Return of Foreign Tourists... Focus on Casino, Cosmetics, and Duty-Free Stocks

1.71 Million Foreign Visitors to Korea in Q1... Over 8 Times Increase YoY
Japan and China Labor Day Holidays... Tourism Market Expected to Improve Compared to 2019

As the number of foreign tourists visiting South Korea continues to increase, casino, cosmetics, and duty-free related stocks are gaining attention in the stock market.

According to the Ministry of Culture, Sports and Tourism, approximately 1.71 million foreign tourists visited South Korea in the first quarter of this year. In March alone, the total number reached 800,000, a 67% increase compared to the previous month. Compared to the previous year, it increased more than eightfold. This figure represents about 55% recovery compared to the average monthly arrivals in 2019 before the COVID-19 pandemic.

Among them, the number of Chinese arrivals was 73,000, a 60% increase from the previous month and a fivefold increase compared to the previous year. Compared to the average monthly arrivals in 2019, it has recovered about 15%. The government lifted the PCR test requirement for Chinese visitors to Korea starting mid-March. Since then, the number of tourists has been gradually increasing.

The number of Japanese arrivals also surged significantly. The total number of Japanese visitors was 190,000, more than double compared to the previous month. This represents a 71% recovery compared to the average monthly Japanese arrivals in 2019.

Although Japanese and Chinese tourists still make up a large proportion of foreign visitors, the growth rate is higher among tourists from other countries. Last month, 110,000 Americans and 310,000 other Asians excluding Japan and China visited Korea. These figures represent increases of 73% and 48% respectively compared to the previous month.

An airline official stated, “Currently, many countries driving inbound tourism are emerging markets excluding Japan and China,” and analyzed, “The increased recognition of Hallyu, such as K-pop, over the past three years has coincided with the normalization of airfares.”

In May, not only South Korea but also Japan and China have upcoming holidays, so the number of travelers is expected to increase further. China’s Labor Day holiday runs from April 29 to May 3, and Japan’s Golden Week lasts from April 29 to May 7. Accordingly, the stock market is focusing on leisure and consumer goods stocks related to inbound travel.

Ji In-hae, a researcher at Shinhan Investment Corp., analyzed, “Although inbound leisure and consumer goods stocks have paused recently due to concerns over worsening political exchanges between Korea and China, as proven by immigration market indicators and monthly casino data, China is not everything.” Researcher Ji added, “With overseas travel becoming free again after three years, foreigners are more likely than ever to choose Korea as a travel destination,” and predicted, “The tourism market will improve significantly compared to 2019 due to an improved regional mix of foreign tourists and increased spending from concentrated deferred demand.” Furthermore, Ji emphasized, “Investors should approach casino, cosmetics, and duty-free related stocks with optimism rather than political concerns.”

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