South Korean travel agency stocks continue to stay under pressure even in the peak summer season as weak domestic consumption coupled with the declining Korean currency value has been restraining Koreans from traveling outside the country.
Shares of the country’s leading travel agency Hanatour Service finished Friday 2.71 percent lower at 50,200 won ($43.62), breaking the 52-week low threshold. The runner-up Modetour Network shares also hit a new 52-week low on the day after losing 2.23 percent at 19,700 won. Yellow Balloon Tour stocks fell 1.49 percent to end the day at 19,800 won, flirting with its new 52-week low.
On Monday, Hanatour Service shares closed 2.39 percent higher at 51,400 won, Modetour Network 3.3 percent up at 20,350 won, and Yellow Balloon Tour 1.01 percent up at 20,000 won in Seoul trading.
Travel stocks generally attract investors just before the peak summer season on expectations for a rapid growth in travel demand. But the local travel agencies’ shares in the April-June period this year lost appeal as Koreans are reluctant to travel to foreign countries due to the weak Korean won against major currencies and falling disposable income in line with the slowing economy and high unemployment.
The boat accident in Hungary that caused mass casualties with 24 Koreans dead and two missing in May also has been letting more people stay away from overseas trips, according to industry experts.
In particular, Hanatour Service shares lost the most 30.7 percent in the second quarter ended June as a stronger Japanese yen has led tourists to stay away from Japan, which is the most popular destination accounting for the largest 36 percent of the company’s outbound trip demand. The Korean won tanked to near 1,100 won against 100 yen from the 990 won level at the end of last year.
Yellow Balloon Tour shares were down 28 percent from April to June, Very Good Tour agency 16.8 percent, and Modetour Network 14.7 percent.
As of June, Hanatour Service’s package tour booking rate for July was 7 percent lower from a year ago, and the rate for August down 15 percent. Modetour Network’s booking rate for July and August also was 2 percent and 3 percent lower from a year earlier.
By Yoo Joon-ho and Lee Ha-yeon
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]