South Korea’s foreigner-only casino sector is seeing a surge in activity ahead of the Chinese New Year holiday, supported by rising arrivals from mainland China and regional travel disruptions that have redirected outbound tourism toward Korea, according to analysts and market data.
Growing diplomatic tensions between China and Japan have played a key role in reshaping travel patterns. All scheduled flights on 49 air routes between the two countries were canceled for February following political frictions. In January, the cancellation rate for flights from mainland China to Japan reached 47.2 percent, up 7.8 percentage points from the previous month.
The disruption follows a mid-November travel advisory from China discouraging visits to Japan and a late-January warning urging citizens to avoid traveling there during the Chinese New Year, citing security concerns and earthquake risks.
Analysts say the restrictions have redirected a significant portion of Chinese outbound travelers to South Korea, boosting demand at foreigner-only casinos operated by Lotte Tour Development, Paradise Co., and Grand Korea Leisure (GKL).
According to Asia Business Daily, Park Sooyoung, an analyst at Hanwha Investment & Securities, said January performance confirmed the positive impact of rising inbound traffic. “January results confirmed the positive impact of increasing inbound traffic, and in February we expect an additional boost from the Chinese New Year effect,” Park said, adding that increasing exposure to casino stocks, particularly Paradise, “appears valid.”
Paradise recorded net casino sales of KRW94.3 billion ($64.4 million) in January, up 31.4 percent year-on-year and reaching its highest monthly level on record. Lotte Tour Development posted a 55 percent year-on-year increase in net casino sales to KRW45.6 billion ($31.1 million). GKL reported a 6.6 percent year-on-year rise in January net casino sales to KRW36.6 billion ($25.3 million). At its Gangnam property, mass-market drop exceeded KRW9 billion ($6.1 million), the highest level in two years.
Market data cited by Pulse, a publication under Mail Business News Korea, showed that over the past month, shares of major casino operators have risen by 15-25 percent, reflecting growing investor optimism over the sector’s earnings outlook.
The influx has also been supported by South Korea’s temporary visa-free entry program for Chinese group travelers, in place through June. According to the Chinese Embassy in Korea, visa applications from China between November and January totaled 330,613 cases, up 34 percent year on year.
Park estimated that more than 200,000 Chinese tourists could visit South Korea during the Chinese New Year period from February 15th to 23rd. The analysts said casino properties in the Seoul metropolitan area had already seen strong momentum in January, suggesting further upside in the coming weeks.
