Hospitality and tourism-related stocks will be buoyed by the cabinet's approval of a tax deduction of up to 15,000 baht for travel and shopping expenses in secondary provinces, says Asia Plus Securities (ASP).
Some 55 provinces across the country are eligible for the tax deduction. The measure is aimed at boosting expenditures in areas with low tourist spending.
Consumers can use receipts or tax invoices from operators as proof for tax deductions, said ASP vice-president Terdsak Taweethiratham.
"This economic measure will benefit tourism, travel and consumer stocks such as the Erawan Group Plc (ERW), Minor International Plc (MINT) and Central Plaza Hotel Plc (CENTEL)," Mr Terdsak said. "It is expected that Erawan Group will reap the most benefit because the company has generated most of its revenue from local hotels, with different levels of accommodation ranging from luxury to budget hotels."
The company's hotel locations also cover all Thai locations, including secondary provinces, especially the Hop Inn brand, he said.
As of Sept 30, Hop Inn hotels had 28 Thai branches with 2,186 total rooms. There are 48 budget hotels and 6,999 rooms in the domestic hospitality industry, ASP said.
The share price of Erawan Group has upside potential of 7%, so Mr Terdsak suggests that investors wait until the price falls before accumulating shares.
ASP forecasts Thailand's economy to expand by 4.2% next year, up from 3.8% projected this year, thanks to growth in exports and private investment continuing to rise.
"The factor supporting an increase in next year's private investment is Board of Investment applications for the 10 targeted industries in the Eastern Economic Corridor totalling 380 billion baht," Mr Terdsak said.
The government's infrastructure development projects have a total investment value of 2.4 trillion baht during 2015-22.
Even if about 400 billion baht worth of infrastructure projects, some 17% of total investment, begin construction next year, projects worth 920 billion are also expected to open for bidding in 2018, Mr Terdsak said.
Other economic stimulus packages such as welfare cards for low-income earners are expected to help spur household consumption next year, he said.
