Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Korean travel stocks rally as China imposes Japan travel ban
Tourists pack Gyeongbok Palace in Seoul, Wednesday. Korea Times photo by Shim Hyun-chul
By Lee Yeon-woo
Korean travel stocks extended gains for a third straight session on Wednesday, as China's travel advisory against Japan fueled expectations of increased tourism to Korea, analysts said.
Yellow Balloon Tour closed at 6,340 won ($4.33), rising 5.32 percent from the previous session. Other domestic travel agencies also gained, with Very Good Tour up 10.11 percent, Mode Tour climbing 1.53 percent and Hana Tour advancing 2.58 percent.
Other beneficiaries included low-cost carriers. Air Busan surged as much as 22 percent in early trading before paring gains on profit-taking, finishing 4.36 percent higher at 1,770 won. Jeju Air and Jin Air also rose 4.33 percent and 2.74 percent, respectively.
Hotel and casino shares rallied as well. Hotel Shilla gained 0.54 percent, Seobu T&D added 3.99 percent and Paradise climbed 0.56 percent.
The rally in travel stocks came even as the broader market declined. The benchmark KOSPI fell 0.61 percent, closing at 3,929.51, with sentiment turning risk-off ahead of Nvidia's earnings report and the release of the U.S. Federal Reserve's minutes early Thursday.
Analysts attributed the travel sector's strength to rising tensions between China and Japan, which are expected to redirect Chinese tourist demand to Korea.
Japanese Prime Minister Sanae Takaichi sparked controversy on Nov. 7 by suggesting Tokyo could intervene in a Taiwan conflict, a remark that drew swift backlash from China. China's Ministry of Foreign Affairs issued an advisory on Friday urging citizens to avoid traveling to Japan in the short term.
As a result, data from Chinese travel platform Qunar shows Korea overtook Japan as the top overseas destination among Chinese travelers on Saturday and Sunday. Korea also led in international airfare payments and travel-related search volumes.
During the same period, Korea-bound international airfare payments were the highest, and Korea also topped travel-related search volumes.
"Chinese visitors spent 1.7 trillion yen ($10.9 billion) in Japan last year, accounting for more than 21 percent of total foreign tourist spending," said Moon Nam-joong, a strategist at Daishin Securities. "If tensions between China and Japan ease quickly, the impact may be limited. But if the situation drags on, negative sentiment toward Japan's economy and equity market is likely to deepen."