Shilla’s downtown business grew in double digits in Q1.

One of Asia’s largest duty-free operators, South Korea’s Shilla Duty Free, has become profitable again in the first quarter of 2026 as its recovery programme pays off. The performance was helped by rising revenue and a focused approach to operational activities and disciplined cost reductions.

Based on unaudited results released by Shilla Duty Free’s parent company, Hotel Shilla, this week, the travel retail business saw strong year-on-year (YOY) revenue growth of +7% in the first quarter of 2026, reaching KRW884.6bn/$600.2m*. The operating profit during the period was KRW12.2bn/$8.3m, up from a loss of KRW5bn/$3.4m in Q1 2025.

The turnaround was helped by a double-digit revenue rise in downtown operations of +11.7% YOY, while growth in the airport segment was more modest, rising by +4.0% YOY.

Looking at the quarterly trend last year versus 2024, Q1 was stable, with the next two quarters registering reasonable increases. Q4 was the strongest quarter with revenue accelerating by +10.5% to KRW854.9bn. While the pace has slowed to +7% in Q1 2026, the return to profit is welcome news as it is the first quarter in the black since Q2 2024.

Duty-free profitability returned in the first quarter.

Positive signs in the South Korean market

Shilla Duty Free – which operates downtown locations in Seoul and one in Jeju, plus almost 9,000sq m space at Incheon Airport (ICN), another 8,000sq m at Singapore Changi (SIN), and 3,600sq m at Hong Kong Airport (HKG) – has been the beneficiary of some positive market momentum.

There has been a revival in foreign visitors to Korea, with Q1 breaking records by reaching 4.67 million according to the Ministry of Culture, Sports and Tourism. Meanwhile, Shilla DF’s K-pop strategy – like its rivals, Lotte DF and Shinsegae DF – has also been paying off, particularly with Chinese K-pop fanatics. A spokesperson for Shilla Duty Free also told TRBusiness last year that it was targeting certain high-value groups such as the MICE (meetings, incentives, conventions, and exhibitions) market.

For Q2, Shilla DF will keep a close eye on how travel patterns and travel consumer profiles are changing, and adapt its marketing initiatives and product portfolio accordingly. Hotel Shilla said its duty-free arm would also continue to “focus on profitability recovery in response to changes in the internal/external environment and the travel retail market”.

[* FX conversions at today’s rate.]

READ NEXT: Shilla Duty Free focuses on profit recovery in Q1

READ NEXT: Takeaways from Shilla Duty Free’s third quarter