[Domestic Market Revives]② "Sales 80% Recovered"... Spring Breeze in Myeongdong as Foreigners Return

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"Compared to last year, it's much better. Even compared to before COVID-19, I think sales have recovered about 80%."

Mr. A, who has been running a business in Myeongdong for 45 years, recently spoke about the current atmosphere in the Myeongdong commercial district. During the 10-minute conversation, several foreign tourists of various nationalities showed interest by picking up hats, socks, and other accessories displayed side by side. Mr. A said, "These days, the largest proportion of tourists are from Southeast Asia, including Indonesia, the Philippines, Thailand, Vietnam, and Hong Kong, and the number of Japanese tourists is also steadily increasing. At the beginning of last year, there were no customers at all, but now business is bearable."

On the 26th and 27th, during a two-day visit to the Myeongdong commercial district in Jung-gu, Seoul, the area was bustling with returning foreign tourists. Although still lacking compared to before the COVID-19 outbreak when Jungang-ro in Myeongdong was packed with Chinese tourists, street vendors, and shoppers, the atmosphere has completely changed compared to when the Myeongdong commercial district was hit hard by COVID-19 from 2020 to 2022. After 4 p.m., even on weekdays, Jungang-ro and some alleys were so crowded with increased crowds that walking quickly was difficult.

On the 26th, the street in front of Myeongdong Art Theater is bustling with foreign tourists.

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B, a 35-year-old office worker met in Myeongdong, said, "Last year, when I came to Myeongdong in the evening, there were few people and many vacant stores, so it felt a bit scary, but now the streets are definitely crowded and bright," adding, "I really feel that COVID-19 is over." In fact, families with children pushing strollers and groups of 3 to 4 tourists pulling suitcases were frequently seen throughout Myeongdong.

A Seoul city tourist guide, busy attending to inquiries from lines of foreign tourists, said, "As you can see, the number of foreign tourists has increased a lot," adding, "Not only Japanese but also many from Southeast Asian countries are coming, and the level is incomparable to last year." Amid the recent slump in semiconductor exports and a sharp contraction in the current account surplus, this increase in foreign tourists is expected to support domestic demand recovery and greatly help revive the sluggish economy.

According to the Korea Tourism Organization, the number of foreign visitors entering South Korea for tourism purposes was 1,247,337 in December 2019 before the COVID-19 outbreak, but plummeted to 5,135 in April the following year and remained below 100,000 for two years. As pandemic fears subsided, the number began to recover slightly from June last year, surpassing 300,000 in October. From January to March this year, the total number of foreign tourists was 1,259,626, more than 37 times the 33,473 during the same period last year.

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A notable change in the Myeongdong commercial district compared to before COVID-19 is the decrease in Chinese tourists, replaced by tourists of various nationalities.

A merchant met at Myeongdong 3rd Street said, "Since COVID-19, I see Chinese international students and Taiwanese people, but hardly any Chinese tourists," adding, "These days, Myeongdong tourists are multinational." At cosmetic stores like CJ Olive Young in Myeongdong, nearby department stores, and on the streets, Japanese conversations were heard more often than Chinese.

Among Myeongdong merchants, there is hope that the commercial district will revive further once group tours from China resume. The Bank of Korea recently stated in its report on "The Domestic Economic Impact of China's Reopening" that "Chinese tourists' recovery is slow due to the Chinese government's ban on group tours and a shortage of air routes between Korea and China, limiting the overall recovery of inbound tourists," and explained, "In the short term, whether Chinese tourists recover will affect the domestic economy."

In Myeongdong, foreign tourists' strong interest in K-pop, which is popular worldwide, was also confirmed.

On that day, the K-pop CD store in the Myeongdong underground shopping center was continuously visited by foreign tourists. When the aisle became congested with customers, one store even posted a notice asking customers to open albums outside the underground shopping center. C, an employee at a Korean celebrity goods store in the Myeongdong underground shopping center, said, "BTS products sell overwhelmingly well, and there is also a lot of interest in BLACKPINK, TWICE, and NewJeans," adding, "Sales have increased a lot recently."

On the 26th, a K-pop CD store in the Myeongdong underground shopping center in Jung-gu, Seoul, was bustling with foreign tourists.

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As the Myeongdong commercial district revives, rents are also rising.

An employee at D Real Estate Agency in Myeongdong said, "Six months before foreign tourists recovered, quick movers took advantage of the lowered rents and signed many lease contracts," adding, "There are still some vacancies near 1st Street, but almost no vacant first-floor stores near 3rd Street." Another official said, "Since last year, rents have been rising with every monthly lease contract, and at this rate, it seems the pre-COVID-19 level will be recovered by next year."

Although domestic demand has greatly revived, the aftereffects of COVID-19 have not completely disappeared. Despite the recent increase in tourists, many voices say it is still difficult due to deficits accumulated since last year and high interest rates.

Mr. E, who opened an accessory store in Myeongdong at the end of 2019 just before the COVID-19 outbreak, said, "Sales started to decline from mid-February 2020, and in this large store, we sold only 100,000 won a day while paying several tens of millions of won in rent," adding, "We endured for three years and borrowed several hundred million won from banks." He said, "It's true that business is doing well recently, but all the earnings go to the bank for loan principal and interest," adding, "After paying salaries and rent, my bank account is always empty."

On the 27th, a "Help Wanted" notice was posted at a cosmetics store in the Myeongdong shopping district, Jung-gu, Seoul.

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