Hotels and airlines defy Middle East crisis with Q1 profits

Thailand’s major listed hotel and aviation businesses managed to stay profitable in the first quarter of 2026, despite pressure from the Middle East conflict and growing uncertainty over energy and travel costs.

The conflict began in late February, but its impact on Thai tourism businesses was still limited during the first three months of the year. Thailand was in its high season, while travel from the Middle East was in a low-season period, meaning arrivals from that region were not a major factor.

The recovery of Chinese tourists, continued growth from long-haul markets such as Europe and the United States, and extended stays by foreign visitors stranded in Thailand due to airspace closures in the Middle East also helped support business performance.

Cost control and risk management played a key role in cushioning the impact. However, operators are expected to face a tougher second quarter, as higher oil prices and rising airfares begin to weigh more heavily on travel demand.

Airlines and airports post combined profit of 18.7 billion baht

Thailand’s aviation sector delivered strong results in the first quarter, with Thai Airways, Bangkok Airways, Thai AirAsia and Airports of Thailand posting combined profits of more than 18.7 billion baht.

Of this, the three airlines recorded combined profits of more than 13 billion baht, while Airports of Thailand posted a profit of more than 5 billion baht.

Thai Airways International reported a net profit of 10.107 billion baht, up 2.7%, driven mainly by effective cost management. The airline hedged around 50% of its fuel needs, reduced financial costs by converting aircraft lease contracts into purchases for Boeing 777-300ER and Airbus A320-200 aircraft, and managed production capacity more efficiently.

Although revenue slipped 1.2% to 51.029 billion baht, mainly due to a 3.5% decline in passenger production and transport volume, Thai Airways still carried 4.18 million passengers. Passenger yield, including fuel and insurance surcharges but excluding excess baggage fees, remained close to last year’s level, while revenue from European routes increased.

The Middle East situation also worked in Thai Airways’ favour in some areas, as more passengers turned to its non-stop flights. As of March 31, 2026, the airline had cash on hand of 132.32 billion baht.

Bangkok Airways posted a net profit of 2.099 billion baht, up 24.5%, helped by lower fuel consumption and reduced aircraft lease costs. Revenue still grew slightly, supported by a 20.8% increase in airport-related business revenue, although ticket revenue and passenger numbers fell by 5.2% year on year.

Bangkok Airways president Puttipong Prasarttong-Osoth said the airline cut passenger production by 11.8% in the first quarter after reducing flights on the Bangkok–Phnom Penh route and suspending services on the Bangkok–Lampang and Lampang–Mae Hong Son routes.

He said the company had focused on managing routes with appropriate travel demand and seat capacity amid significantly higher operating costs caused by geopolitical tensions in the Middle East since late February.

Thai AirAsia saw profit weaken, with net profit falling 39% to 840.6 million baht despite a 4% rise in revenue to 14.057 billion baht. The decline was attributed to higher operating costs, cuts to international routes and foreign-exchange losses.

Airports of Thailand reported a net profit of 5.718 billion baht for its fiscal second quarter from January to March 2026, up 13.16%, while revenue rose 3% to 18.443 billion baht.

Aviation-related revenue accounted for 9.827 billion baht, or 53% of total revenue. AOT is continuing efforts to increase the share of aviation income to reduce reliance on commercial revenue.

Luxury hotel groups deliver strong gains

Hotel operators also recorded broad profit growth, with several companies hitting record highs.

Dusit Thani posted one of the strongest performances, with net profit surging 420.94% to 249.32 million baht on revenue of 3.27 billion baht, up 37%.

The jump was driven mainly by the transfer of residential units at the Dusit Central Park project and higher hotel revenue, despite a decline in foreign tourist arrivals to Thailand in the first quarter.

The company’s owned hotels recorded a 17% increase in revenue per available room, supported by higher occupancy and room rates, especially at Dusit Thani Bangkok. While the Middle East conflict reduced hotel management income from the region, overall management revenue still grew year on year.

Asset World Corp, or AWC, reported the highest hotel-sector profit among the companies cited, with total revenue of 6.776 billion baht, up 9.5%, and net profit of 1.986 billion baht, up 0.9%. EBITDA rose 3.3% to 3.531 billion baht, with all three figures reaching new highs.

AWC attributed the performance to growth from existing assets, income from new properties and greater operational efficiency across business groups. The company maintained a strong financial position, with an interest-bearing debt-to-equity ratio of 0.87 times.

AWC chief executive and president Wallapa Traisorat said the first-quarter results reflected quality growth across the company’s hotel and commercial portfolio under its Sustainable Growth-Led Strategy.

She said high-quality demand remained the main growth driver for AWC’s hotel and commercial businesses. Revenue from hotels and hospitality rose 12% to 4.078 billion baht, led by properties in key destinations, especially Chiang Mai, where RevPAR grew 26%.

Central Plaza Hotel, or CENTEL, recorded a net profit of 1.077 billion baht, up 27%, on revenue of 6.975 billion baht. The growth was mainly supported by more efficient cost management in the food business and stronger performance from renovated hotels, including Centara Grand Mirage Beach Resort Pattaya and Centara Karon Resort Phuket.

Centara Mirage Lagoon Maldives also improved significantly, while Centara Grand Lagoon Maldives, which opened in April 2025, continued to show better performance.

Minor International, or MINT, posted revenue of 38.488 billion baht, up 5%, and net profit of 649 million baht, up 56%. The increase was supported by higher RevPAR in several countries, particularly Italy, Thailand and the Maldives.

MINT also benefited from its asset-light strategy, which reduced fixed costs, as well as growth in its food business, supported by Nomad Foods in Australia and new restaurant brands expanding through franchises in Singapore, India and Indonesia.

S Hotels and Resorts, or SHR, achieved a record net profit of 264 million baht, up 51% year on year, driven by strong high-season performance at its key hotels in Thailand and the Maldives.

SHR chief executive Michael David Marshall said the Middle East conflict was one of the key pressures on the company’s operations. He said SHR had become more cautious while pursuing proactive marketing strategies to seek replacement markets and manage expenses efficiently.

He said the approach should help maintain business stability and support the company’s 2026 performance targets.

Laguna Resorts & Hotels, or LRH, was the only major hotel operator cited to report a weaker profit. Its net profit fell 27.40% to 494 million baht, although revenue remained high at 2.503 billion baht.

The decline was mainly caused by lower revenue from property transfers and sales, in line with market conditions. However, its hotel and service businesses remained strong and continued to grow.