South Korean stocks tied to Chinese tourism slumped after concerns that local governments in mainland China are trying to limit the flow of visitors to the country, Bloomberg reports.
According to an official at the Korea Tourism Organization in Seoul, Chinese authorities are ordering travel agents to curb cheap travel packages to South Korea from November 2016 to April 2017.
Earlier in the month, the China National Tourist Administration posted a statement on its website saying it will regulate cheap travel packages, but did not specify any particular country.
South Korea’s casinos started to show recovery in the second quarter of 2016, rebounding from a 2015 slump as tourism numbers declined in the wake of an outbreak of Middle Eastern Respiratory Syndrome and China’s crackdown on corruption.
In Q2, Paradise Group posted consolidated operating profit of KRW32.8 billion (US$29.4 million), up 147.6 percent from a year earlier.
Rival Grand Korea Leisure Co Ltd reported a 38.1 percent year-on-year increase in net income to KRW25.6 billion in 16Q2.
Kangwon Land, the operator of the country’s only resort to allow locals, reported a 27.1 percent increase in net income to KRW123.7 billion.
South Korean cosmetic companies were among the most heavily affected by the news, said Bloomberg.