Equity Analysis /

Thailand: Tourism sector - Key takeaways from BLS Tourism Day

  • Tourism activity accelerating in 2H22

  • More manageable food cost inflation

  • AOT - A strong recovery in international passenger numbers

Bualuang Securities
12 July 2022

We recently hosted Tourism Day and Thai Corporate Day events, where executives from six listed firms tied to tourism—AOT, CENTEL, ERW, MINT, DUSIT, and SPA—spoke. They all expressed optimism over the outlook for 2H22, especially for 4Q22, driven by a fast recovery in foreign arrivals. Strong demand in the face of higher costs is likely to lead to room rates in key destinations exceeding pre-COVID era levels.

Tourism activity accelerating in 2H22

All the executives who spoke at our events expect numbers to improve substantially (particularly following May 1, when many restrictions on entry to Thailand were lifted). Both occupancy and room rates have risen substantially since then (somewhat more strongly than we had expected). Key tourist destinations—Bangkok, Pattaya, and Hua Hin—have outperformed, with mean room rates touching pre-COVID era levels. Given strong demand among tourists, the companies aren’t very concerned about the risk of higher costs squeezing margins; they will simply raise prices further for hotel rooms and services. The executives don’t expect higher infection rates of the Omicron BA.4 and BA.5 sub-variants to materially affect foreign arrivals or domestic demand—advanced hotel bookings for July and August remain strong.