The reopening of China is providing an important tailwind for the group. Retail and duty-free sales should increase with the comeback of tourists. Yet, we note that for the time being, tourists’ spending power appears to be limited because of inflation. Revenue growth is expected to exceed 120%!
This could be undermined by shifts in the mix of visitors and spending patterns, causing revenue to miss consensus expectations by about 15%. Tourists from Southeast Asia tend to spend less, and purchasing power has fallen with inflation. Retail concession revenue will likely lag passenger volume even when historically higher-spending Chinese visitors return to destinations such as Bangkok, Chiang Mai and Phuket, as lower tariffs have spurred them to buy more imported goods.