Dao rates tourism stocks as Q4 recovery continues, arrivals up 8% WoW, highlights CENTEL and ERW

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Dao Securities rates the tourism sector "overweight" after tourist arrivals in the week of September 27 to October 3 rebounded 8% WoW, better than expected thanks to the Golden Week period, with the increase driven mainly by travellers from China, India and Russia. Excluding Malaysian tourists, arrivals still rose 10% WoW and 6% YoY, while Chinese tourists rose 2% YoY, slowing from 19% YoY the previous week. The research team believes arrivals bottomed out in the second quarter of 2026 and will recover strongly in the fourth quarter of 2026 on the high season and several events in December 2026. It expects total arrivals in 2026 at 32 million, down 3% YoY from 33 million in 2025, which itself fell 7% YoY, and forecasts Chinese tourists in 2026 at 4.8 million, up 7% YoY from 4.5 million in 2025, which fell 34% YoY. The stocks that benefit, ranked by their share of domestic hotels from highest to lowest, are ERW, CENTEL, MINT and SHR. CENTEL is the top pick with a target price of 48.00 baht, as third-quarter 2026 RevPAR excluding Dubai rose 5% YoY and fourth-quarter 2026 on-the-book bookings rose 13% YoY. ERW, with a target price of 4.20 baht, benefits from the World Bank and IMF meetings in October 2026 and Tomorrowland in December 2026, with bookings continuing to push the occupancy rate as high as 80% already.

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