The resumption of Chinese group tours should boost South Korea’s inbound visitor traffic and eventually contribute to a “sharp recovery” in the number of mass-market foreign customers to the latter nation’s casinos. That is according to a note by brokerage NH Investment & Securities Co Ltd, cited on Wednesday in the Business Korea news outlet.
In early August, the mainland China authorities had announced – as part of a post-Covid-19 easing of travel arrangements – that they would allow group travel by the country’s citizens to more destinations, including Japan and South Korea.
Earlier this week, it was reported that South Korean authorities would “lift”, up to the end of this year, processing fees “currently set at KRW18,000 [about US$13.60] for visitors arriving in groups”.
The resumption of Chinese group tours marked the return of a “long absent” customer segment that should bode well for South Korea’s casino industry, NH Investment’s analyst Hazell Lee was cited as saying.
“The expansion of Chinese inbound traffic following the resumption of group tours to [South] Korea should eventually lead to a sharp recovery in the number of casino visitors, especially mass visitors,” Ms Lee remarked.
Group tour business from China to South Korea had been disrupted since 2017, linked initially by analysts to a dispute over Seoul’s deployment of a U.S. missile defence system. China had never publicly acknowledged limiting group tours to South Korea in that period. In 2020, China put a blanket ban on outbound tour groups, amid the Covid-19 pandemic.
While the return of Chinese group tours should bode well for South Korea’s casino industry overall, the “negative sentiment” related to VIP gaming patrons from China remains, the analyst noted.
She stated: “…Chinese VIPs generally are individual tourists. In other words, the resumption of group tours to [South] Korea cannot guarantee a rapid recovery in Chinese VIP drop amounts,” in South Korean casinos.
The Chinese authorities have continuously emphasised in the past few years a crackdown either on citizens travelling overseas for casino play, or being involved in online betting – referred to collectively as “cross-border gambling”. The country has amended its criminal code to outlaw anyone assisting others in such activity. It came to effect on March 1, 2021, amid the Covid-19 pandemic.
In her latest remarks on the gaming sector, the analyst noted that NH Investment favoured South Korea foreigner-only casino operator Paradise Co Ltd, as the brokerage believed both of the company’s gaming and non-gaming business will “benefit significantly” from the resumption of Chinese group tours. The amenities and accessibility of the company’s casino resort complex in Incheon, Paradise City, should draw both group visitors and casino patrons, Ms Lee noted.
South Korea has 17 casinos, according to Korea Casino Association data, with 16 of those open only to foreigners.
