Kasikorn Securities (KS) wrote that Thailand is preparing to implement three new air travel-related charges: an international passenger service charge of THB 1,120, a 450-baht entry fee for foreign tourists, and a 1,000-baht outbound travel tax. The latter two fees are still under consideration.
Should all measures be enacted, total travel costs may increase by nearly $100 per person, which could threaten Thailand’s competitiveness in the tourism sector, according to the analyst.
Kasikorn views this as a negative development for Airports of Thailand Public Company Limited (SET: AOT), airlines, hotels, and the tourism retail sector, as these additional costs may dampen travel demand, although the rise in PSC could boost AOT’s revenue per passenger.
Maybank Securities (Thailand) also addressed these issues following a meeting with AOT’s management. While no materially new information was discussed, the proposed outbound travel tax and tourist entry fee were focal points.
AOT’s management believes the 450-baht tourist entry fee is unlikely to significantly impact demand, but remains skeptical that the proposed outbound travel tax will be implemented, citing its potential widespread effects on the private sector, particularly low-cost airlines. Thailand previously considered such a tax in 2023 but faced substantial opposition from the public and industry.
The outbound travel tax proposal would levy a 1,000-baht charge on international air travel from Thailand, though land and sea departures would be initially exempt. Public consultations are scheduled until 29 October 2026, with the measure set to take effect 180 days after being formally announced. Thailand last collected a similar tax between 1983 and 1991.
Maybank’s sensitivity analysis shows that every 1% decline in international outbound passenger numbers would lead to a 1.6% drop in AOT’s fiscal 2027 earnings and decrease the target share price by THB 0.6 per share.
Regarding the tourist entry fee, the government is planning to set it at THB 450, higher than the previously proposed THB 300 by the Ministry of Tourism and Sports. While the higher fee may concern cost-conscious travelers, Maybank expects the impact to be limited, as the fee represents less than 1% of the average tourist expenditure per trip. Proceeds from the tax will be used to improve tourism infrastructure and provide insurance coverage for travelers.
As a result, Maybank maintains its ‘Buy’ rating on AOT with a target price of THB 75.00 per share.
On Friday at 10:17 AM (Bangkok time), the share price of Airports of Thailand rose by 1.74% or THB 1.00 to THB 58.50, with a trading value of THB 158.14 million.
