South Koreas foreigners-only casinos hugely impacted by a ban imposed on the sale of package tours from China to South Korea

South Koreas foreigners-only casinos have been hugely impacted by a ban imposed on the sale of package tours from China to South Korea.  The Chinese government executed a ban on the sale of package tours to South Korea last year and undertook retaliatory measures against South Korean companies post the installation of a Terminal High Altitude Area Defense (THAAD) battery in southeastern South Korea.

However, the measures adopted proved to be threatening to the foreigners-only casinos in South Korea.The casino operator Paradise registered in 2017 consolidated sales of €507 million, down 3.9 percent from the previous year, which means an operating loss of €22.8 million and also switched to a net loss of €24.5 million. This was mainly attributed to a drop in the number of Chinese visitors, which accounted for 35 percent of VIP clients last year, compared to  45 percent the previous year.

Meanwhile, Grand Korea Leisure Co. (GKL) – South Korea’s state-run casino operator – reported a revenue drop of 8.6 percent year-on-year to €389.3 million last year. The company’s operating income tumbled 28.5 percent to €138 million, with its net profit plunging 29.6 percent to €61 million.

An industry expert said in an association that: “Foreigners-only casinos fared far worse last year due to a decrease in the number of Chinese tourists. They are expected to have tough times this year unless China completely lifts its ban.” Despite the downturn, Chinese group tours have been allowed again after Seoul and Beijing set aside the dispute in November last year.