Chinese VIP gamblers boost Q3 earnings for South Korean casino operators

South Korea’s casino operators reported solid third-quarter earnings, supported by a sharp increase in Chinese tourists and a recovery in the global gaming industry, according to tourism and brokerage industry data.

According to the Ministry of Justice’s Immigration and Foreign Policy Headquarters Statistical Monthly Report on the 8th, 6,491,846 foreigners entered the country on tourist (B-2) visas from January to September this year, a 17.6% increase from the same period last year (5,519,648). Foreign tourist numbers peaked at 7.15 million in 2019 before declining sharply due to the COVID-19 pandemic. After recovering to pre-pandemic levels with 5.12 million in 2023, last year saw a record high of 7,546,000 visitors.

If the current trend continues, this year’s record is likely to be broken, as the first nine months already account for 86% of last year’s total.

As foreign tourist numbers hit a record high, South Korea’s distribution and tourism sectors are also reaping benefits.

The hotel and casino industries are also reporting strong performance, driven by visa-free group tours for Chinese visitors and a general rise in foreign tourists.

Lotte Tourism Development achieved record-high sales of 186.6 billion won and operating profit of 52.9 billion won in the third quarter, up 34.2% and 138.9% year-on-year, respectively. Its operating margin surged from 8.3% last year to 28.4% in the third quarter this year.

Notably, the casino division’s sales for the first three quarters reached 333.9 billion won, already exceeding last year’s annual total of 294.3 billion won. The hotel division (Grand Hyatt Jeju) also recorded its highest-ever sales of 46.1 billion won, with an average room occupancy rate of 90.2% in the third quarter—nearly full capacity.

Paradise Company and Grand Korea Leisure (GKL), both operating casinos, are estimated to have seen their third-quarter operating profits rise 42.5% and 186% year-on-year to 51.6 billion won and 16.6 billion won, respectively.

A distribution industry official remarked, “Since this year’s Chuseok holiday falls in October, part of the holiday season’s performance will be reflected in the fourth quarter. Combined with the year-end season, we expect further improvement in fourth-quarter results.”