Korea’s casino companies profitable in 2022, travel agencies in 2023

Kangwon Land casino [Photo by Kim Jae-hoon]

South Korea’s casino companies turned profitable last year on the back of an increase in the number of domestic and foreign visitors as Covid measures were gradually lifted. Travel agencies, meanwhile, are still in the red, but are expected to turn profitable this year.

Kangwon Land Inc., which operates casinos exclusively for Koreans, turned to an operating profit of 217.6 billion won ($166.38 million) last year, according to the electronic disclosure system of the Financial Supervisory Service. Kangwon Land posted an operating profit of 501.2 billion won in 2019, but suffered a loss of 431.6 billion in 2020 and 52.7 billion in 2021. Its sales last year amounted to 1.27 trillion won, which was still less than 1.52 trillion in 2019 before the pandemic.

Paradise Co., which operates foreigners-only casinos and hotels and resort complexes in Seoul, Busan and Jeju also posted an operating profit of 10.4 billion won. Paradise posted an operating loss of 86.2 billion won in 2020 and 55.2 billion won in 2021. Its sales last year reached 587.6 billion won, which was also below 979.4 billion won in 2019.

Grand Korea Leisure Co., which operates foreigners-only casino Seven Luck Casino, suffered an operating loss of 13.9 billion won last year, but the loss significantly narrowed from the previous year’s 145.8 billion won loss.

This year, casino companies are expected to increase their profits significantly. According to financial information company FnGuide, securities firms projected Kangwon Land to post an operating profit of 403.5 billion won this year, up 85.4 percent from last year and its sales to recover to the pre-Covid level at 1.54 trillion won.

Paradise’ operating profit was also projected to reach 123.2 billion won this year and sales to return to the pre-Covid levels at 944.5 billion won. Grand Korea Leisure was also projected to achieve an operating profit of 95.3 billion won this year with sales of 490.9 billion won, similar to 490.8 billion won in 2019.

[Photo by Yonhap]

Travel agencies, however, remain in the red. HanaTour Service Inc. last year posted an operating loss of 101.2 billion won for three consecutive years from 2020.

Modetour Network Inc. and Very Good Tour Co. also suffered operating losses of 16.4 billion won and 15.8 billion won last year, respectively, continuing their losses for three consecutive years. These travel agencies, however, are expected to turn profitable this year due to an increase in tourists.

Securities firms expected HanaTour to achieve an operating profit of 16.5 billion won this year and Modetour 14.1 billion won. A report by a brokerage firm last month even predicted that HanaTour would turn profitable in the first quarter of this year.

“We have reduced our losses. It is true that there are expectations for a turnaround in the first quarter of this year,” an official from HanaTour said. “However, there was a special Lunar New Year holiday in January and February is a peak season, but March is an off-season, so we need to keep an eye on the situation.”

Last year, 3.2 million foreign tourists visited Korea, up 230.7 percent from a year earlier. In January this year, the number was 434,000, up 430.8% from the same month last year.