As the number of foreigners visiting Korea steadily increases, casino stocks, which are considered beneficiaries, have seen their stock prices reach record highs. The direction of casino stocks will likely depend on how much the number of foreign tourists recovers from the 'transfer' of the Terminal High Altitude Area Defense (THAAD) crisis in 2016.
According to the financial investment industry on the 12th, Lotte Tour Development stocks are currently trading in the 10,000 won range on the KOSPI market this month. The stock price has increased by more than 50% compared to the beginning of the year. PARADISE and GKL have shown stock price increases of 28% and 7%, respectively, compared to the beginning of the year.
The increase in casino stocks this year is due to signs of performance improvement. In the case of Lotte Tour Development, casino sales last month reached 32.9 billion won, marking a 61.3% increase from the same period last year. The casino table drop amount (the money customers spend on purchasing chips at table games) was 17.7 billion won, a 47.2% increase compared to the same period last year. The cumulative casino sales and table drop amount for Lotte Tour Development from January to April also increased by 29.9% and 27.7% respectively compared to the same period last year.
The improvement in the performance of casino companies is thanks to the increase in inbound visitors. As of March this year, the number of foreign tourists entering the country reached 1,614,596. This is the highest number of monthly entries since the COVID-19 pandemic emerged in 2020. In January this year, there were 1,117,243 entries, and in February, 1,138,408, all showing an increase compared to the same period last year.
In the first quarter of this year (January to March), the number of entries from China exceeded 1 million, increasing by 11% compared to the same period last year, while the number of entries from Japan increased by 19.1%, nearing 900,000. The number of inbound visitors from Southeast Asia to Korea is also recording an average double-digit growth rate.
Recent expansions at Incheon International Airport and the increase in airline routes are believed to have positively impacted the increase in the number of inbound visitors. Na Seung-du, a researcher at SK Securities, noted, "With the May golden holiday this year, the number of foreign visitors to Jeju Island is on the verge of reaching the highest monthly number since the COVID-19 pandemic," adding, "An increase in large cruise tourists is also expected."
However, opinions are divided on whether the increase in foreign visitors will also benefit not only the casino industry but also domestic retail sectors and duty-free shops. Particularly in the case of duty-free shops, past consumption by 'daigong' (Chinese bag sellers) significantly impacted performance. However, their activities have decreased significantly recently.
In this regard, expectations are emerging that the effects will be seen as both the Democratic Party of Korea and the People Power Party, the two major political parties, included tourism revitalization in their pledges ahead of the presidential election. Kim Byeong-yeon, a researcher at NH Investment & Securities, said, "Policies focused on inbound tourism, such as the extension of the temporary exemption for the Electronic Travel Authorization (K-ETA) and global marketing, will continue," and added, "New tourism projects will also expand, including attracting 10 million foreign tourists and large-scale Korean Wave events and shopping tourism."