Strong winds were still blowing as searchers looked for the missing people off the tourist island of Phuket in the Andaman Sea.
Chinese tourists make up the biggest number of foreign visitors to Thailand, their numbers surging in recent years.
The double-decker cruise ship Phoenix PC Diving had capsized in rough seas on Thursday with 105 people on board, 93 of them Chinese tourists, along with 12 Thai crew and tour guides.
"It's very hard to see ... it's traumatic, it's tragic but the best thing to do, our job as divers, is to bring back the bodies to their families", diver Philip Entremont told reporters.
Television broadcast images of dozens of divers searching for the missing, while more rescuers waited on standby at a pier nearby.
Phuket Governor Norraphat Plodthong said 48 passengers were rescued from the boat, with 49 unaccounted for.
China's ambassador to Thailand, who travelled to Phuket, said Beijing had sent two search and rescue teams to help the Thai authorities.
Thailand has a poor health and safety record and accidents are common on its roads and busy waterways - especially in tourist areas during the monsoon season which is now biting. The commander of Phuket Provincial Police, Teerapol Tipcharoen, said the sea had calmed since Thursday evening's accident and the search was ongoing.
The director of Vachira Phuket Hospital is calling for donations of freezer units to store bodies from the Phoenix tour boat disaster as the morugues at hospital on the island can not cope with sheer number of bodies.
Numerous victims had been on group tours, booked in Phuket and China.
"We will take any chance in the search for life", Tourism Minister Weerasak Kowsurat said at the search site on Friday, following comments by a Marine Department official that there was probably "no chance" of finding more survivors. Ltd., from Thailand Friday morning.
Earlier in the day authorities said a hospital morgue in Phuket was running out of space and called on donors to help provide freezers for the bodies.
A Chinese tour operator based in the central province of Hunan said on its official Sina Weibo account that three travellers it had booked were missing.
He said that another boat sank off Koh Hae, 10 kilometres south of Phuket, while a yacht carrying other Chinese nationals also sank off Koh Mai Ton, 9 kilometres south-east of Phuket, Somsak said. All on board were returned safely to shore.
The accident comes as Thailand is already embroiled in an effort to rescue 12 boys and their soccer coach who are trapped inside a flooded cave.