[Click eStock] "Lotte Tour Development, Sharp Earnings Rebound Expected with Jeju Direct Flight Route Resumption"

[Asia Economy Reporter Jang Hyowon] Bukuk Securities analyzed on the 5th that Lotte Tour Development is expected to see a sharp performance rebound as direct flight routes to Jeju are gradually resumed.

Researcher Eom Taewoong of Bukuk Securities stated in a report on the same day, “Although delayed compared to Incheon Airport, the gradual resumption of direct flight routes to Jeju is expected,” and “accordingly, performance improvements are anticipated across all business divisions including the company’s casino, hotel, and travel sectors.”

Looking at each sector, the casino business is expected to benefit from the resumption of Jeju’s visa-free entry system and the sequential reopening of direct flight routes to Jeju from Singapore and Thailand in June, followed by Malaysia (September), Taiwan (October), and Japan (November). Active marketing activities utilizing the junket business are expected to quickly attract VIP customers.

The hotel business is expected to see an increase in room sales and ADR (Average Daily Rate, 283,211 KRW on average in Q2) during the summer vacation season in Q3. An increase in OCC (Occupancy Rate, 51.7% in Q2) is also anticipated due to attracting casino customers. The travel business is expected to see an increase in outbound travel starting from Q3, attributed to the rise in domestic demand for overseas travel following the abolition of PCR tests before and after domestic entry.

Researcher Eom said, “Due to the delay in resuming direct flight routes to Jeju, the company recorded operating revenue of 48.1 billion KRW and an operating loss of -28.9 billion KRW in Q2, with continued sluggish performance in the casino and hotel businesses. Q3 is also expected to show weaker results compared to other foreigner-only casinos in the metropolitan area,” but added, “However, with the sequential resumption of direct flight routes with Southeast Asian countries since June, performance growth in the second half of the year is expected.”

Furthermore, he said, “This is a factor that raises expectations for the improvement of Lotte Tour Development’s casino and hotel business performance in Q4. As Lotte Tour Development owns the largest hotel in Korea (1,600 rooms) and ancillary facilities (14 F&B outlets), it has a favorable environment for attracting casino VIP/MASS customers upon the resumption of the Jeju-Japan direct flight route. A sharp improvement in casino and hotel performance is expected next year.”

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