[E-Daily Reporter Park Sun-Yeop ] An analysis suggests that the growth environment for the leisure sector—including hotels and casinos—is improving, as the number of foreign tourists visiting South Korea has reached an all-time high and per-capita spending has also increased. While concerns over a slowdown in the Macau casino market are dragging down domestic casino stocks, analysts say such concerns are excessive, as the domestic market has only just begun to see growth in the mass market driven by the increase in foreign tourists.
Lee Hwa-jeong, an analyst at NH INVESTMENT & SECURITIES, maintained a “positive” investment outlook for the leisure industry in a report released on the 14th, stating, “With both the number of foreign tourists and per-capita tourism spending increasing simultaneously, a favorable environment is being created for the leisure industry as a whole.”

The cumulative number of foreign tourists from January to May this year reached 8.72 million, a record high. This represents a 21% increase compared to the same period last year. The growth in Chinese tourists was particularly notable, driven by the visa waiver for Chinese group tourists and spillover benefits from the decline in Chinese demand for travel to Japan. Long-haul tourists from North America and Western Europe also increased rapidly, spurred by events such as K-pop concerts.
NH INVESTMENT & SECURITIES projected that, if current trends continue, the number of foreign tourists this year will easily reach the government’s target of 23 million. The firm believes the growth in tourist numbers is likely to continue in the second half of the year, as the number of international flights at major airports has expanded to an all-time high and flight frequencies on routes to China and Japan are also being increased.
The firm also noted that the growth in tourist spending is even steeper than the increase in visitor numbers. From January to May of this year, foreign tourist spending rose 47% year-over-year, more than doubling the growth rate of visitor numbers. Analysts attribute this to favorable exchange rates and longer stays by long-haul tourists, which are driving higher per-capita spending.
Driven by these factors, the tourism balance of payments recorded a surplus for three consecutive months from March through May. The researcher stated, “Unlike the recession-driven surpluses of the past, which resulted from a decline in outbound travelers, this is a high-quality surplus driven by both an increase in inbound visitors and higher per-person spending,” adding, “As the influx of tourists centered on K-culture continues, the improving trend in the tourism balance of payments is also expected to persist.”
The hotel sector was assessed to have entered a phase where both average room rates and demand for stays are rising. In May, hotel spending by foreign visitors increased by 35% compared to the same month last year, significantly outpacing the 19% growth rate in foreign tourist arrivals for that month. This result stems from the rise in average room rates driven by increased tourist numbers, combined with a growing proportion of long-haul visitors, which simultaneously boosted both length of stay and demand for rooms.
Regarding the casino sector, the analyst emphasized that the slump in the Macau market should not be directly applied to the domestic market. The explanation provided is that while Macau has already experienced rapid growth in both mass-market and high-roller customers, leading to significant base effects, domestic casinos are seeing mass-market growth—driven by the increase in foreign tourists—gain full momentum starting this year. Furthermore, since domestic casinos operate under their own brands, they are not exposed to the risk of rising brand licensing fees that Macau operators are facing.
Although monthly performance may fluctuate due to increased volatility in hold rates caused by the recent influx of high-roller customers, analysts view this as a temporary phenomenon typical of the early stages of growth. The analyst stated, “Rather than reacting to short-term performance fluctuations, we need to focus on the structural changes driven by the increase in foreign tourists and the expansion of the mass-market customer base.”
NH INVESTMENT & SECURITIES maintained #GS P&L as its top pick in the leisure sector. The firm projected that GS P&L’s consolidated revenue for the second quarter of this year would reach 160.5 billion won, a 43% increase year-over-year, while operating profit would rise 120% to 25.5 billion won. With both average room rates and occupancy rates rising simultaneously, the firm expects profit growth to significantly outpace revenue growth. However, reflecting trading liquidity and the decline in valuations of comparable companies in the sector, the firm lowered its target prices for major hotel and casino stocks, including GS P&L.