Major South Korean travel agencies are expected to recover from the prolonged fallout of the Covid-19 pandemic and swing to a profit in 2022 on growing demand for overseas travel, a market tracker said on Monday.
Local brokerage houses have projected that industry leader HanaTour could register a consolidated operating income of 3.9 billion won ($33 million) in the coming year, a sharp turnaround from an operating loss of 114.9 billion won last year, according to financial information provider FnGuide.
In the first half of this year alone, HanaTour posted an operating loss of 65.6 billion won. The company chalked up an operating income of 5.9 billion won in 2019 before the Covid-19 outbreak, reports Yonhap News Agency.
Runner-up Mode Tour is also projected to record an operating income of 200 million won next year, compared with an operating loss of 10.5 billion won in the first half of this year.
Yellow Balloon Tour Co. is predicted to rack up an operating income of 9.7 billion won next year, compared with its first-half loss of 6.4 billion won.
The positive outlook for local tour agencies comes amid growing demand for overseas trips on the back of fast-rising coronavirus vaccination rates and Seoul’s “travel bubble” pacts with other countries.
Major tourist destinations across the globe are reporting high vaccination rates, and South Korea has been pushing to sign travel bubble accords with several countries.
Also responsible is Seoul’s move to prepare for a “living with Covid-19” scheme next month, in which the virus will be treated as an infectious respiratory disease, like seasonal influenza.
However, FnGuide said it will likely take more time for sales and earnings of those travel companies to return to pre-pandemic levels.
Local tour operators have been hit hard by the global spread of Covid-19, which has resulted in a tumble in travel demand following lockdowns major countries.
An industry source said local travel companies were the last to bounce back from the aftermath of the severe acute respiratory syndrome (SARS) outbreak in 2002 and the Middle East Respiratory Syndrome (MERS) outbreak.