Shin Hwa World, the operator of Jeju integrated resort Jeju Shinhwa World formerly known as Landing International Holdings, has reported a loss attributable to owners of HK$338.9 million (US$43.2 million) in 1H23, widened from a loss of HK$105.4 million (US$13.4 million) a year earlier despite the reopening of South Korea’s international borders.
Pointing to a 39.5% decrease in revenue to HK$418.1 million (US$53.2 million), Shin Hwa World noted that the largest decline was in non-gaming where revenues fell 40.2% year-on-year to HK$394.3 million (US$50.2 million). By comparison, gaming revenue at Landing Casino fell by 27.0% to HK$23.8 million (US$3.0 million) – although the company explained that both rolling and non-rolling volumes were up year-on-year, with a decline in win percentage negatively impacting segment revenue.
Explaining the reasons for the company’s broader decline, Shin Hwa World said, “During the Period, most countries eased their border travel restrictions, however, China’s group tours were still subject to approval by the Chinese authorities to enter Korea.
“Intense competition and domestic customers travelling abroad have put pressure on room price and occupancy rate. Nevertheless, our marketing team continued to offer attractive special staycation packages and promotional events bundled with our accommodations, water and theme parks, as well as food and beverage options.
“We also launched a wide variety of attraction events, such as lighting show with fireworks, seasonal flea market, art gallery, and new facilities, such as a premium cinema and a media-based story park, to enrich our customers’ experiences.”
Competition aside, Shin Hwa World also attributed its widened loss to a decrease in residential property sales owing to the downturn in the property market and the increasing interest rate; an increase in operating expenses resulting from inflation, utility costs and spending on facility maintenances; a decrease in fair value gains of investment properties; and an absence of a net amount of approximately HK$66 million (US$8.4 million) from the reversal of trade and other receivables impairment in the corresponding period of 2022.
Commenting on its future prospects, the company said, “Although the room price and occupancy rate were under pressure during the period, the Board believes that the reopening of the borders will boost the tourism industries and have a positive effect on our business. To adapt to the new operating environment, the Group will reformulate its marketing strategy in order to seize the opportunities for the rebound of tourism.”
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