Less Arrivals, Less Departures... Industry Ponders Over China Travel Demand

2.02 Million Chinese Visitors to Korea Last Year
Only 30% of Pre-COVID Levels
Single-Digit Bookings for Zhong Travel Packages
Hotels, Casinos, and Duty-Free Shops Struggle

China, which accounted for a significant portion of the domestic travel market, has been slow to recover demand since the COVID-19 pandemic. The main reasons cited are the prolonged stalemate following the deterioration of bilateral relations, decreased interest as a travel destination after the pandemic, and stricter entry and exit requirements. Industries that previously relied on Chinese travel demand, such as travel agencies, casinos, and duty-free shops, are struggling to complete the puzzle of a performance rebound.

Chinese tourists and others are shopping at a duty-free store in Seoul. [Image source=Yonhap News]

According to the related industry on the 2nd, the number of Chinese tourists visiting our country last year was about 2.02 million, which is only 33.5% of the 6.02 million in 2019 before the outbreak of COVID-19. This is a sluggish trend compared to the recovery rates of 90.3% in the Americas, 78.1% in Southeast Asia, and 70.8% in Japan during the same period. Although the Chinese government allowed group tours to Korea, which had been suspended for 6 years and 5 months since March 2017 due to the deployment of the Terminal High Altitude Area Defense (THAAD), large-scale demand from Chinese group tourists, formerly known as Yukeo, has not significantly increased.

An industry official said, "Chinese travelers now prefer individual travel over group tours, reflecting a change in travel trends," adding, "The local economic recession is intertwined, creating a different atmosphere from the past when Yukeo flocked for shopping and other purposes."

Demand from Korean nationals visiting China has also stagnated. Before COVID-19, outbound travel demand to China (overseas travel by domestic residents) exceeded 4 million annually, competing with Japan for first and second place, but recently, package booking rates at major travel agencies are only in the single digits. An industry insider said, "Negative perceptions of China have strengthened since COVID-19, and visa issuance fees have increased by more than 20-30% from the previous 50,000 won range," adding, "Demand for nearby destinations like Japan and Southeast Asia is very high, and airline routes have expanded mainly to these regions, so travel demand to China remains at about 20% of what it used to be."

The travel industry is hoping for a recovery in Chinese demand as a card to rebound the market situation, which had been depressed by COVID-19. According to the Korea Tourism Organization's 'Korea Tourism Data Lab,' the proportion of spending by foreign tourists on shopping at domestic duty-free shops decreased from 39.8% in 2019 to 20.2% last year. This is mainly attributed to the decrease in Chinese group tourists and changes in shopping patterns. Outbound-focused listed travel companies such as Hanatour, Modetour, and Yellow Balloon also succeeded in turning a profit from the first quarter of last year, but this was largely dependent on Japan and Southeast Asia, so they see the recovery of Chinese demand as the key to a performance rebound.

An industry official said, "Industries that generated revenue targeting Chinese tourists, such as hotels, casinos, and beauty, are also struggling as demand has not revived as much as expected," adding, "Since the tourism industry is closely linked to the economic situation and diplomatic mood of the counterpart country, there are limits to finding solutions solely through industry-level responses."

This content was produced with the assistance of AI translation services.