On Wednesday at 11:29 AM (Bangkok time), the share price of The Erawan Group Public Company Limited (SET: ERW) dropped by 2.84% or THB 0.12 to THB 4.10, with a trading value of THB 139.34 million.
Trinity Securities anticipates ERW to likely experience a temporary downturn in sentiment following the recent incident involving the death of foreigners at the Grand Hyatt Erawan hotel. This development may have adverse effects on client confidence and could potentially slow down tourist activity. With Grand Hyatt Erawan contributing approximately 20% of ERW’s revenue, the repercussions of this event are significant.
Meanwhile, the land lease agreement for Grand Hyatt Erawan is currently under negotiation and is renewed on an annual basis. Trinity Securities predicted that the long-term renewal of this agreement could result in higher fees but might be counterbalanced by an increase in the Average Daily Rate (ADR).
The analyst does not foresee any immediate impact on ERW’s 2024 earnings from the long-term lease agreement, given its annual renewal cycle.
