[Edaily Reporter Park Soon-yeop] Analysts suggest that investors should reconsider the appeal of inbound-related stocks—such as casinos, travel, and consumer goods—as the number of foreign tourists visiting Korea rapidly increases. This is because key indicators, including the number of arrivals, foreign consumer spending, and the performance of foreigner-only casinos, are providing numerical confirmation of the inbound boom that is already being felt in daily life. Given that stock prices have been slow to reflect this trend due to supply-demand imbalances, analysts predict a higher likelihood of a revaluation of these stocks in the second half of the year.
Ji In-hae, an analyst at Shinhan Investment Securities, stated in a report on the 5th, “Indicators such as the number of arrivals, foreign spending, and the performance of relevant operators are proving the inbound boom that is felt in everyday life,” adding, “Stock prices, which had lagged due to supply-demand imbalances, now present an opportunity.” Shinhan Investment Securities maintained its “Overweight” investment rating for the leisure sector.

According to the report, the number of international visitors to South Korea in April reached 2.028 million, a 19% increase compared to the same month last year. This marks the second consecutive month that monthly arrivals have exceeded 2 million, setting a record high for the month of April. Among these, Chinese visitors totaled 570,000. This figure represents 84% of the level seen in April 2016 and 116% of the level seen in April 2019, confirming a recovery that has surpassed pre-COVID-19 levels.
Factors contributing to the increase in Chinese tourists include the weak won, the spread of K-culture, government policies, a spillover effect from slowing demand for travel to Japan, and airlines’ reallocation of short-haul routes. Notably, while the number of Chinese visitors to Japan from December of last year to April of this year decreased by 54% compared to the same period last year, the number of Chinese visitors to South Korea increased by 28%. Analysts suggest this indicates a strengthening trend of Chinese tourists choosing South Korea over Japan.
The cumulative number of foreign visitors to South Korea from January to April this year reached 6.77 million, accounting for 29.4% of the government’s annual target of 23 million. It is assessed that there is a high likelihood of achieving the target once the peak travel season begins in earnest. Domestic spending by foreigners is also growing rapidly. Cumulative domestic spending by foreigners from January to March this year reached 8.8 trillion won, a 40% increase compared to the same period last year. During the same period, the average spending per foreign visitor rose by 14% to 1.85 million won.
The boom in inbound tourism is also reflected in the performance of foreigner-only casinos. In May, the three foreigner-only casino operators maintained a positive trend without any issues regarding hold rates. #Paradise’s May drop volume was 765.2 billion won, a 19% increase year-on-year, while revenue rose 21% to 98.9 billion won. The hold rate rose 0.3 percentage points to 12.9%. #Lotte Tour Development recorded drop volume of 256.8 billion won and revenue of 49.4 billion won, each up 19%. The hold rate was 19.2%. #GKL saw drop volume of 379.5 billion won and revenue of 43.1 billion won, up 16% and 41%, respectively.
Notably, Lotte Tour Development’s May visitor count reached 63,000, a 23% increase year-over-year, marking the highest figure since its founding. Paradise also set new records for both drop volume and revenue. This is interpreted as the combined result of room service provided following the acquisition of the Hyatt Hotel, the effect of increased length of stay, and the benefit of a natural increase in inbound visitors.
The fact that the recovery of Chinese VIPs is not yet complete remains a variable. Analyst Ji expressed concern that Paradise, with its high proportion of Japanese customers, could be affected by fluctuations in Korea-Japan relations, but assessed that mass customers and other VIPs are compensating for this. From January to May of this year, Chinese VIP drop at Paradise decreased by 9% year-over-year, while GKL’s increased by 41%. However, during the same period, Paradise’s mass market and other VIP drop increased by 21% and 28%, respectively, offsetting the volatility in the Chinese and Japanese customer bases.
Key issues for the inbound tourism sector in the second half of the year include the expansion of China’s visa-free group tour policy, identifying beneficiaries in Busan, and the direction of shareholder returns. There are expectations that the visa-free group tour policy, currently scheduled for December, will at least be extended or gradually expanded to include individual travel in the future. The growing number of foreign visitors to the Busan region could also serve as an investment catalyst for related companies.
Shinhan Investment Securities maintained its recommendation to increase exposure to the foreigner-only casino sector, naming Lotte Tour Development as its top pick and Paradise as its second choice. Lotte Tour Development is evaluated as the operator most directly exposed to the recovery of Chinese tourists, aligning with the inbound tourism theme. The firm noted that as the company enters a phase of recouping its massive investments, the potential for future shareholder returns could quickly come to the fore.
Paradise was identified as an operator poised to benefit simultaneously from the expansion of visa-free travel for Chinese tourists and the revitalization of tourism in Busan, as it operates two casino venues in the Seoul metropolitan area and a five-star hotel and casino in Busan. Researcher Ji stated, “We maintain our view on increasing exposure to foreigner-only casinos,” adding, “Both the expansion of visa-free travel for Chinese tourists—a short-term momentum driver for the sector in the second half—and the search for beneficiaries of Busan’s revitalization point to Paradise.”