SEOUL, Nov. 27 (Korea Bizwire) - South Korea’s tour agents are forecast to post better earnings this year as a sharp rise in outbound travelers offset a fall in the number of foreign visitors in the wake of the Middle East Respiratory Syndrome (MERS) outbreak in the country, according to market watchers Friday.
The MERS outbreak in late May led to mass cancellations of flights and tour programs scheduled in the summer, cutting tour agencies’ earnings in the third quarter.
Hana Tour, the nation’s leading tour agency, saw its operating profit tumble 47.9 percent on-year to 7.06 billion won (US$6.13 million) in the third quarter, while No. 2 Mode Tour’s earnings plunged 52.3 percent to 3.34 billion won during the period, their financial statements showed.
When combined with earnings in the first nine months, the firms posted higher earnings from a year ago. This was thanks to a sharp rise in outbound travelers, the main source of income for local agents.
The operating profits of Hana Tour and Mode Tour came to 35.6 billion won and 14.7 billion won, respectively, in the January-September period, rising about 22 percent from a year ago, reports showed.
This year, Koreans flooded to Japan thanks to the cheaper Japanese yen and inexpensive airfare provided by low-cost carriers, according to market watchers.
Analysts expect robust earnings in the fourth quarter as the terrorist attacks in Paris on Nov. 14 did not have much negative impact on travelers departing for Europe.
“Although the negative effect from the MERS outbreak was reflected in the third quarter, tour agents’ profits are expected to rise this year because it ended as a one-off event and tourism demand quickly recovered,” said Chung Yoo-seok, an analyst at Kyobo Securities.