Kiwoom Securities said on Wednesday that the hotel sector’s performance in the second quarter will continue due to the peak summer season in the third quarter and VIP expansion in the fourth quarter.
Lee Nam-soo, a researcher at Kiwoom Securities, said, “In the second quarter, amid steady demand for casinos for local VIPs, operating losses were also reduced due to demand for domestic hocance,” adding, “In addition, a one-time profit of 68.9 billion won occurred due to the sale of assets.”
image
Researcher Lee Nam-soo said, “By sector, it recorded KRW 105.2 billion, including KRW 28.8 billion for casinos, KRW 28.4 billion for hotels, and KRW 45.2 billion for complex resorts,” adding, “Although operating-related fluctuation costs increased due to improved sales, it is not something to damage performance.”
Researcher Lee said, “The hotel sector, which recorded the highest performance in the second quarter, is expected to continue in the third quarter,” adding, “It is a para that achieved 83.8% of the occupancy rate (OCC) and 299,000 won of the room sales price (ADR) in the second quarter.””We look forward to the effect of the peak season in the third quarter of the year,” he pointed out.
“Paradise City’s hotel division recorded 61.7% of OCC and 372,000 won in ADR in the second quarter,” he said. “Youngjongdo Hotel is also expected to continue to improve its performance until the end of the year due to the effect of the peak season in the third quarter and the increase in VIP accommodation.”
“In July, consolidated casino sales increased 293.8% year-on-year to 27.4 billion won,” he said. “The performance improvement of Walkerhill (13.5 billion won) and P City (11.6 billion won) with excellent access to VIPs in Japan was remarkable.”
“We believe that the demand for deferral and retaliation has been created at the same time as 4,769 VIP visitors and the drop amount of 235.5 billion won,” he said. “When reflecting the gradual improvement in VIP entry in Japan from June, this trend of deferral and retaliation will continue until a considerable amount of VIP recovery level.”
“In addition, demand for VIPs outside China and Japan will continue to improve due to the normalization of Incheon Airport and the expansion of international routes,” he said. “As a result, the hold rate, a lucky factor due to the expansion of parameters, will remain stable, indicating a clear improvement in sales.”
“As demand for VIPs in Japan recovers faster, we will raise the turnaround outlook more positively from the second half of the year,” he said. “From July 25, the flow of VIPs in Japan will improve more actively from the third quarter by expanding Gimpo-Handa routes, issuing multiple visas, and entering Korea temporarily.”
