The biannual rankings measure 119 economies for criteria like business environment, safety and health conditions, price competitiveness, air transport infrastructure, tourist services and infrastructure, openness to tourism, and environmental, socioeconomic and demand pressures.
In Southeast Asia, Singapore, Indonesia and Malaysia outperformed Thailand, whose economy relies heavily on tourism growth.
Thailand received high appreciation for air transport infrastructure, price competitiveness and openness to tourism thanks to visa exemption policies.
It recently extended visa waivers for Indians and Taiwanese until November and granted permanent exemptions to citizens of China and Kazakhstan.
But it is still challenged by its quality of tourist services and infrastructure and lack of cultural resources.
Tourism associations said they were disappointed with the country's downfall in the rankings and would urge the government to make detailed plans to improve the quality of services and infrastructure, Bangkok Post reported.
Vietnam ranked 59th, trailing many of its Southeast Asian neighbors due to inadequate tourism services and infrastructure.