High season check
We believe that by end-2024, Thailand will have welcomed ~35.3mn international arrivals or 89% of pre-COVID-19 level, achieving our forecast; we maintain our 2025 forecast of 40mn arrivals to reach 100% of pre-COVID-19 level. Continuing from 2024, with visa exemptions as a foundational support, Thailand remains focused on boosting tourism to stimulate the economy. The high season for Thai tourism in 4Q24-1Q25 will support the sector. AWC and MINT are our top picks, backed by strong earnings outlook in 2025.
2024 forecast of 35mn arrivals achievable. In the 51st week of 2024 (December 16-22) 886,472 international tourists entered Thailand, up 15% WoW to make it the year’s highest week. From January 1–December 22, Thailand welcomed 34.4mn international tourists, growing 27% YoY to ~89% of pre-COVID-19 level. Backing this was 27.8mn arrivals from source markets (ex-China), up 17% YoY to ~100% of pre-COVID-19 level; China supplied 6.6mn arrivals, jumping 94% YoY to ~61% of pre-COVID-19 level. Despite robust growth in the Chinese market driven by pent-up demand and visa exemption measure, recovery has been slower than our estimate of 8mn tourists from China in 2024, primarily due to the slow economy in China. However, with strong recovery in other source markets (ex-China), we believe by the end of 2024, Thailand will have seen ~35.3mn international tourist arrivals, achieving our forecast of 35mn.
Expect 40mn international tourist arrivals in 2025. We maintain our forecast of 40mn international tourist arrivals in 2025 to reach 100% of pre-COVID-19 level but adjust the components to reflect the 2024 data. We now assume tourists from other source markets (ex-China) at 32mn, up 11% YoY to 110% of pre-COVID-19 level and from China at 8mn, up 20% YoY to 73% of pre-COVID-19 level. Continuing from 2024, with the visa exemption as a foundational support, the Thai government remains focused on boosting tourism to stimulate the economy. This includes collaboration with the governments and airlines of target countries to increase flight frequencies plus market campaigns specific to each country.
Operational stats suggest high season in 4Q24. The operational data from hotels shows QoQ growth in RevPar, indicating that the fourth quarter has been high season for AWC, CENTEL and ERW; MINT is the exception since its operations are heavily tied to hotels in Europe, where off-season RevPar will drop QoQ. At the same time, we believe there are company-specific factors to consider, especially for CENTEL, whose net profit in 4Q24 will be dragged by pre-operating expenses for its third and fourth new hotels in Maldives.
AWC and MINT are our top picks. In 2025, Thai tourism will continue to grow but hotelier earnings will be mixed in line with company-specific factors. We expect AWC to deliver the strongest core earnings growth in 2025 at 23% YoY underwritten by ramping up hotel operations. MINT’s core earnings are expected to grow 8% YoY in 2025. We view 2025 as an unexciting year for ERW (operations will have a short-term hiccup from a hotel renovation) and CENTEL (initial cost burden at two new hotels in Maldives.
Risks. Key risks are a global economic slowdown that would hurt consumer spending and willingness to travel, workforce shortage and cost inflation that would damage profitability. We see ESG risk as effective environmental management of greenhouse gases, energy, wastewater, and waste (E).
Download PDF Click > TOURISM241230_E.pdf
