SOUTH KOREA. Chinese visitor numbers to South Korea in September climbed by +22.8% in September to 726,266, a sharp easing over August’s +70.2% increase.
For the first nine months of 2016, Chinese arrivals rose +45.2% to 6,334,312, according to Korea Tourism Organization, giving the nationality a dominant 48.7% share of the inbound visitor market.
Any assessment of the figures needs to factor in last year’s MERS health crisis, which resulted in 2015 year-on-year declines of -45.1% in June, -63.1% in July and -32.3% in August. Tourism returned to growth in September 2015, with a modest +4.8% rise over the same month in 2014. The September 2016 total is 28.8% over the normalised September 2014 baseline.
Tellingly, 46.9% of Chinese arrivals in the first nine months were aged between 21 and 40, an increasingly key battleground for Korean travel retailers. Those between 21 and 30 are now the dominant group, representing 25.6% of Chinese arrivals.
Korean travel retail executives are monitoring visitor figures closely to assess the impact of two key – and possibly related – factors. The first is Chinese anger at South Korea’s decision to deploy the advanced US missile defence programme THAAD by late 2017. That move, announced earlier this year, prompted a furious response from the Chinese government and Korean travel retailers have been fearful about a backlash against the tourism industry. The second factor is the Chinese government’s crackdown on cheap overseas group tours, ostensibly because of exploitation of Chinese travellers.
Tellingly, 46.9% of Chinese arrivals in the first nine months were aged between 21 and 40, an increasingly key battleground for Korean travel retailers.
The market reacted with alarm to reports in October that China would curb group tours to South Korea, leading to a slump in travel-related stocks.
Group tourists still dominate the Korean visitor market, accounting for 86.1% of Chinese arrivals in the first nine months. In a major report to be published soon by The Moodie Davitt Report*, we note intensifying efforts by retailers to attract more free independent travellers (FITs).
Chinese visitors are critical to South Korea’s travel retail sector (the world’s largest), representing around half of total arrivals and a significantly higher proportion of duty free sales (over 80% at the flagship downtown Seoul stores of Lotte and Shilla, for example).
Japanese arrivals rose an encouraging +32.7% in September to 208,759 and +24.6% to 1,660,324 (12.8% of total arrivals) in the first nine months.
Equally positively, the number of departing Korean nationals rocketed +26% to 1,904,524 in September and by +17.8% in the first nine months to 16,684,902.
*Footnote: Look out for a major report on the South Korean travel retail market by Martin Moodie in the next issue of The Moodie Davitt Report Print Edition (with regular online updates before that). Moodie has been visiting South Korea every year since 1989 and will bring you unrivalled depth and insight of coverage, including interviews with the major players.
