“Paradise, Expectations for PCR Relaxation, Route Expansion, and Visa-Free Entry”

[Asia Economy Reporter Jang Hyowon] Hana Securities forecasted on the 3rd that Paradise's recovery speed will be steep enough to approach the annual break-even point (BEP), boosted by the easing of PCR regulations, route expansion, and expectations for a visa-free policy for Japanese entrants.

Lee Kihoon, a researcher at Hana Securities, said, "Sales were quite strong in August following July, with revenge demand from Japanese VIPs and supply recovery due to route resumption being positive," adding, "In September, both countries removed pre-entry PCR regulations, and Korea expanded its existing visa-free policy for Japanese entrants from August to October."

The researcher analyzed, "From the perspective of diplomatic reciprocity, there is hope that discussions on mutual visa-free policies will resume in October to November," and added, "Although the annual deficit was revised upward to -12.4 billion KRW through this data, the recovery speed is quite steep enough to approach the annual BEP depending on performance."

Paradise's sales in August were 50.8 billion KRW, down 15% year-on-year. However, the drop amount was 331.4 billion KRW, an 80% increase, and the hold rate recorded 14.5%. In particular, the Japanese VIP drop amount was 131 billion KRW, growing 77% compared to the previous quarter, continuing the improved trend since the resumption of the Gimpo-Haneda route.

The researcher projected, "The expected sales and operating profit for the third quarter are 171 billion KRW and 19.7 billion KRW, respectively, representing increases of 40% and 309% year-on-year," and forecasted, "About 95% of the third quarter Japanese VIP drop amount is concentrated in Seoul and Incheon, but considering the expansion of the Busan-Japan route and the possible resumption of the Jeju-Japan route, the recovery could be larger and faster than expected."