KGI Securities (Thailand) anticipates a recovery in Thailand’s hotel sector, supported by an expected rebound in international tourist arrivals in the second half of 2026. From January 1 to June 20, 2026, Thailand welcomed 15.45 million international tourists, a 2.8% year-on-year decline. However, strong growth was seen from China (2.53 million arrivals, +18% YoY) and India (1.18 million, +8% YoY).
KGI notes that leading indicators from the TAT Intelligence Center, including a 2% year-on-year increase in forward flight bookings for June, signal a likely improvement in inbound tourism for the rest of the year. Notable growth came from Argentina (+37%), the UAE (+34%), and Spain (+32%), while international seat capacity remained stable at 3.5 million in June.
Additionally, air connectivity improved, with 87 new direct international routes launched year-to-date, primarily from short-haul markets such as India, the Philippines, Vietnam, and South Korea. These developments underpin KGI’s maintained forecast of 32.1 million international arrivals for 2026, representing a 2.7% year-on-year decrease.
Hotel operating trends also turned positive in May, with revenue per available room (RevPAR) returning to growth across all listed hotel operators. The strongest RevPAR gains were noted for S Hotels and Resorts (SHR), up 5% year-on-year from a 7% decline in April, and Central Plaza Hotel (CENTEL), which swung into single-digit growth after a 4% drop. This recovery was driven by improving demand in both Thailand and the Maldives following temporary disruptions in April. Asset World Corporation (AWC), The Erawan Group (ERW), and Minor International (MINT) maintained positive single-digit RevPAR growth.
As a result, KGI expects the sector’s RevPAR to post low single-digit growth in the second quarter of 2026. Forward bookings suggest further improvement in the third quarter, and additional upside is anticipated from forthcoming domestic tourism stimulus measures later in the year.
On the food and beverage front, MINT reported 4-5% same-store sales growth (SSSG) in May, while CENTEL saw low single-digit increases. Both companies maintained positive SSSG in June, buoyed by stimulus measures, like the ‘Thai Chuay Thai Plus’ initiative.
Despite these positives, KGI expects mixed earnings across hotel operators for the second quarter of 2026, as April’s results were affected by the Middle East conflict. Companies with greater exposure to short-haul travel demand, such as AWC, ERW, and MINT, are projected to deliver resilient year-on-year earnings growth.
Conversely, CENTEL and SHR may report weaker earnings due to softer performance in Thailand and the Maldives and a high comparative base. Nevertheless, sector operating trends have outpaced expectations, with year-to-date RevPAR showing flat to positive single-digit growth—exceeding KGI’s full-year assumptions of -4% to +2% for covered operators.
Sustained RevPAR performance points to an upside risk to the sector’s 2026 earnings forecast of THB 16.1 billion, a 7% year-on-year increase. KGI expects earnings momentum to strengthen from the third quarter onwards as travel demand returns to normal and RevPAR continues to rise.
Following these, KGI maintains its ‘Overweight’ rating on Thailand’s hotel sector, citing three main supporting factors: the diminishing impact of the Middle East conflict, an anticipated recovery in international tourist arrivals during the second half of 2026, and attractive sector valuations following a sharp correction.
Share prices are still trading 5-12% below pre-conflict levels, leaving room for re-rating as operational momentum continues to build. KGI continues to favor ERW and MINT, given their resilient RevPAR trends and expectations for further year-on-year earnings growth.
