TISCO Securities has kept its “Overweight” rating on the Thai tourism sector unchanged. The view follows a Corporate Day for institutional investors, where management teams from the sector’s listed companies discussed their outlook. TISCO named Erawan Group (ERW) and Thai Airways International (THAI) as its top picks.
TISCO rates five of the six companies featured as “Buy”. It sets a target price of THB 75.00 for Airports of Thailand (AOT), implying 22% upside, and THB 50.00 for Central Plaza Hotel (CENTEL), with 16% upside. Erawan Group (ERW) has a target of THB 4.20 (13% upside), while Thai Airways International (THAI) is at THB 7.80 (28% upside). Minor International (MINT) offers the highest upside among the group, at 48%, with a target of THB 32.00. Asset World Corp (AWC) is rated “Hold” with a target price of THB 3.20, or 5% upside.
The main investor concern is whether average daily rate (ADR) growth is sustainable in 2027. TISCO said ADR in 2026 has been supported by a heavy event calendar, a low base and completed renovations. Management teams were challenged on the 2027 outlook, and all expect ADR to grow at least in line with inflation.
Concerns were raised over higher hotel supply in Bangkok and stiffer competition from ASEAN destinations such as Vietnam and Indonesia. Management, however, expects overall growth in tourist arrivals to support demand.
TISCO said the intensified Middle East conflict is putting pressure on the sector. All companies remain cautious about 4Q26 and 2027. While some offered a preliminary view on 2027 rate growth, none has finalized budgets or set firm financial targets, as tourism remains highly sensitive to jet fuel prices.
The brokerage firm noted that THAI is the most affected but continues to roll out all its planned new routes, supported by new aircraft acquisitions.
Still, there are early signs of improvement. Thai hotels have seen better revenue per available room (RevPAR), helped by lower airfares after jet fuel prices declined in July and August. TISCO expects long-haul demand to improve as well, on top of strong Chinese demand that has continued since 2Q26.
TISCO also noted that China’s recovery is a change in character, not just volume. All hotel operators reported more Chinese guests and expected arrivals to be more sustainable. Today’s Chinese visitors are mostly independent or family travelers, unlike the pre-Covid period, when group tours dominated.
Hotel operators are expected to strengthen their balance sheets to support long-term ambitions. TISCO cited several moves aimed at continuing asset-light expansion and investing in core assets:
- Asset sales by MINT and AWC
- ERW’s planned IPO of its Hop Inn brand
- CENTEL’s refinancing
Renovation and repositioning remain the main growth engines for 2027 and 2028, with operators aiming for above-normal ADR growth. MINT plans to reposition its European hotels, CENTEL will open hotels in Krabi and Hua Hin, ERW has renovated the Grand Hyatt, and AWC will rebrand two hotels under the Melia brand.
The luxury segment shows the strongest demand, though it also has the highest supply. All operators plan to upgrade their luxury offerings despite continued supply growth in Bangkok. ADR in the segment keeps rising, which suggests demand remains firm. ERW noted that this creates room for growth in the midscale and economy segments, where it plans to expand.
Coverage companies are paying closer attention to operating costs, and some are using AI to help optimize operations.
Regulatory delays on project initiatives remain a drag for a few operators. TISCO noted, however, that progress on projects such as AOT’s AOTGA approval suggests a more stable political situation may bring more positive developments than delays.
On overseas expansion, all operators are fine-tuning existing investments while planning to increase exposure to both asset-heavy and asset-light projects.
