Image Credits - Yonhap
Travel stocks are experiencing a notable surge as the travel industry anticipates a significant rebound during the upcoming Lunar New Year holiday. The surge is attributed to pent-up demand for overseas travel, with industry sources speculating that the average number of daily outbound tourists from Incheon International Airport during the holiday period could surpass pre-pandemic records.
The Lunar New Year holiday, scheduled from February 9 to 12, is expected to witness a surge in outbound travel, indicating a strong recovery for the travel industry. Flights to popular overseas destinations and related travel packages are reportedly being booked rapidly, not only for the Lunar New Year but also for upcoming holidays, including Independence Movement Day (March 1) and Children’s Day (May 5).
This positive trend has propelled travel stocks to higher levels, reflecting optimism and renewed confidence among investors. Hana Tour, the largest travel company in Korea, experienced a notable gain, closing at 60,100 won ($44.99) on the benchmark KOSPI. This represents a 15.35 per cent increase from December 28, signifying a return to the 60,000 won range for the first time in more than nine months.
Modetour, another leading tour business, closed at 16,670 won on the junior Kosdaq bourse, marking a 9.38 per cent increase from the previous year’s closing. Smaller competitors, such as Yellow Balloon Tour and Very Good Tour, are also witnessing upward trajectories, with gains of 17.65 per cent and 16.3 per cent, respectively.
Analysts are optimistic about the future performance of travel stocks, particularly Hana Tour. Lee Ki-hoon, an analyst at Hana Securities, noted that the company’s share price “has much room to climb faster.” He highlighted the expected increase in the number of the firm’s travel package customers, reaching 2.18 million this year, a 60 per cent rise from 2023. The operating profit is anticipated to soar 83 per cent year-on-year to reach 62.6 billion won.
Ji In-hae, an analyst at Shinhan Securities, emphasized the growing trend of both younger and older tourists purchasing travel packages. This shift in consumer behaviour indicates a bullish market territory for the travel industry in the coming year.