KGI Securities noted in its report that tourism in Thailand experienced a notable resurgence in 2024, with tourist arrivals climbing to 35.5 million, marking a 26.3% year-over-year increase. The analyst expected the upward trend to persist into 2025, with anticipated arrivals reaching 38 million, suggesting a steady march towards pre-pandemic levels seen in 2019.
Meanwhile, KGI’s projection for tourist arrivals in Thailand is less optimistic than the Ministry of Tourism and Sports, which targets 39-40 million. The analyst anticipated growth in Chinese visitors year-over-year, albeit a slower trajectory due to China’s domestic travel push.
Notably, from January 1 to March 16, 7.29 million international tourists came, primarily from China, Malaysia, Russia, India, and South Korea.
As for the hotel sector, the industry is expected to benefit significantly from the peak tourism season in early 2025, with the government also planning initiatives to bolster the sector, including relaunching successful programs like Rao Tiew Duay Kan (We Travel Together).
In addition, exposure from popular media, such as the filming of White Lotus Season 3 in key locations such as Bangkok, Phuket and Samui, is likely to attract more tourists going into 2Q and 3Q despite the period being a low season. According to guidance from Minor International Public Company Limited (SET: MINT), the show is expected to increase the average daily rate (ADR) by 40% for the associated hotels.
Regarding the food segment, despite comparatively lackluster performance in recent years, the business is anticipated to witness renewed growth, driven by prominent international brands. Forecasts from Mordor Intelligence predict a compound annual growth rate of 8% between 2024 and 2029, as established chains expand in major urban centers like Bangkok, Pattaya and Chiang Mai.
Following these developments, KGI Securities remains optimistic about the Thai hotel sector, anticipating continued recovery over the coming years, and therefore maintains an ‘Overweight’ rating.
The analyst chose The Erawan Group Public Company Limited (SET: ERW) as the top-pick stock, thanks to its robust foundation in budget hotels and ongoing expansion, giving an ‘Outperform’ rating with a 2025 target price of THB 5.20 per share.
