Tourism Sector Gets Overweight Rating as Foreign Visitors Continue to Pour into Thailand

The number of tourist arrivals in Thailand increased more than tenfold between January 1 and mid-March 2023, suggesting that the tourism sector is steadily improving. Hence, Bualuang Securities continues to assign a “Overweight” rating to the Thai tourism sector, with the expectation that sector stocks will outperform the key primary market index within the next 12 months.

Between January 1 and March 18, 2023, Thailand welcomed 5,578,721 international visitors, which is about half of the 11.5 million tourists that arrived in the country in 2022. This generated over THB200 billion in tourism earnings in just nearly 3 months.

Since December of last year, Thailand has averaged more than 2 million international visitors a month, before reaching 2.11 million in February, a month after China fully reopened its border. Thailand also reported a 69% increase in Chinese visitors month over month in February. Bualuang Securities anticipates that the monthly increase in inbound tourists will continue in March, mainly boosted by Chineses visitors.

Central Plaza Hotel Pcl. (SET: CENTEL), one of the largest hotel chains in Thailand, has been named a top pick stock by Bualuang Securities due to its strong growth in the hotel and restaurant businesses and positive earnings outlook attributable to improving revenue per available room (RevPAR). Hotel operations in Thailand and the Maldives helped CENTEL’s RevPAR increase by 34% quarter-over-quarter in January and February. During the same time period, same-store sales growth (SSSG) for the restaurant business climbed 8% month-over-month.

For Minor International Pcl. (SET: MINT), Bualuang predicts a slowdown in profitability during the first quarter due to the off-season in Europe, but that hotel operations in other regions will rise both year over year and quarter over quarter.