Central Plaza Hotel: Falling tourist numbers weighed down QTD RevPAR growth
- Hotel RevPAR growth QTD remained positive despite Thailand’s fluid inbound tourism
- ADR spike continues to be a key supporter in hotel business; improving RevPAR growth trend spotted in on-the-book data for June-August 2025
- Food business to continue being driven by firm JV performance; SSSG to contract slightly QTD from rising uncertainties
- Maintain BUY with an unchanged DCF-based TP of THB37.50
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No significant improvement in total inbound tourist numbers. We note that growth started to slow in February (-7% y/y), especially from China, given the Chinese New Year falling on January this year (vs. February in 2024) and the impact of a Chinese call centre scam concern in Thailand early this year. In March 2025, we saw that foreign tourists contracted 9% y/y following the early Ramadan festival and soft Chinese tourist numbers. In April 2025, inbound tourist numbers continued to decline 8% y/y.
The number of tourists in May 2025 was 2.3mn (-14% y/y) still dragged by Chinese tourist numbers and South Korean numbers, which dropped 45% y/y and 27%, respectively. In total, the number of foreign tourists from 1 January-31 May 2025 was 14.4mn – inching down 3% y/y.
We believe numbers bottomed out in May, with signs of Chinese tourist numbers improving . Generally, inbound tourist numbers hit their lowest point in May before we start seeing improvement m/m in June every year. YTD, Chinese tourists were still the biggest market feeders and contributed c.14% of total foreign tourists; followed by Malaysia (c.13%), India (c.7%), Russia (c.7%), and South Korea (c.5%).
We note that the y/y contraction of Chinese tourist has improved m/m since April after its 48% plunge y/y and only accounting 30% of pre-pandemic level in March 2025. In May 2025, the contraction reduced to 45% y/y and the monthly Chinese tourists accounted for 39% of the pre-pandemic level.
We expect gradual recovery to continue in the upcoming months after the government tried to promote Thailand tourism through the “Sawasdee Ni Hao” campaign under its own marketing budget. The initiative includes a mega fam trip in late May 2025, inviting 500 participants from across China – 300 tour operators and 200 media/KOLs.
Nonetheless, we note that The Tourism Authority of Thailand (TAT) has recently slashed its target of inbound tourist numbers from 39mn to 35.5mn for 2025, a similar level to 2024. TAT also lowered total tourism receipts to THB3tn (THB3.4-3.5tn previously).
TAT plans to launch tourism stimulus measures. TAT recently disclosed the details of new “We Travel Together” programme totalling 1.78bn. This project aims to stimulate domestic travel among Thai tourists during this year's low season. The number of available entitlements is expected to be 500k, with a cap of no more than five entitlements per person. Under the programme, there are two considerations for subsidy (cap THB3,000 per day).
First, the government will support 50% of the hotel room for weekdays stay and 40% for weekend and holiday stays. Or secondly, the government will subsidise 50% of key city travelling and 40% of second-tier city travelling. The programme is tentatively scheduled to launch from June 2025 during the low season.
TAT also has other projects to boost tourism, pending proposal to the cabinet for approval which include Joint promotion with Online Travel Agencies (OTAs) and travel promotion in partnership with airlines.
CENTEL’s performance QTD remains resilient
Increase in ARR outpaced the drop in AOR QTD. QTD management shared that the overall RevPAR growth was at 2% - inched down from RevPAR growth of 3% in 1Q25. The softer RevPAR growth was still held back by weaker performance in the Maldives (-46% y/y) after the new opening of Centara Grand Lagoon Maldives in April 2024.
Hotel RevPAR growth in other hubs stayed in positive territory during the period – led by higher average room rates (ARR) in both countries amid falling average occupancy rate from tourist’s slowdown.
Bangkok properties showed a big dip on AOR after a plunge in foreign tourist arrivals QTD. In contrast, upcountry assets in Thailand continued to perform well, supported by the completion of major renovation projects such as Centara Grand Mirage in Pattaya and Centara Karon despite the renovation of Centara Grand Huahin (from April 2025) and Centara Grand Krabi (from May 2025).
Hotels in Japan showed a robust growth in ARR following the strong tourism demand for Osaka Expo starting from mid of April 2025. The Maldives hotels, on the other hand, continued to face operational challenges, further weighed down by the launch of a new hotel in November 2024 (Centara Mirage Lagoon Maldives) and another new hotel in April 2025 (Centara Grand Lagoon Maldives).
Additionally, CENTEL's Dubai assets, which are accounted for via associate income, delivered steady RevPAR growth of 5% y/y QTD following the shift of early Ramadan in 2025, which significantly boosted performance in April 2025.
Hotel revenue growth was better than RevPAR. QTD, we estimate the hotel revenue growth for Thailand to be 5% y/y faster than RevPAR growth of 2% in the same period following Centara Grand Mirage Pattaya and Centara Karon fully reopening as well as their catering revenue recovery. Of the total portfolio, hotel revenue growth is forecasted to be 9% y/y vs. RevPAR growth of 1% with contribution of two new hotels in the Maldives.
Improving trend m/m in June to August in Bangkok. Based on preliminary advance booking information from CENTEL, Thailand RevPAR has shown firm recovery while RevPAR in Bangkok improved from -8% QTD to -3% in June and turned positive in July and August. Upcountry hubs’ RevPAR regarding on-the-book data still showed firm double-digit growth in June and July with mid- to high-single-digit growth in August 2025.
In June, RevPAR growth should remain robust and rise c.30% y/y. Nonetheless, with concerns on earthquake and volcano explosion in July, the company noted that RevPAR on advance booking is now flattish y/y before resuming mid- to high-single-digit growth y/y in August. The Maldives and Dubai, on the other hand, show the same trend with QTD data.
Food growth would still be driven by JV performance. On QTD data, food SSSG has turned -2% vs. +1% in 1Q25 – negatively affected by the rising global uncertainties which delay domestic consumptions as well as tourist slowdown during the period. Key brands like KFC and Mister Donut’s SSSGs were negative while Japanese brands like Ootoya and Katsuya’s SSSGs remained positive territory. Nevertheless, the considering food business including JV performance, the SSSG of JVs remained positive and would enhance overall food portfolio.
2Q25F performance to be driven by EBITDA margin expansion. Although we expect topline growth to be lacklustre in 2Q25F, we expect EBITDA margin to continue expanding, driven by hotel ARR growth, better cost leverage, as well as a growing share of profit from food JVs – amid higher SG&A expenses level from loss of the new hotel in the Maldives. Thus, we believe core profit growth should improve y/y, with stronger growth also expected in 2H25 alongside the resumption of growth in Thailand’s inbound tourism in 2H25.
Management maintains their latest 2025 guidance. Despite the soft tourism situation, at this stage, the company maintains its latest guidance for 2025 (announced after 1Q25 results) per below. Our assumptions are mostly in line with the company’s guidance, which we are maintaining our forecast at this juncture.
Recommendation
Maintain BUY with an unchanged DCF-based TP of THB37.50. We maintain our earnings forecast as 1Q25 results remain on track with our full-year forecast. We derive CENTEL’s TP based on DCF valuation with WACC of 8.9% and terminal growth of 1%. Given upside and firm profit growth for this year, we maintain our BUY call.
Quarterly / Interim Income Statement (THBmn)
FY Dec | 1Q2024 | 4Q2024 | 1Q2025 | % chg y/y | % chg q/q |
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Revenue | 6,100 | 6,006 | 6,423 | 5.3 | 6.9 |
Cost of Goods Sold | (2,342) | (2,652) | (2,418) | 3.2 | (8.8) |
Gross Profit | 3,758 | 3,354 | 4,005 | 6.6 | 19.4 |
Other Oper. (Exp)/Inc | (2,885) | (2,830) | (3,150) | 9.2 | 11.3 |
Operating Profit | 873 | 524 | 855 | (2.0) | 63.2 |
Other Non Opg (Exp)/Inc | 283 | 327 | 381 | 34.7 | 16.8 |
Associates & JV Inc | 1.30 | 121 | 31.7 | nm | (73.9) |
Net Interest (Exp)/Inc | (259) | (268) | (287) | (10.7) | (7.1) |
Exceptional Gain/(Loss) | 6.00 | 69.0 | (52.0) | nm | nm |
Pre-tax Profit | 904 | 773 | 929 | 2.8 | 20.2 |
Tax | (117) | (137) | (167) | 42.5 | 21.9 |
Minority Interest | (30.0) | 30.8 | (13.7) | 54.2 | nm |
Net Profit | 756 | 666 | 748 | (1.1) | 12.3 |
Net profit bef Except. | 750 | 597 | 800 | 6.6 | 34.0 |
EBITDA | 2,013 | 1,779 | 2,144 | 6.5 | 20.5 |
Margins (%) |
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Gross Margins | 61.6 | 55.8 | 62.4 |
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Opg Profit Margins | 19.0 | 16.2 | 19.7 |
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Net Profit Margins | 12.4 | 11.1 | 11.6 |
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Source: DBSVTH, Company
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