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Hotel Shilla’s profit soars, buoyed by duty-free shop sales

A Shilla Duty Free Shop in Seoul
A Shilla Duty Free Shop in Seoul
Hotel Shilla on Thursday posted a record-breaking 2.9 trillion won ($2.7 billion) in sales in 2014, with an operating profit of 138.9 billion won.

The figures were up 26.6 percent in sales in 2013 and 60.5 percent in operating profit.

The record sales figure was mainly attributed to the influx of Chinese tourists to Korea and their visits to the company’s duty-free shops, analysts say.

Shilla owns a large duty-free shop in Incheon International Airport and the first Louis Vuitton outlet in an airport. It also has a duty-free shop near its hotel in central Seoul, a store on Jejudo Island and others.

According to the Korea Tourism Organization, 14 million foreign tourists visited Korea in 2014, including 6.1 million from China. The number of Chinese tourists has grown 40 percent since 2013.

Shilla’s duty-free sector has also expanded overseas with watch, perfume and cosmetics sections in Singapore Changi Airport and a cosmetics booth in Macau International Airport. 
Hotel Shilla president Lee Boo-jin
Hotel Shilla president Lee Boo-jin

The company, led by Samsung Electronics chairman Lee Kun-hee’s eldest daughter Lee Boo-jin, has also made headway in the hotel business. It opened Shilla Stay, a business-class hotel, in Dongtan, Gyeonggi Province, in 2013, followed by another in Yeoksam-dong, southern Seoul, in 2014. Armed with quality services and low prices, four additional hotels of this kind are scheduled to open this year.

“Thanks to the favorable foreign currency exchange rate and influence of the Korean Wave, especially among Chinese tourists seeking Korean products, the business is expected to flourish,” Yang Il-woo, an analyst at Samsung Securities, was quoted as saying to a local daily.

“Whether the company will secure an additional spot in the upcoming bid for a license to operate four extra urban duty-free stores will be pivotal for the 2015 record,” he added.

By Bae Ji-sook (baejisook@heraldcorp.com)
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