Government measures to contain the spread of Covid-19 infections across Bangkok and other five red-zoned provinces will likely have a negative impact on the tourism sector, analysts said Friday, adding that the downside risk was limited.
The return of a 14-day mandatory quarantine for all oversea arrivals regardless of their vaccination status from May will put a downward pressure on Thai tourism businesses, said Napat Vorajanyavong, an analyst at KGI Securities.
“We expect the fundamental impact to be limited since Thai tourism is now tied to the domestic market,” the analyst noted.
The most vulnerable stock is The Erawan Group (ERW) given its reliance on hotels within Thailand, while Minor International (MINT) should be in a better position as around 70 per cent of its revenue is from hotels located in European countries, he said.
Following the temporary ban on dine-in services at restaurants, Napat said Central Plaza Hotel (CENTEL) would be affected the most as its restaurant operation accounts for around 60 per cent of the company’s top line.
“Growth in delivery service could partly mitigate the downside risks.’ he added.
A research from Asia Plus Securities stated that stocks related to restaurants such as MK Restaurant Group (M) and After You (AU) would be facing damage from the dining restriction.
However, Asia Plus said that most stocks in the sector have already responded to the concern over the outbreak situation from the past, citing that investors could look for a chance to collect shares for a rebound in the future.
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