Hana Tour Reports Q1 Operating Profit of 21.6 Billion KRW... Record High
Modetour Also Expected to Increase by Over 50% Year-on-Year
Continued Rise in Number of Outbound Travelers
Major domestic outbound travel agencies (overseas travel by Koreans) have recorded strong performance in the first quarter of this year due to the steady increase in demand for overseas travel packages. With key indicators, including the number of travelers sent abroad, surpassing pre-COVID-19 levels, the travel market is analyzed to have entered a normal trajectory.
According to the Financial Supervisory Service's electronic disclosure system and the securities industry on the 8th, Hana Tour, the number one travel company in the industry, reported a consolidated operating profit of 21.6 billion KRW in the first quarter of this year, a 285% increase compared to the same period last year. The operating profit recorded from January to March is the highest ever on a quarterly basis. Sales increased by 121% to 183.3 billion KRW, and net profit also rose by 157% to 24.2 billion KRW.
The Incheon International Airport Terminal 1 is bustling with travelers. Photo by Jinhyung Kang aymsdream@
The rebound in performance was driven by an increase in customers using overseas travel packages, Hana Tour’s core business. The number of package travelers sent abroad by Hana Tour in the first quarter was about 500,000, more than double the 280,000 in the same period last year, and about 30% higher than the previous quarter’s 450,000. By region, Southeast Asia accounted for more than half at 53%, Japan 27%, and China 7%. Additionally, the high proportion (28%) of sales from the mid-to-high-end package 'Hana Pack 2.0,' designed to focus on travel by excluding shopping and optional activities, also contributed to profitability.
A Hana Tour representative said, "Overseas travel is steadily increasing, centered on Japan and Southeast Asia, with a notable recovery in the China region. To continue the upward trend in the second quarter, we are expanding air supply through charter flights, hard blocks, and departures from regional areas, offering a wider variety of products."
Modetour also showed an upward trend in the first quarter consensus (market average forecast) from the securities industry. Operating profit is expected to increase by 50.79% year-on-year to 9.5 billion KRW, and sales are forecasted to rise by 89.36% to 80.1 billion KRW. However, considering that Hana Tour exceeded market expectations (sales of 151.3 billion KRW and operating profit of 17.3 billion KRW), Modetour is also likely to surpass its forecast.
Modetour’s package product recruitment performance is also on the rise this year. The number of overseas travelers sent abroad in the first quarter was about 531,000, an 80% increase compared to the same period last year, and in the past month, about 169,000 travelers were recruited, about 90% more than the same period last year. Woo Jun-yeol, Vice President of Modetour, said, "The number of overseas travelers sent abroad in April is at 76% of the level in the same period of 2019 before COVID-19 occurred, but it is encouraging that travel demand across all regions, including China, has increased evenly. We will expand our product lineup and introduce promotions with abundant benefits in line with the increase in air supply seats in the second half of the year."
In addition, Norangpungseon also saw a roughly 60% increase in overseas travel package reservations in the first quarter compared to the same period last year, and the reservation rate for the second quarter is also rising by about 70% compared to the same period last year. Kyowon Tour Travel Ease also expects improved performance as the number of package travelers sent abroad in the first quarter increased by 45% compared to the same period last year.
A travel industry official said, "The popularity of short-distance travel destinations such as Southeast Asia and Japan remains steady, and demand for China, favored by the core middle-aged and senior package customers, is also recovering, so overall performance this year is expected to be much better than last year."
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