Hana Tour Going Through Its Worst Period... "Recovery Will Take Some Time"

Decision to Withdraw Insadong Downtown Duty-Free Shop... Incheon Airport Duty-Free Sales Also Plummet

[Asia Economy Reporter Kum Bo-ryeong] Hana Tour is analyzed to be going through its worst period.

According to Hyundai Motor Securities on the 19th, Hana Tour's first-quarter performance this year is estimated at consolidated sales of 90.1 billion KRW and an operating loss of 20.7 billion KRW. Sales are expected to decrease by 59.6% compared to the previous year, and operating profit is expected to turn negative, falling short of consensus.

With the existing Japan routes sluggish and overseas routes suspended due to the novel coronavirus infection (COVID-19), both outbound and inbound businesses suffered significant damage. Foreign visitors, including Chinese and Japanese, also showed a sharp decline due to COVID-19. Business hotels are expected to turn to losses as occupancy rates plummeted.

The downtown duty-free shop in Insadong has decided to withdraw. The withdrawal of the downtown duty-free shop is expected to be completed within the second to third quarter of this year. Going forward, only the Incheon Airport Terminal 1, Terminal 2, and arrival duty-free shops will be operated, but sales at the Incheon Airport branch have also sharply declined.

Researcher Yoo Sung-man of Hyundai Motor Securities said, "All subsidiaries in Japan, including Hana Tour Japan, post-duty-free shops, buses, and hotels, are also recording losses. Japan is in a phase where COVID-19 is spreading in earnest, so recovery is expected to be delayed," and added, "Poor performance due to COVID-19 will continue in the second quarter of this year, and even if COVID-19 stabilizes, it is judged that it will take some time for overseas travel demand and inbound to fully recover."

Hana Tour's stock price has fallen sharply over the past year. The stock price, which was 68,100 KRW on April 18 last year, dropped 40% to 40,800 KRW on the 17th. Hyundai Motor Securities lowered Hana Tour's target stock price from the previous 45,000 KRW to 40,000 KRW.

This content was produced with the assistance of AI translation services.