Equity Analysis /

Thailand: Tourism sector - Shallower losses for 2Q22

  • YoY recovery from hotel industry’s nadir

  • Food and retail businesses are profitable

  • Coverage should mark an aggregate profit for 2Q22, due to MINT

Bualuang Securities
25 July 2022

We expect hotel operators to post significantly shallower YoY and QoQ losses. 2Q21 numbers were hit by a COVID-19 lockdown. The easing of cross-border travel restrictions since Apr 2022 precipit-ated sharply higher foreign arrivals; 2Q22 hotel RevPar numbers are likely to be reported at about 50% of their pre-COVID era levels. Our top hotel pick is MINT, followed by CENTEL, ERW, and AWC.

YoY recovery from hotel industry’s nadir

Foreign arrivals were tiny in 2Q21 at 20k persons; numbers increased only gradually during 2H21. But arrivals rose sharply to 497k persons in 1Q22 and 1.5m in 2Q22, which ramped up occupancy rates, boosted F&B sales, and enabled hotels to raise room rates. Also, hotels hosted more functions during 2Q22. The most popular tourist destinations were Bangkok, Pattaya, Hua Hin, and Phuket. The occupancy rates of most hotels in Thailand ranged 45-55% for 2Q22 (versus occupancy rates of 11-13% in 2Q21 and 25-30% in 1Q22) and room rates increased by about 10% YoY.