SOUTH KOREA. Korea Tourism Organization statistics for April, released today, show a -66.6% 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 defence 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 -40% year-on-year fall in Chinese arrivals in March and now this month’s calamitous -66.6% decline. The number of Chinese group tourists in April collapsed by -73.6% to 158,784.
Chinese arrivals reached just 227,811 for April, representing 21.3% 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% to 1,744,626.
As reported, South Korean tourism and travel retail executives are hopeful that the election of new Korean President Moon Jae-in on 9 May 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 Korean travel retailers have been targeting other nationalities, particularly Japanese and Korean nationals, to help offset the slump in Chinese spending (estimated at around 65-70% of the Korean travel retail market last year). But the April numbers offer little cause for cheer there either, with Japanese arrivals off by -5,4% year-on-year to 165,748, a 15.5% share of arrivals. Even Korean departures were down by -8.7% in April to 8,008,675, after rising by +10.9%, +18.9% and +23.7% in January, February and March, respectively.
Duty free spending hit hard
Quoting the Korea Duty Free Shops Association, The Korea Herald said that the number of foreign customers to South Korean duty free stores dropped by -19.2% month-on-month in April. The April figure was the lowest in nearly two years since the MERS health crisis in 2015, the newspaper pointed out.
Total duty free sales to foreigners fell by -11.2% to US$590 million in April from March, the report said. Sales to Korean nationals gained +12% to US$299 million.
