From High to Low!? A Tourism Stock during the Holiday Season
During an holiday season, tourism should be a stimulator amid economic recession, but why all tourism-related stocks are all plunged?
In fact, during the holiday season, the tourism industry sector should be a stimulator amid the economic recession, the season of tourists flowing to Thailand, but why all tourism-related stocks are all plunged?
Last year as the statistic of the Ministry of Tourism and Sport indicated that Chinese tourist is the biggest proportion of all foreigner visitors with the percentage approx. 28% and the Chinese New year is coming soon, it is such a perfect timing of the Thai economy to recover, but not everything will go as the expectation.
During the New Year holiday, the whole world was attacked by the outbreak of an unfamiliar disease, the new Coronavirus, which now has been confirmed that can pass human-to-human. The outbreak first found in Wuhan, China. The death of Coronavirus has hit 17 in China. Currently, the Chinese Government ordered to lockdown the Wuhan City by suspending all public transportations, to control the Coronavirus outbreak.
The uprising of Coronavirus among Chinese people right now affects Thailand directly, especially the tourism sector stock as Chinese is a major visitor of the country.
The first effect on tourist-related business that could be seen right now is the Airport of Thailand Public Company Limited (AOT)’s stock, following the outbreak, it requests an intensive check on immigration, causing the decrease of travelers which affects a company’s profit.
Secondly, all the airline companies that mostly rely on Chinese tourists such as Asia Aviation Public Company Limited (AAV) or Air Asia, Nok Airline Public Company Limited (Nok) or Nok Air and Thai Airways International Public Company Limited (THAI) or Thai Airways. With the decrease significantly of Chinese people, those airlines will have a serious impact.
In the case of Bangkok Airways Public Company Limited (BA) or Bangkok Airways even the airline was not mainly depend on Chinese passengers, but the overall foreigner tourists will deduct.
Lastly, the hotel retailers group, like the Erawan Group Plc. (ERW), Central Plaza Hotel Plc. (CENTEL) and Minor International Plc. (MINT).
Following the outbreak, many investors have already dumped those tourism stocks and be a cause of share price slump many days in a row.
It will be a long-term or short-term crisis, the answer is depending on the management of an involved authority in Thailand.