Tourism businesses smile as Chinese tour groups return

Social Affairs

Published: 13 Aug. 2023, 18:01

Tourism businesses smile as Chinese tour groups return

Chinese group tourists at a port in Incheon on Saturday. The Chinese group tour has been opened for the first time in over six years after the Chinese government reinstated Korea among a lists of 78 countries on Thursday. [YONHAP]

Local tourism-related businesses, including cosmetics companies, are hopeful with Chinese group tours returning to Korea for the first time in six years on Saturday.

Cruise ships with Chinese tourists arrived at major ports in Korea on Saturday morning, including one from Qingdao that docked at Incheon with 118 passengers, 81 of whom were on a group tour.

Another cruise ship with 55 passengers that traveled from Qingdao to Pyeongtaek, Gyeonggi, arrived around the same time.

These were the first cruise ships to travel between China and Korea in more than three years since Beijing imposed its lockdown against Covid-19 in 2020.

More importantly, it was the first time in six years that Chinese tour groups set foot on Korean soil.

While China allowed individual tourists to travel to Korea, group tours were banned in 2017 as relations between the two countries soured over Korea’s decision to allow the United States to deploy the Terminal High Altitude Area Defense (Thaad) long-range missile defense system in the country.

The Chinese government considers the missile defense system a U.S. scheme to spy on China, although the U.S. military and South Korean government say its purpose is to defeat potential missile attacks by North Korea.

The lifting of the ban had an immediate impact on the local tourism industry, especially on Jeju Island, a popular destination for Chinese tour groups prior to the ban.

On Friday, all 53 cruise ships traveling from China to Jeju Island were fully booked.

The Chinese Ministry of Culture and Tourism on Thursday reinstated Korea and 77 other nations, including the United States and Japan, to its list of permitted tour group destinations.

Korea had not been among the 20 nations China reinstated in February or among the 40 countries reinstated in March.

In 2016, over 3 million Chinese tourists went to Jeju, accounting for 85 percent of the 3.6 million foreign tourists who visited the island.

Of those Chinese tourists, 1.2 million had arrived on Jeju Island by cruise ship.

The following year, the number dropped 76 percent to 747,000. Last year, less than 9,800 Chinese tourists visited the island.

According to the Korea Tourism Organization, nearly 550,000 Chinese tourists visited Korea, including Jeju, in the first half of this year.

That’s a 627 percent surge compared to the first half of 2022.

The number of Chinese tourists peaked in 2016 when over 8 million visited that year. That same year, the number of foreign tourists broke 10 million for the first time ever, largely thanks to Chinese group tours.

Korea earned 19 trillion won ($14.3 billion) from tourism in 2017, the government said, adding that tourism created jobs as well.

The Korean tourism industry, including connected businesses such as hotels and cosmetics, is looking especially forward to the anticipated surge in Chinese tourists in September and October.

The Mid-Autumn Festival, one of China's biggest holidays, and China’s National Day fall between Sept. 29 and Oct. 6.

Korean airliners are expected to move quickly to increase the number of flights between China and Korea.

Last month, 820,000 Chinese passengers flew to Korea. That’s 52 percent of the number of Chinese air passengers in 2019.

As of July, 670 flights connected Korea and China every week, a significant increase from just 60 flights in January. The Ministry of Land, Infrastructure and Transport in April announced that it will increase those flights to 970 every week by September.

In March, amid rising hopes that China would lift its Covid-19 travel ban, the Korea Center for International Finance projected an increase in Chinese tourists would add 0.3 to 0.5 percentage points to Korea’s economic growth.

The Bank of Korea projected an additional 0.08 percentage point increase in Korea’s economic growth for every 1 million Chinese visitors.

That would mean if 8 million Chinese tourists come to Korea in a year, the country’s economic growth would add an additional 0.64 percentage points.

The Korean government and major institutions forecast this year’s growth to be between 1.4 and 1.5 percent.

However, some analysts doubt that increased tourism from China will significantly help Korea’s economy given Beijing's current economic woes, including deflation caused by falling consumption.

“Hopes are rising regarding larger numbers of Chinese group tours in Korea,” said an NH Investment & Securities analyst. “[But] lately, there are concerns over the slowing Chinese economy and stagnant spending.”

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]