The Korea Institute for Industrial Economics and Trade (KIET) said on May 21 that the number of Chinese tourists visiting South Korea increased from approximately one million to seven million between 2010 and the first half of 2016. Between 2010 and 2016, the amount of the money they spent in South Korea increased at an annual average of 45.4%, too. The annual amount before the Chinese government’s anti-Korean Wave measures is estimated at 18 trillion won (US$16 billion).
The inbound tourists spent most of their money on shopping. Specifically, their money spent for the purpose increased at an annual average of 56.1% during the period and reached at least 12.8 trillion won last year, which is equivalent to 70.5% of the total.
The number of Chinese tourists visiting South Korea, however, began to drop in July 2016, when the Chinese government initiated the measures with regard to THAAD deployment in South Korea. The number during the most recent month declined by more than 60% from a year ago in the wake of the Chinese government’s ban on travel to South Korea initiated in March this year. Under the circumstances, the profits of South Korean cosmetics companies, accommodation providers and airlines took a direct hit.
“If this situation continues for six to twelve months, the amount of money Chinese shoppers spend in South Korea is likely to fall by 54% to 80% in comparison to the level at which no such measures are assumed,” the KIET explained, adding, “The percentages are equivalent to 5.6 trillion won (US$5.0 billion) to 15.2 trillion won (US$13.6 billion) in value.” The KIET also pointed out that attraction of non-Chinese tourists, personalized content for individual tourists from China and improved products and services can be alternatives.