Institutional investors are showing renewed interest in Thailand’s tourism sector following recent market corrections, although most remain cautious amid ongoing geopolitical tensions, according to Maybank Investment Bank.
The research house said it met with 19 institutional clients across Malaysia and Singapore last week, noting a marked increase in interest in Thai tourism counters compared with late 2025.
“While the majority of investors remain underweight on Thailand, several funds are beginning to explore opportunities in the real sector, supported by improving political stability,” it said.
The sector, which had previously been overlooked due to low dividend yields and high gearing levels, is now attracting attention after a recent correction triggered by the Middle East conflict, which has brought valuations down to more attractive levels.
However, investors remain cautious, with key concerns centred on the potential for prolonged geopolitical tensions and rising airfares, which could dampen travel demand.
At the same time, some investors see a potential upside scenario, where heightened tensions in the Middle East could redirect Asian travellers toward regional destinations such as Thailand, instead of long-haul trips to Europe via Gulf transit hubs.
Among stocks under discussion, investors have shown particular interest in Minor International (MINT) and Bangkok Airways (BA), which are viewed as relatively defensive plays within the sector.
That said, concerns remain. For MINT, expansion through its asset-light hotel platform could face constraints, as a significant portion of its pipeline is linked to Middle Eastern partners.
Meanwhile, BA’s exposure to rising fuel costs continues to be a key risk, with the airline having hedged only about 30% of its fuel consumption for FY2026.
Despite these concerns, Airports of Thailand (AOT) remains Maybank’s top pick, as it is expected to be less affected by the conflict and could potentially benefit from an increase in transit and transfer passengers as confidence in Middle Eastern aviation hubs takes time to recover.
Nevertheless, some investors remain sceptical about near-term travel demand, particularly for the upcoming summer travel season, despite a pickup in international passenger traffic in March 2026.
On the supply side, flight services from several Gulf states have begun to gradually resume, although operating capacity remains below half of pre-conflict levels.
While this period typically represents a low season for European and Middle Eastern arrivals to Thailand, concerns are growing over whether inbound travel — particularly from the Middle East between June and August — will fully recover in time for the peak season.
Within the hospitality segment, The Erawan Group (ERW) is Maybank’s preferred pick, supported by strong earnings growth prospects from its HOP INN budget hotel chain ahead of a planned spin-off in 2027, as well as its attractive valuation.
For airlines, the research house continues to favour Bangkok Airways over peers such as Thai Airways and Asia Aviation, citing its resilient passenger yields and strong forward bookings for its key Samui route, which accounts for the majority of its ticket revenue.
“Overall, while investors are maintaining relatively small exposure for now, many are waiting for clearer signs of de-escalation before increasing allocations to the sector,” Maybank said.
