South Korea’s major tour operators’ stocks are recovering on expectations that longer-than-usual holiday weeks falling in May and October this year would lead to a rise in travel demand.

The nation’s largest travel agency HanaTour Service Inc. shares have rebounded to 80,000 won ($69.76) a share Friday after tumbling more than 60 percent from a record high of 178,500 won marked July 22, 2015 to 62,800 won in January 3 this year.

The latest surge in the firm’s stock price is mainly driven by growing expectations that the company’s operating profit would improve from last year to around 50 billion won this year. Its operating profit has more than halved from 44.7 billion won in 2015 to 20.9 billion won in 2016. Market analysts also expected the firm to narrow losses in its duty-free business, another factor that can give a boost to its stocks.

The main reason behind the expected improvement in its performance this year is longer holidays expected this year than last year. Buddah’s Birthday falls on May 3, Wednesday, followed by Children’s Day two days later, which may prompt many workers to opt for a leave of absence on Thursday that week to seek a straight five-day weekend. In October, Koreans will have a seven-day-long holiday starting Oct. 3 as many national holidays - the National Foundation Day, Chuseok and Hangeul (Korean alphabet) Proclamation Day - are crammed in the period.

This year’s long holiday weeks are expected to lead to a rise in demand for travel packages offered by the Korean major tour operators in spring and fall, according to the local brokerage house estimates on Sunday.

Modetour Network Inc., the second largest travel firm in Korea, also saw its share price rebound more than 10 percent to 32,450 won per share in the closing Friday after sliding to the 28,000 won range early January. The firm’s operating income that has grown from 16.4 billion won in 2015 to 20.1 billion last year is expected to rise further to about 30 billion won, market analysts estimated.

Interpark Holdings Corp. an online retailer whose lion’s share of revenue is generated from the travel business is also expected to see a big gain in its earnings for 2017.

Shares of HanaTour closed Monday at 79,800 won, down 0.25 percent from the previous session, while Modetour ended at 33,800 won, up 4.16 percent and Interpark Holdings dropped 0.44 percent to finish at 9,030 won.

By Hong Jang-won

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]