Travel account deficit in H1 climbs to $6.5 billion on changing tourist trends

Economy

Travel account deficit in H1 climbs to $6.5 billion on changing tourist trends

Published: 15 Aug. 2024, 16:25 Updated: 15 Aug. 2024, 19:07

SHIN HA-NEE
shin.hanee@joongang.co.kr

Foreign tourists visiting Gyeongbok Palace in Jongno District, central Seoul, use umbrellas to avoid rain as heavy downpours and strong winds hit the central region on July 22. [NEWS1]

Korea's travel account logged its highest first-half deficit in six years during the January-June period this year, data showed Thursday.

The significant loss was driven by a surge in overseas travel, coupled with a decline in foreign tourist spending in the country compared to pre-pandemic levels.

Korea posted a travel account deficit of $6.48 billion for the first six months of this year, compared to a negative account of $5.76 billion during the same period last year, according to data from the Bank of Korea and the Korea Tourism Organization.

The first-half figure marked the highest loss since 2018, when it reached $7.83 billion.

The deficit came as overseas spent $14.3 billion on overseas travel from January to June, far outpacing the $7.84 billion spent by foreign visitors in the country.

The half-year travel account deficit decreased to $2.9 billion in 2019 and remained relatively low at $3.5 billion in 2021 and 2022 during the Covid-19 pandemic. However, it rebounded to $5.8 billion in 2023 as virus-related restrictions were eased.

In the first half of this year, 14.02 million Koreans traveled abroad, while 7.7 million foreigners visited the country.

The number of Koreans who traveled overseas rebounded to 93.4 percent of the pre-pandemic level in the first half of 2019. The number of foreign tourists visiting the country reached 91.3 percent of the pre-pandemic level.

In terms of travel expenses, Korean nationals spent 89.2 percent of what they did overseas before the pandemic, while foreigners' spending in Korea reached only 75.4 percent of the pre-pandemic level.

The trend is partly attributed to a recent shift in foreign tourists' spending habits, as they have become more inclined to prioritize experiences over shopping.

While 92.5 percent of foreign tourists visiting Korea went shopping back in 2019, the figure dropped to 78.3 percent in 2023, according to a survey released by the Korea Culture & Tourism Institute in June.

BY SHIN HA-NEE, YONHAP [shin.hanee@joongang.co.kr]