The Erawan Group (ERW) Q2 2025 earnings summary

Executive summary

• Q2 2025 saw a 12% YoY drop in Thai tourist arrivals, mainly due to a sharp decline in Chinese and South Korean visitors, an earthquake, and geopolitical concerns, leading to a challenging environment.

• Despite headwinds, disciplined cost management, stable customer retention, and growth from Indian, Middle Eastern, and European markets supported performance, with domestic demand aiding the budget segment.

• The group adjusted strategies, focusing on rate adjustments, volume business, and marketing to resilient markets.

• Effective pricing, customer base expansion, and cost control supported profitability and future growth.

Financial highlights

• Q2 2025 revenue was THB 1,754 million, down 5% YoY; EBITDA was THB 495 million, down 9% YoY; net profit was THB 63 million, down 51% YoY.

• H1 2025 normalized revenue grew 1% YoY to THB 3,890 million; EBITDA rose 3% YoY to THB 1,280 million; net profit was THB 408 million, down 1% YoY.

• Budget segment revenue grew 16% YoY in Q2 2025, with EBITDA margin at 40.9%.

• Gross profit margin in Q2 2025 was 54.5%, down from 55.9% in Q2 2024.

• Cash on hand at end-Q2 2025 was THB 1,206 million.

Outlook and guidance

• Full-year 2025 revenue growth guidance revised down to 3–5%, with luxury to economy segments expected to be flat and budget hotels revised to 20% growth.

• Q3 is trending better than Q2, with Q4 expected to improve further, though visibility remains low for short-lead Asian markets.

• Key strategies include portfolio expansion, asset enhancement, optimizing pricing, and cost efficiency.

• 10 new hotels (789 rooms) planned to open in Thailand in 2025.

• Risks include slow Chinese tourist recovery, regional disputes, global economic uncertainty, and climate change.