"Travel Industry, Ongoing Delays in Normalization... Poor Performance in Q2"

[Asia Economy Reporter Hyungsoo Park] Hana Tour and Modetour appear to have posted results below market expectations in the second quarter of this year. It is analyzed that this was due to insufficient airline seat supply despite the easing of quarantine regulations since last April.

According to Samsung Securities on the 17th, Hana Tour is estimated to have achieved sales of 17.7 billion KRW and an operating loss of 33.6 billion KRW in the second quarter of this year. Sales increased by 99.3% compared to the same period last year, but the operating loss widened. This is below the market expectation of an operating loss of 28.4 billion KRW.

Researcher Jiho Choi of Samsung Securities explained, "Airline supply seems to have gradually recovered only in June, affecting outbound demand."

He added, "The resumption of group tours to Japan in June, which had raised expectations, did not have a significant impact due to visa issuance costs and difficulties," and "both the separate corporation and overseas subsidiaries likely achieved sales below expectations."

Researcher Choi emphasized, "Profitability worsened due to large-scale advertising expenses in the second quarter," and "Hana Tour has been aggressively spending on marketing to enhance brand image since the fourth quarter of last year."

Modetour is estimated to have recorded sales of 8.6 billion KRW and an operating loss of 10.3 billion KRW in the second quarter. Sales increased by 182% compared to the same period last year, but the deficit widened. The market expectation was an operating loss of 6.6 billion KRW.

Researcher Choi analyzed, "Profitability seems to have deteriorated due to the rapid normalization of labor costs," and "while 20-30% of all employees were working at the end of March this year, 60% had returned to normal work by the end of the second quarter."

Samsung Securities lowered its forecast for the number of outbound travelers this year by about 22%, from the previous estimate of 10.3 million to 7.99 million. This is a 70.3% decrease compared to 2019, before COVID-19. Researcher Choi explained, "Quarantine regulations in key travel areas were maintained in the second quarter as well as the first quarter," and "the recovery of travel sentiment is progressing more slowly than initially expected."

It is expected that the number of outbound travelers will exceed 1 million per month around the fourth quarter of this year. Concerns were raised that uncertainty may increase as domestic COVID-19 cases have been rising since the beginning of this month.

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