Foreign arrivals increased swiftly during 2Q22 and we expect even stronger growth in 2H22. Under the Tourism Authority of Thai-land’s (TAT) best-case scenario, tourism income from foreign and local travelers could reach 80% of the pre-COVID era level in 2023, which would mean upside to the expectations of the street and ourselves. Our sector call remains OVERWEIGHT.
Foreign arrivals continued to rise strongly in June 2022
The Ministry of Tourism and Sports reported foreign arrivals in June of 767k persons, up 47% MoM. That made for 1H22 international arrivals of 2.1m persons, up from only 40k in 1H21 when COVID-19 hit hard. The sharp YoY increase, however, represents only 11% of 1H19 arrivals, in part because there are very few Chinese visitors (as they are still required to quarantine on re-entry to China). In the pre-COVID era, China was Thailand’s biggest tourism market, totaling 11m visitors in 2019. We expect Chinese visitors to return en-masse sometime in 2023 (once Beijing lifts its quarantine-on-re-entry requirement).