Bualuang Securities (BLS) has upgraded its investment rating for the Thai tourism sector to ‘Overweight’, citing improved signs of a recovery in tourist arrivals. Estimates for international arrivals in 2026 have been revised up to 31.9 million from the earlier forecast of 30.4 million, underpinned by the lower-than-expected impact of the Middle East conflict and a robust recovery in arrivals in the near term.
The outlook for the sector in 2H26 is anticipated to improve, supported by the return of international flights, the resumption of MICE (Meetings, Incentives, Conferences, and Exhibitions) activities, and other major events. Looking ahead to 2027, the number of tourists is expected to rise to 34 million, representing a 6.6% increase year-on-year.
Within the sector, Bualuang highlights Airports of Thailand Public Company Limited (SET: AOT) as a key stock pick, citing strengthened cash flows following the recent increase in the passenger service charge (PSC). For the hotel segment, Asset World Corp Public Company Limited (SET: AWC) is recommended as a standout, supported by its improving operational performance and the beginning of returns from prior investments.
For AOT, Bualuang notes that the PSC increase implemented in June 2026 is a significant factor that shifts the investment theme from a focus on tourism recovery towards sustained cash flow growth. This solid financial position is expected to support long-term airport expansion plans. Operating cash flow is projected to rise from THB 26.9 billion in 2026 to THB 53.3 billion by 2030, with free cash flow expected to remain positive throughout.
Regarding AWC, the brokerage observes that the company is now entering a phase of harvesting returns, as its hotel expansion has begun to slow. Catalysts for the second half of 2026 are becoming more evident, with events such as the IMF–World Bank Group Annual Meetings 2026 in October and the Tomorrowland Pattaya festival in December expected to boost hotel revenue per available room by 15% year-on-year in 4Q26. These are anticipated to further support ongoing growth in the company’s financial performance.
