Thailand Tourism Downturn Impact on HK-Listed Aviation & Tourism Companies

Based on the data I collected, this is a comprehensive analysis of the impact of Thailand’s tourism downturn on the performance of HK-listed aviation stocks and tourism-related companies.

According to the latest data, Thailand’s tourism industry experienced its first downturn in a decade in 2025:

• Visitor volume
  : As of December 28, 2025, Thailand received a total of 32.6 million foreign tourists, a drop of over 7% compared to the same period the previous year [1]
• Tourism revenue
  : Decreased from 1.67 trillion Thai baht to 1.5 trillion Thai baht [1]
• Chinese tourists
  : 4.4 million, making it Thailand’s second-largest source market (after Malaysia’s 4.5 million)
• Reasons for the downturn
  : Severe floods in southern provinces, border tensions with Cambodia, a strong Thai baht, and safety concerns [1]

:

• Stock price: HK$12.43, market capitalization: HK$80.04 billion
• 1-year gain: +31.95%, strong performance
• H1 2025 passenger revenue: HK$37.212 billion (+12.7%) [0]

:

• Southeast Asia and Oceania are among Cathay Pacific’s key markets
• H1 2025 available seat kilometers (ASK) for the region reached 174.92 billion (+20.9%) [2]
• Load factor increased to 82.5% (+5.3 percentage points), but yield decreased by10.7% [2]

:

• Direct impact limited: Southeast Asia routes account for a relatively small share of Cathay’s total capacity (approximately15-20%)
• Indirect negative impact: The10.7% yield decline reflects pressure on ticket prices, partly due to weak demand from Thailand
• Capacity reallocation: Cathay may shift some Thailand capacity to other high-demand routes (e.g., Japan, South Korea)
• Cargo business buffer: Cathay’s cargo business remained stable, with H12025 revenue of HK$12.761 billion [2]

####2. Hong Kong China Travel Service (0308.HK) - Significant Negative Impact

:

• Stock price: HK$1.29, market capitalization: HK$7.14 billion
• 3-month decline: -22.29%, recent pressure is obvious
• Negative EPS: -HK$0.01, weak profitability [0]

:

• Hong Kong China Travel Service’s business covers travel agencies, hotels, scenic spot operations, etc., directly benefiting from outbound tourism demand
• As a traditional popular outbound tourism destination, Thailand’s demand decline directly affects its travel agency business revenue
• Q22025 EPS was -HK$0.02, revenue was HK$1.97 billion, a significant drop from Q1’s HK$2.49 billion [0]

:

• Significant direct impact: Thailand tourism business accounts for a considerable share of its outbound tourism business (estimated 10-15%)
• Performance pressure is obvious: Recent sharp stock price decline reflects market concerns about performance
• Business diversification buffer: The company also operates domestic tourism business, which can partially offset the impact

####3. Other HK-listed Aviation Stocks - Moderate Impact

:

• China Eastern Airlines (0670.HK): HK$5.33 (+4.92%)
• Air China (0753.HK): HK$7.07 (+3.36%)
• China Southern Airlines (1055.HK): HK$5.82 (+4.30%)

:

• Chinese airlines also face challenges from declining demand for Thailand routes
• Some airlines have shifted capacity to alternative destinations such as Japan and South Korea [3]
• The aviation sector has performed actively recently driven by New Year’s Day holiday expectations [3]

###3. Quantitative Impact Estimation

####Impact on Cathay Pacific’s Performance:

• Assumptions
  : Southeast Asia routes account for15% of passenger revenue, Thailand accounts for 30% of Southeast Asia
• 7% decline in Thailand demand
  → ~2.1% reduction in Southeast Asia passenger revenue
• Overall passenger revenue impact
  : ~-0.3% to -0.5% (relatively small)
• Yield impact
  : Already reflected in the10.7% yield decline, partly due to Thailand ticket price pressure

####Impact on Hong Kong China Travel Service’s Performance:

• Assumptions
  : Outbound tourism business accounts for40% of total revenue, Thailand accounts for15% of outbound tourism
• 10% decline in Thailand tourism revenue
  → ~1.5% reduction in outbound tourism revenue
• Overall revenue impact
  : ~-0.6% to -1.0%
• 叠加效应
  : Other Southeast Asian destinations also have weak demand, so the actual impact may be larger

###4. Industry Response Strategies and Outlook

####1. Capacity Reallocation

• Airlines shift capacity from Thailand routes to alternative destinations like Japan and South Korea
• According to Morgan Stanley data, since mid-January2025, bookings for regular flights to Thailand have increased by nearly 40%, partially offsetting losses from Japan routes [3]

####2. Ticket Price Strategy Adjustment

• To maintain load factors, airlines may adopt more aggressive pricing strategies
• This will lead to continued yield pressure, but can be partially offset by cost control (e.g., lower oil prices) [3]

####3. Long-term Fundamentals Remain Positive

• A stronger RMB reduces aviation fuel costs
• Growth in inbound tourism brings new opportunities for airlines
• Continuous recovery of business travel enhances pricing power [3]

###5. Investment Recommendations and Risk Warnings

####Short-term Impact (1-6 months):

• Cathay Pacific
  : Impact limited, maintain “Hold” rating, watch for yield improvement signals
• Hong Kong China Travel Service
  : Significant pressure, short-term recommendation to wait and see, await Thailand tourism demand recovery signals

####Mid-term Impact (6-12 months):

• Key Observation Indicators
  :

1. Thailand tourism policy adjustments (e.g., visa facilitation)
2. Thai baht exchange rate trends
3. Signs of improvement in China-Thailand relations
   4.2026 Spring Festival holiday outbound tourism data

####Long-term Impact (1-3 years):

• Structural changes
  : Chinese tourists’ outbound tourism preferences may diversify, reducing reliance on Thailand as a single destination
• Industry consolidation
  : Small tourism operators may exit the market, leading to increased market share for leading enterprises
• Business transformation
  : Tourism companies accelerate development of domestic tourism and emerging destination businesses

###6. Conclusion

The impact of Thailand’s tourism downturn on HK-listed aviation stocks and tourism-related companies shows a differentiated trend:

1. Cathay Pacific
   : Impact relatively mild, Southeast Asia routes account for a low share, and business diversification (passenger + cargo) provides a buffer. Expected impact on 2025 full-year performance is less than2%.

2. Hong Kong China Travel Service
   : Significant impact, outbound tourism business directly under pressure, stock price already reflects some pessimistic expectations. Expected impact on 2025 performance is 3-5%.

3. Other aviation stocks
   : Indirect impact, need to monitor overall international route recovery progress.

: The impact of Thailand’s tourism downturn on the performance of relevant HK-listed companies is manageable but uneven. Investors should focus on capacity reallocation efficiency, yield trends, and2026 Spring Festival holiday outbound tourism recovery signals—these will be key indicators to judge the sustainability of the impact.

[0] Jinling API Data - HK-listed company financial data and stock price information
[1] Sina Finance - “Thailand’s2025 foreign tourist arrivals decline for first time in decade” (https://finance.sina.com.cn/world/2026-01-01/doc-inheuwcp4505261.shtml)
[2] Cathay Pacific2025 Interim Results Report - Southeast Asia and Oceania regional operation data (https://www.cathaypacific.com/content/dam/cx/about-us/investor-relations/announcements/zh/2025_cx_interim_results_zh.pdf)
[3] Yahoo Hong Kong Finance - “China-Japan diplomatic disputes persist, Chinese airlines’ hopes of returning to profitability weaken” (https://hk.finance.yahoo.com/news/中日外交爭端持續-中國航司��*復盈利的希望減弱-002148524.html)