The Korea Tourism Organization (KTO) said that foreign tourist arrivals in the country slackened further in May, down 34.5 percent YoY, with tourists from regions other than China also down, joining Chinese tourists in the month. China has been putting pressure on Korea by dissuading its nationals from visiting the country to protest against Korea’s decision to install a THAAD missile shield on its territory to defend against North Korean missiles.
The KTO said the number of foreign tourist arrivals in the country in May totaled 978,000, down 34.5 percent YoY, marking a three-month consecutive decline since the Chinese government took measures to protest Korea’s installation of the missiles on its territory. The number of foreign tourist arrivals in Korea from January to May also declined 12.1 percent YoY, coming to 5.76 million. The number of Chinese visitors came to 253,000 in May, down 64.1 percent YoY, despite reports that said the Chinese authorities had relaxed measures aimed at restricting its tourists visiting Korea.
Tourists from southeast Asia and the Middle East had been rising, partly because of Korean tourism authorities’ measures to diversify its tourism markets to make up for reductions in the number of Chinese tourist arrivals. However, even those tourists from those places are down 15.2 percent YoY, due mostly to Ramadan falling from May 27 to June 25, with Muslims opting to defer overseas travels during the religious holiday period. The Korea Tourism Organization statistics for April, released recently, show a minis-66.6 percent year-on-year slump in Chinese visitors, driven by the THAAD dispute between South Korea and China.
As reported, South Korea’s decision to deploy the US defense system infuriated the Chinese government and led to a massive backlash against Korean companies. The tourism and travel retail sectors, heavily dependent on Chinese visitors, have been among the worst-affected On 15 March, China imposed a ban on group tours to South Korea, leading to a minus-40 percent year-on-year fall in Chinese arrivals in March and now this month’s calamitous minus-66.6 percent decline. The number of Chinese group tourists in April collapsed by 73.6 percent to 158,784. Chinese arrivals reached just 227,811 for April, representing 21.3 percent of total visitors, compared with 682,318 in April 2016, a 46.4% share. For the first four months of 2017, Chinese arrivals decreased by 25.8 percent to 1,744,626.
South Korean tourism and travel retail executives are hopeful that the election of new Korean President Moon Jae-in on May 9 will lead to a rapid improvement in relations with China. Before the election, Moon pledged a much softer line on THAAD and on relations with North Korea than his predecessor, the now disgraced Park Geun-hye.
South Korea's tourism sector, which has been hit hard by a dearth of Chinese visitors after Beijing banned its travel agencies from offering travel packages to the neighboring country, is moving quickly to reshape itself to move forward, industry watchers said.
Nearly a month into the ban, local tourism and hospitality businesses that had overly relied on Chinese visitors are scrambling to reassess developments and reprioritize their long-term strategies. The shift necessitated by the change includes looking to attract more visitors from other nations and promote more in-country travel, sources said. The sudden drop in inbound Chinese tourists is the result of a diplomatic row between Seoul and Beijing over the planned deployment of a U.S. Terminal High Altitude Area Defense battery on South Korean soil. Chinese nationals accounted for nearly half of inbound foreigners in 2016, with their individual spending estimated at about $2,080 per person, according to the KTO. Besides tourism, many local companies and goods have been hit hard by China's open objections to the missile defense system. China has slammed THAAD for hurting its security interests, despite repeated assurances by South Korea that the weapons system is to counter North Korea's evolving nuclear and long-range missile threats.