The outlook for the hotel sector’s performance is bleak amid a “tough environment.” According to data released on the 1st, hotel revenue in the third quarter declined 6.3% year‑on‑year to ₩ 961 4 billion, whereas operating profit rose 372.3% to ₩ 540 billion—well below the market’s 15.6% expectation.
Researcher Kim Myung‑ju of Tujazheng said that while hotel results are expected to be good, the “non‑hotel business” is likely to show a weak trend. He noted in particular that the number of foreign visitors arriving in Korea in July and August has risen 22.1% year‑on‑year, implying average daily room rates (ADR) will increase by two digits, with operating profit expected to rise about ₩ 274 billion—about 25.8%—partially offsetting the decline.
Kim added that “non‑hotel business results are also expected to drop 26.8% year‑on‑year to ₩ 266 billion, not meeting market expectations.” He projected that third‑quarter sales may be similar to or slightly lower than those of the second quarter because of the recovery in China’s domestic product industry and other factors. He also said that “China’s retail sales are unlikely to fall as in the first half, and, compared with the second quarter, could rise modestly,” noting that rising oil prices and higher gasoline rates may raise costs relative to the second quarter.
In short, the third‑quarter results for Hotel Sinra appear likely to trend below market expectations, and a weak outlook is expected across the entire non‑hotel industry. This report by Lee Su‑Han‑gyeong (2su@hankyung.com).