SOUTH KOREA - South Korea has seen double-digit growth in tourism over the last couple of years, with record annual growth of 11.3 per cent last year, and is on track to welcome over 12 million visitors this year.
But the strong Korean currency and changes in the political dynamics in Northeast Asia may put a stop to the fast growth next year, experts suggest. Korea earned 1.4 billion won (US$1.3 million, S$1.6 million) from tourism in the January to October period, a 25 per cent increase form the same period last year.
According to tourism authorities, the number of foreign tourist arrivals in Korea has increased by 9.1 per cent from January to November. The country is expected to welcome the 12 millionth annual visitor on Jejudo Island today, which is hailed as another landmark achievement in Korean tourism.
But experts say the country may not enjoy such success for too much longer - the influx of Chinese tourists is expected to slow down while the number of Japanese has already been falling since October of last year.
"It may be difficult to see such rapid growth as we had for the past couple of years again next year," said Kim Sung-eun, deputy director of the R&D centre of the Korea Tourism Organisation.
"This year's growth is driven by Chinese tourists, who have remained the biggest contributor to the growth of the market. Although the currency situation has not been so friendly to them, many Chinese tourists came to Korea due to the charms they find in Korea," Kim added.
With the Korean won expected to remain strong against Chinese yuan next year and possible changes to be made in Chinese currency policy, the number of Chinese tourists may not be as high as it was this year, according to Kim.
Seo Young-choong, director of the KTO's China team, agreed that the fast growth the Korean tourism industry has enjoyed recently could recede.
"Due to the political tensions lingering in Northeast Asia on top of the currency issue, the outlook for the tourism industry for the next couple of years doesn't seem rosy," said Seo.
While the Korean tourism industry heavily depends on Chinese tourists, Chinese tourists might consider other holiday destinations next year, he said.
"The number of Chinese tourists to Japan has been recovering, which is not good news for us," he said. "Another factor will be the Thai market. China and Thailand have been discussing a visa waiver programme. If it is successful, Southeast Asia might become an attractive region for Chinese tourists. This would spark competition among countries which have enjoyed a large number of Chinese tourists."
There's still optimism that Korea will stay immune to such changes because the country still saw a 30 per cent growth in the number of Chinese tourists in November and December, even after the revised Chinese travel law took effect in October.
The law prohibiting forced shopping trips and extra tour fees has reportedly increased the travel costs by up to 70 per cent. After receiving complaints from the Chinese travellers, who consider shopping an important part of their itineraries, the Chinese tourism authorities on December 16 announced an easing of regulations on arranged shopping trips, which may be good news for the Korean tourism industry.
The industry is making efforts to cope with the possible stormy weather.
Souvenir shops also decided to lower the prices of their goods and the commissions paid to tour agencies and guides in an attempt to combat the negative image of Korea as a stage for forced shopping trips. The Korea Association of Travel Agents and a total of 187 souvenir shops in Korea agreed to lower the price of amethyst by 10-20 per cent and limit the price of ginseng to under 200,000 won (US$188).