Most SET-listed companies in tourism-related industries such as airlines and hotels posted improved operating results in the first quarter, thanks to the global economic rebound and the removal of restrictions by the UN's aviation body.
The International Civil Aviation Organisation's lifting of the red flag on Thai aviation last October prompted airlines to spread their wings throughout the region, with analysts anticipating that Thailand's tourism business will continue to grow this year, with China dominating the market.
But analysts tempered their expectations for the second and third quarters, as that is the low season for tourism.
Amnart Ngosawang, an analyst at KTB Securities Co, said Thai tourism has been robust since late last year, resulting in positive results for listed companies in the first quarter.
He said factors driving growth include improving business sentiment and domestic and regional airlines expanding their networks in the region.
Some major full-service airlines, particularly from Europe and the Middle East, have branched out into Thailand and Asean over the past 12 months, carrying more passengers to the region.
"Airlines based in Thailand can now increase capacity to existing destinations or open new routes after ICAO removed the red flag on Thailand last October," Mr Amnart said.
The easing of restrictions prompted airlines registered here to expand into China, an emerging market for the airline and travel business, he said.
Over the past six months, all airlines have put more effort into marketing and promotions to boost passenger numbers both locally and regionally, resulting in a positive response for the first quarter.
Asia Aviation Plc, the major shareholder of Thai AirAsia Co (TAA), earned total revenue of 11.6 billion baht and a net profit of 1 billion for the first quarter. TAA's average load factor was 91%, compared with 89% for the same quarter of 2017.
The growth was attributed to network expansion, especially to secondary provinces. Passengers totalled 5.64 million, up 16%. During the first quarter, TAA received three aircraft, pushing its fleet to 59.
TAA said it will continue to focus on Cambodia, Laos, Myanmar and Vietnam by increasing flight frequencies. With a strong base in China, the airline is also seeking new opportunities in the high-potential market of India.
This year, the airline aims to serve 23.2 million passengers and maintain a load factor of 87%. TAA plans to add seven new aircraft throughout the year.
In the first quarter, Bangkok Airways Plc posted revenue of 7.8 billion baht and a net profit of 719 million, rising 4.8% and 27.3% year-on-year, respectively.
Bangkok Airways carried 1.76 million passengers in the first quarter with a passenger load factor of 76.4%.
Sales to international passengers rose from 52% to 56%, with the largest increase from point-of-sale operations in Europe, Asia and North America.
Itsara Lertsudkanung, an analyst at AEC Securities Co, said Bangkok Airways will continue to benefit from tourism growth because it has more connecting routes in the region.
He said more tourists from Europe and the Middle East will travel to Thailand and Indochina this year because major European and Mideast airlines have opened new routes in Southeast Asia.
"Interestingly, airlines in Thailand and Indochina have opened more connecting routes," Mr Itsara said. "This has prompted big airlines in far-away markets like Europe and the Middle East to operate long-haul flights in our region."
He said airlines based in Thailand have also expanded overseas, mainly to China, India and other destinations in Southeast Asia.
THAI turns to profit
Thai Airways International Plc (THAI) and its subsidiaries posted first-quarter revenue of 53.4 billion baht and a profit of 2.73 billion, rising 7.4% and 13.6% from the same period of last year, respectively.
The positive result stemmed form higher revenue earned from growing passenger numbers and excess baggage, freight and mail.
But an aviation analyst reiterated that the low tourism season could hit the national airline and other carriers.
For THAI, if it is unable to secure a large number of advance bookings for the high season, which normally starts in October, it could be hard to turn a profit for the entire year, the analyst said.
Nok Air Plc, the sister airline of THAI, posted a net loss of 32 million baht in the first quarter, albeit an improvement from a 295-million-baht loss in the same period of 2017. The airline recently unveiled strategic plans to regain passenger confidence, bolster its image and offer promotions.
Hotels' robust results
Apart from the airline business, hotels and other related business such as food, airports and real estate also experienced positive first-quarter results.
Central Plaza Hotel Plc posted its highest net profit in history after raising its bottom line 12.8% year-on-year to 883 million baht in the first quarter. The positive result was driven by a recovery in the meetings, incentives, conferences and exhibitions (Mice) segment, as well as continued growth in international tourists arrivals.
During the quarter, Dusit Thani Plc, Erawan Group Plc and Airports of Thailand Plc all reported double-digit growth, with net profits rising by 85.5%, 38% and 12.3%, respectively.
Minor International Plc reported a revenue rise of 11% to 16.1 billion baht, driven mainly by growth of all three business units: hotel, lifestyle and food. But profit fell from 1.92 billion baht in the first quarter of 2017 to 1.71 billion this year.
Delivery service threat
An analyst from Maybank Kim Eng Securities Thailand said food operators have faced intensifying competition as the number of shops and restaurants continues to grow larger.
Moreover, Line, Grab and other delivery service operators are penetrating the market with attractive promotions.
