South Korea’s top travel agency Hanatour Service Inc. may dissolve most of its local operations after streamlining nearly all of its overseas businesses as it grapples with lengthy hiatus in international travel under pandemic.

According to industry sources on Wednesday, Hanatour Service may do away with most of businesses related to mainstay travel operation among its total 15 subsidiaries based in Korea.

“Hanatour Service is examining comprehensive study on all 15 business units,” said an unnamed official at Hanatour. The measure could involve liquidation or asset sale.

The company has 44 affiliates under its arm. It already announced streamlining on 29 in overseas. Of them, 17 will be liquidated and the remaining 12 including those in Vietnam, Thailand, Beijing and London to be slimmed to liaison offices.

The move will make the first corporate shakeup of mainstay business by a major travel agency.

The company claimed the diet aims to facilitate its transition to an app-based travel platform, which does not require physical offices.

Hanatour Service has recently started the trial service of Hana Hub, its new mobile platform developed at a 40 billion-won ($32.3 million) investment.

The country’s No. 1 travel agency’s move will likely trigger restructuring wave in the overcrowed travel industry.

Once the streamlining is done, the company will likely be left with Mark Hotel for hotel business and SM Duty Free for duty-free business. They do likely be separated in the longer run, industry observers noted.

Mark Hotel incurred a net loss of 3.3 billion won ($2.7 million) in the first three months, and SM Duty Free 6.5 billion won.

The business reorganization was expected after private equity fund IMM PE recently became its largest stakeholder with 16.7 percent. IMM PE recommended Song Mi-sun, managing director of Boston Consulting Group who spearheaded its due diligence on the travel agency, to be seated as co-CEO of Hanatour Service.

Hanatour Service reported the largest-ever operating loss of 27.5 billion won in the first quarter ended March this year, more than tripled from the red numbers in October-December before the virus outbreak and reversing from a profit of 13.2 billion won a year earlier. Net loss widened to 34.9 billion won.

Hanatour Service shares on Thursday fell 3.3 percent to close at 41,050 won in Seoul.

By Shin Ik-su and Lee Ha-yeon

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]