Thai Tourism Stocks Poised for Recovery on Mideast Calm
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- Thai tourism arrivals totalled 510,000 in the third week of June, down 3% year-on-year, with Chinese visitors up 11%, Malaysians up 9% and Russians up 7%, while South Korean arrivals plunged 42% and Indian arrivals fell 10%.
- Thailand's hotel sector saw revenue per available room (RevPAR) return to positive growth across all listed operators in May, with sector RevPAR rising to low-to-mid single digits; S Hotels and Resorts improved to a 5% YoY contraction from 7% in April.
- KGI Securities maintained its overweight rating on Thai hotels, projecting 2026 sector earnings of 16.1 billion baht (up 7% YoY), noting valuations remain 5-12% below pre-conflict levels after the sector's sharp correction.
- Jet fuel prices averaged US$143.41 per barrel year-to-date, well below Krungsri Securities' $160 full-year assumption, offering direct cost relief for Thai airlines where fuel is the primary expense.
- International airline seat capacity for Thailand is expected to grow 3.5% in Q3—the strongest increase since Q1—partly as Chinese carriers relocate capacity from Japan, while nearly 4,000 Q2 cancellations tied to Middle East fuel shortages begin to ease.
- Thai hospitals under CGS coverage are projected to see Q2 aggregate revenue rise 4% YoY, with Bumrungrad (BH) and Praram 9 (PR9) leading on returning medical tourists from Myanmar and the Middle East following Ramadan.
- The Thai baht has weakened more than 5% year-to-date to around 33.30 per the US dollar, which KGI's Sirilak Konwai said significantly increases value for money for inbound visitors.
Why it matters: Thailand's tourism-linked equities are the clearest beneficiaries of Middle East de-escalation: jet fuel running roughly $16 per barrel below broker assumptions, hotel RevPAR turning positive after April's dip, and airline seat capacity set for its strongest growth since Q1 create a compounding tailwind that could lift KGI's 16.1 billion baht 2026 sector earnings forecast and close the 5-12% valuation gap left by the conflict.
