in places like Kanchanaburi or Chiang Mai. Vegetarian meals like soups and noodles will be cheaper than those that contain fresh fish or meat. 

However, I always like a bit of variety, so I mix meals from the local cafes with some fancier restaurants while cooking a number of meals at the hostel.

If you’re savvy, it’s super easy to afford to eat in Thailand:

• Local cafes – You’ll be able to grab a filling meal for $1 – $3
• Street food – From grilled meats to fried bananas and pad thai for less than $1.5
• Fresh smoothie – More expensive in restaurants; head to the stalls for $2
• Coffee – Try the tasty local coffee for $2
• Western dishes – The selection in Thailand is huge, starting from $10 – $15+
• Chang beer – The local beers start at $2
• Cocktails – A refreshing cocktail will set you back $8 to $12+

Cost Saving Tips

• Buy produce from the markets and cook at your hotel at least once a day.
• Buy the local beers, known as ‘Chang.’
• Stay away from pricey cocktails.
• Eat meals from the local restaurants – these are usually very filling and delicious.
• Choose accommodation with a “breakfast included” deal.
• Find the bars with Happy Hour; also, check the bars’ Instagram pages for deals.

Most alcohol is imported, and there is a high import tax. Drinking wine and cocktails will increase your budget exponentially, around £3.20/$4 for a glass of wine and £6.50/$8 for a cocktail. So, if you are drinking, it’s best to stick to local beers such as Chang beer, which has no import tax.

Why transport is affordable in Thailand

One thing you don’t need to worry about in Thailand is transportation. Transport in Thailand is cheap due to the low fuel costs and inexpensive labour. Affordable options are abundant, such as scooter rentals and taxis, which contribute to the general affordability of getting around.

If you’re choosing to stay long-term in the country, the best way to get around is to rent a scooter; it’s the most efficient and economical way to travel.

Other than renting a scooter and using taxis, you’ll find that Thailand has a good train network between the major cities in the north and south while connecting through Bangkok. 

Within the cities, it’s easy to commute by tuk-tuk, scooter, or taxi. You will even see scooter taxis. The normal car taxis are the most expensive, but they are still reasonably priced. That said, we did notice the tuk-tuks in Phuket to be very pricey—too pricey—so we ended up catching local buses everywhere instead.

Additionally, long-distance coach buses are readily available. Although they are less comfortable than trains, they are more accessible and less costly.

Transport costs in Thailand

Various transport options are available depending on how long you’re spending in Thailand and where you plan to go.

• Scooter rental – Daily rental costs start from $5, but if you’re after something nicer, it’s about $10.
• Taxi – Grab is the equivalent of Uber in Thailand. You can choose a car or bike. Bikes can be unsafe but cheaper. However, they are both super affordable and avoid any issues that could arise with metered taxis.
• Private driver – A full-day hire starts at about $52 (9 hours).
• Bus/coaches – The routes go between the popular towns and average £7 – £30 ($10 – $40) depending on distance. Overnight coaches are a cheap way to travel to Thailand.
• Ferry – To travel to the islands, ferries are the cheapest option, whereas speedboats are faster but more expensive. Depending on distance, fares average £7 – £15 ($10 – $20)
• Sleeper trains – Depending on distance, but a good budget per train ride is about £20 – £23 ($25 – $30)
• Local buses and MRT are pennies, and tuk-tuks are negotiable but generally cheap.

During the day and for short distances, i.e. Bangkok to Ayutthaya, third class is fine but there won’t be any aircon. My second-class overnight journey from Chiang Mai to Ayutthaya cost us 1800 Baht, which is $26 for a 10-hour trip!

Entertainment & Activity costs in Thailand

Thailand has a vast array of attractions that you’ll love. However, despite its overall affordability, many activities and excursions can be surprisingly pricey. I’m not saying this to complain but to make you aware that you’ll need to budget accordingly—I’m all for growth and development!

That said, the cost of entertainment can vary depending on the location and quality of the activity. For example, a Thai cooking class will be more affordable than a scuba diving excursion, but there will be different types of scuba diving excursions available at various costs.

To help you budget, below are a selection of popular activities.

• Popular island adventures – The Phi Phi Islands adventure day trip is super popular and costs about £68/$77 a ticket.
• Famous market tours – The railway market and floating market tour in Bangkok is a must-do and starts from £24/$27
• Temple tours – In Bangkok, discover the three temples city tour for £71/$80 per person.
• River cruises – Explore Ayutthaya on a river cruise from Bangkok on this full-day trip for £56/$63
• Nature and historical tours – Join a private tour of Kanchanaburi, visit Erawan Waterfall, and take part in elephant care for £166/$188.
• Cultural tours – Discover Doi Inthanon, the Elephant Sanctuary and a Trekking Trail in Chaing Mai for £55/$62
• Relaxing National Park tours – Visit Cheow Lan Lake from Krabi and spend the day at Khao Sok National Park for £87/$98 per ticket.

Why are tours expensive in Thailand?

Tours are expensive compared to the cost of living in Thailand. The average local would not be able to afford a tour from Phuket to Phi Phi Island, for example. This is because this type of entertainment is explicitly aimed at tourists, and so prices are hiked up. Since tours are expensive, it’s essential to budget for this no matter how cheap Thailand is.

⭐ Interesting analysis >> I made a quick comparison of a similar experience here in England to one in Phuket. A full-day trip to Stonehenge, Windsor Castle, Bath, and a pub lunch costs £89.00/ $110, while a full-day trip to Phi Phi and surrounding islands plus lunch costs £68.00/ $85. Considering the drastic differences in the cost of living, that’s a very close figure! 

Free Entertainment

No matter where you go in Thailand the beach will always be free! Most of the larger cities offer free walking tours which are a great way to orientate yourself with the area while meeting new people. 

Exploring cities and national parks and hiking are great activities that will keep you busy and never get boring. Many temples in Thailand are also free to enter and provide an excellent opportunity to learn about the local culture.

Why Thailand offers an affordable getaway

Thailand is an affordable paradise, thanks to its lower cost of living and favourable exchange rates for many travellers. While this poses challenges for locals, it means Thailand offers exceptional value for tourists.

Thailand is a dream destination with its lively cities, lush jungles, serene islands, and stunning beaches. It is one of the few places where you can experience world-class amenities at bargain prices, allowing you to enjoy a tropical adventure without overspending.

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Is Thailand Cheap To Live?

Thailand is a very affordable place to live. During my last trip, I was in the country for just over five weeks and spent about £650 / $850 per month.

If staying in one location for longer periods, you’ll likely be able to find good rates on apartments. To keep costs down, opt to stay in a hostel long-term and negotiate a monthly rate; many people do this, too. 

Digital nomads have opted to base themselves in cities like Chaing Mai and Phuket. The great thing about Thailand is that you will automatically get a 60-day entry permit/visa if you’re coming from the UK or USA. 

These visas can easily be extended for another 30 days, but it only takes crossing the border for a day or so to re-enter. Visa runs like this are common among digital nomads and long-term backpackers. 

It’s not uncommon to live on less than £525/ $650 a month in more affordable places like Chiang Mai and Pai, However with a monthly budget of £645/ $800 you could easily live a good life in Thailand. 

In the capital, keep in mind it will be more expensive, $800/ $1,000 per month should keep you fulfilled.

Thailand’s cost of living

Costs will vary depending on where you stay. If you’re reading this with a wish to move to Thailand and want to find out if you can afford to live there, this little table shows the baseline cost of living.

Activity	Cost of living in Thailand
Accommodation (per month)	£160/ $200
Transportation	£80 / $100
Petrol (full tank)	£2.50 / $3
Utility/Laundry	£25 / $30
Fitness (gym)	£25 / $30
Internet	£13 / $15
Entertainment	£68 / $85
Food	£155 / $190
Nights out (£5 cocktails)	£30 / $38

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Tips For Saving Money In Thailand

Below are a handful of cost-saving tips to help plan an affordable trip to Thailand:

• Plan your trip in advance by researching popular attractions and must-see spots to snag the best deals and steer clear of tourist traps.
• Select accommodation that offers a good balance between comfort and affordability.
• Relax at the beach for a free and enjoyable way to soak up the sun.
• Opt for group tours instead of private ones to save money, and make sure to check out free attractions like temples.
• Dine at local eateries and street food stalls for authentic and budget-friendly meals.
• Visit local markets for fresh produce and affordable souvenirs.
• Skip expensive cocktails and try local drinks for a more affordable option.
• Rent a scooter to explore the area at your own pace and on a budget.
• Download Grab for cheap and easy transportation.
• Bring a reusable water bottle to stay hydrated and avoid the cost of buying bottled water.

Why are prices increasing in Thailand?

Prices in Thailand have been rising for several reasons. As a popular tourist destination for decades, the country has seen extensive development, which has increased demand for goods and services, driving prices up.

Global inflation is also playing a role, causing the cost of living and tourism to rise. Additionally, infrastructure improvements aimed at making Thailand more accessible and enjoyable for visitors, while beneficial, also contribute to higher costs.

Despite these increases, Thailand remains more affordable than other popular destinations like Hawaii, the Maldives, and the Caribbean, offering great value for tourists.

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Is Thailand Cheap Because It’s Dangerous To Visit?

Thailand is a popular holiday destination but it can be a concern for some of you when it comes to safety. In my opinion, Thailand is generally safe for tourists. The country has a low crime rate, and locals are friendly and welcoming.

However, petty crime can still occur, and it’s wise to take precautions to avoid being a victim. Keep an eye on your belongings, especially in crowded areas such as markets like the weekend market in Phuket, and avoid carrying large sums of money.

It’s also essential to be careful when using public transportation, such as tuk-tuks or taxis. Make sure to negotiate the price before getting in to avoid any surprises.

Thailand is known for its nightlife, and while it can be fun to party, it’s essential to be cautious. Don’t leave your drinks alone, and be aware of your surroundings, it’s better not to get too intoxicated. If you’re travelling alone, it’s always best to stick to busy areas and avoid walking alone at night.

I do feel Thailand is a safe destination, and with the right precautions, you can have a fantastic trip without any issues.

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The Negative Impacts Of Cheap Tourism In Thailand

As with everything, there are always two sides which need to be understood. As great as Thailand is for being an affordable tourist destination, the influx of cheap tourism has had some negative impacts on the country. 

Overtourism has become one of the main issues and affects popular areas like Bangkok, Chiang Mai, and Phuket the most. It has led to crowded streets, loss of culture and environmental degradation. 

Unfortunately, an increase in tourism has put pressure on the country’s natural resources, leading to deforestation, pollution, and habitat destruction including damage to coral reefs. This is due to various reasons including tourism activities like snorkelling and diving.

Although things are changing, some tourist activities have been criticised for exploiting animals. There are many issues surrounding animal welfare issues such as elephant riding. 

Additionaly, the wealth from tourism is not equally distributed throughout the country and many Thais are still living in poverty and at a disadvantage. 

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Why Is Thailand Worth Visiting?

Thailand is one of the most popular tourist destinations in the world, and for good reason. The country has an irresistible charm and a welcoming culture that makes you feel right at home. 

I’ve dedicated a whole post to this question, but Thailand is known as the land of smiles for a reason. Thailand has a reputation for being one of the friendliest countries in the world. This warm and friendly hospitality is just one of the reasons why Thailand is so popular.

Thailand’s developed infrastructure is heavily focused on tourism, making it easy for you to explore the country. From budget hostels to luxury boutiques, there are plenty of options for everyone. Thailand is a fantastic country to visit for solo travellers, families, or backpackers on their first trip.

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Why Is Thailand So Cheap FAQs

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Final Thoughts | Why Is Thailand So Cheap?

Thailand’s affordability for tourists can be attributed to a combination of factors. The country’s low cost of living, abundance of budget-friendly accommodations, and inexpensive transportation options all contribute to making Thailand an affordable destination. 

The country’s focus on tourism has led to a competitive marketplace where prices are kept low to attract more visitors. All of these factors make Thailand a great choice for budget-conscious travellers who still want to experience all the beauty and culture that the country has to offer.

Thailand’s combination of warm hospitality, natural beauty, buzzing cities, and rich culture make it an ideal destination. Whether you’re looking for a paradise holiday, an urban escape, or a cultural experience, Thailand has something for everyone.

It’s one of our favourite countries and it’s no wonder why Thailand is so popular that many of you keep coming back year after year.