China’s decision to allow group tours to 12 additional locations across Asia has had a positive impact on the shares of Asian tour agencies, hotels, and airlines. Lotte Tour Development, a travel agency, saw its shares rise by more than 25%, while luxury hotel operator Hotel Shilla experienced a surge of 14%. This development will mark the first time in six years that China will permit group tours to South Korea, as their previous ban was in response to the deployment of the Terminal High Altitude Area Defense system in South Korea.
China’s culture and tourism ministry made the announcement, stating that group tours will resume in over 70 locations across Asia-Pacific, Europe, Africa, and North America. Popular travel destinations in the Asia-Pacific region, such as Japan, South Korea, and Australia, were included in the list. Other countries like the United Kingdom, Germany, Finland, Sweden, and several Middle Eastern nations, including Qatar, Oman, Lebanon, and Israel, were also on the list of approved locations.
The strongest reaction to this news was observed in South Korean airline and travel stocks, with tour agencies, airlines, and hotels all experiencing significant surges. Lotte Tour Development saw a spike of over 25% in its shares, while luxury hotel operator Hotel Shilla experienced a surge of 17%. Asiana Airlines, a South Korean airline, saw a rise of 7% in its shares, and Korea Airlines advanced by 3.1%.
Interestingly, these gains were made despite the impact of Typhoon Khanun, which made landfall in South Korea on the same day. Over 330 flights were canceled due to the typhoon, and 10,000 people were evacuated for safety reasons.
Not only did South Korean travel stocks benefit from this announcement, but Japanese tourism stocks also saw gains. Japan Airlines and All Nippon Airways climbed by 1.92% and 1.25%, respectively. Shares of Japanese travel agency H.I.S rose by 3.4%, and its counterpart Airtrip experienced a 2.9% increase.
In Australia, travel stocks remained largely unaffected, with national carrier Qantas only experiencing a slight increase.
Overall, China’s decision to lift the ban on group tours to multiple locations has had a positive impact on the Asian travel industry, with tour agencies, airlines, and hotels all benefiting from the news.