Travel Agency Performance in Q3 2023 Declines Despite Summer Season Demand
The performance of travel agencies in the third quarter of 2023, which includes the peak summer season for working professionals on vacation and students on break, has surprisingly shown a decline. Despite the sustained travel demand that surged following the COVID-19 pandemic, the postponement of the Chuseok holiday from the third quarter last year to the fourth quarter this year, coupled with a general decline in travel sentiment regionally, has been attributed to this downturn.
According to industry reports on October 18, Hana Tours operating profit for the third quarter fell by 31% year-on-year to 8.2 billion won. Revenue also dropped by 23% to 123.3 billion won. The company cited the primary reason for this decline as the fact that last year’s Chuseok holiday fell in September, while this year it has been pushed to October, thus affecting the performance in the third quarter.
The number of travelers who departed overseas via Hana Tour decreased by 2% compared to the previous year, totaling 930,450. Additionally, the number of customers using package tours dropped by 11% to 450,000. This decline was explained by temporary decreases in travel demand for regions affected by rumors of earthquakes in Japan and the impacts of conflicts in Thailand and Cambodia.
In contrast, individual travel (FIT) has continued to grow, with 1,098,924 travelers recorded, marking an 11% increase compared to last year’s 993,721. This segment had previously seen increases of 37% and 25% in the first and second quarters, respectively.
Mode Tour reported an operating loss of 3.5 billion won during the same period, marking a shift to a deficit. The seasonal off-peak period in the second half of the year, combined with one-time costs, has weighed heavily on their performance, with revenues plummeting to 35.8 billion won from 65 billion won the previous year.
Yellow Balloon Travel also experienced an operating loss of 2.2 billion won, slightly improving from a loss of 2.4 billion won in the same period last year. Their revenue also decreased to 25 billion won from 36.2 billion won year-on-year.
The travel industry points to the postponement of the Chuseok holiday, which lasted for the longest ten days last month, as a significant factor for the lackluster performance. As a result, there are hopes for a rebound in the fourth quarter, where the effects of the Golden Holiday can be more prominently reflected in the performance figures.
According to industry reports on October 18, Hana Tours operating profit for the third quarter fell by 31% year-on-year to 8.2 billion won. Revenue also dropped by 23% to 123.3 billion won. The company cited the primary reason for this decline as the fact that last year’s Chuseok holiday fell in September, while this year it has been pushed to October, thus affecting the performance in the third quarter.
The number of travelers who departed overseas via Hana Tour decreased by 2% compared to the previous year, totaling 930,450. Additionally, the number of customers using package tours dropped by 11% to 450,000. This decline was explained by temporary decreases in travel demand for regions affected by rumors of earthquakes in Japan and the impacts of conflicts in Thailand and Cambodia.
In contrast, individual travel (FIT) has continued to grow, with 1,098,924 travelers recorded, marking an 11% increase compared to last year’s 993,721. This segment had previously seen increases of 37% and 25% in the first and second quarters, respectively.
Mode Tour reported an operating loss of 3.5 billion won during the same period, marking a shift to a deficit. The seasonal off-peak period in the second half of the year, combined with one-time costs, has weighed heavily on their performance, with revenues plummeting to 35.8 billion won from 65 billion won the previous year.
Yellow Balloon Travel also experienced an operating loss of 2.2 billion won, slightly improving from a loss of 2.4 billion won in the same period last year. Their revenue also decreased to 25 billion won from 36.2 billion won year-on-year.
The travel industry points to the postponement of the Chuseok holiday, which lasted for the longest ten days last month, as a significant factor for the lackluster performance. As a result, there are hopes for a rebound in the fourth quarter, where the effects of the Golden Holiday can be more prominently reflected in the performance figures.
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