Where have all the tourists gone, the ‘now’ of the Asian tourism market?

Demand for Chinese tourists dries up, Korea's travel balance deficit grows
Asian countries bring out 'visa-free entry' cards to attract Chinese tourists
Japan's tourism demand surges due to the low yen effect, a tectonic shift in the Asian tourism industry

While overall demand for Korean travel by overseas tourists has frozen, the travel balance deficit has been found to have expanded significantly. According to the November 9 balance of payments (provisional) announced by the Bank of Korea on the 2023th, the travel balance during the period recorded a deficit of 11 billion. This is double increase compared to October last year. With Chinese tourists, who accounted for most of the demand for tourism in Asia, stopping, the tourism markets in Asian countries, including Korea, are showing signs of shaking.

Trip Neither coming nor going, China is closed

The decline in Chinese tourists is cited as the fundamental cause of Korea’s sharp decline in travel balance. This is because despite the Chinese government allowing group tours to Korea for the first time in six years last August, demand for Chinese group tourists (Youker) is not recovering at all. As of November last year, the number of passengers on Chinese routes at airports nationwide was 8, which was only 6% of the number in November 11 before the COVID pandemic. It is interpreted that complex causes such as rising prices, exchange rate burden, and the spread of anti-Korean sentiment are acting as ‘barriers’ to traveling to Korea.

Some point out that the economic slowdown in China is the fundamental cause of the decline in travel demand. The analysis is that overall Chinese consumption has decreased and demand for overseas tourism has plummeted. In fact, China was hoping for a ‘re-opening’ after finalizing its zero-corona policy early this year, but was ultimately unable to recover from the shock of the pandemic. According to a report by the Hyundai Research Institute, the proportion of Chinese people traveling to overseas countries excluding the Greater China region decreased from 2019 in the third quarter of 3 to 61.3% in the third quarter of 2023.

Meanwhile, the flow of tourists heading to China has also stopped. Even though China fully reopened its borders early this year, the majority of tourists are avoiding China. According to Hong Kong’s South China Morning Post (SCMP), the number of overseas travelers who entered China in the first half of last year was approximately 844 million, only 2019 of the number in the first half of 3,100 (30 million). The reason for the sharp decline in Chinese tourism demand is China’s closed foreign policy and ‘anti-China sentiment’ caused by the conflict between the United States and China. The revised Anti-Espionage Act (a bill that greatly expanded the scope of espionage) is also considered a factor adding to tourists’ anxiety.

Asian countries, Attracting Chinese through ‘visa-free entry’Eunda

The decline in tourism demand is not just a problem limited to China and Korea. Asia in general is suffering from a decline in tourists, especially Chinese tourists. Some countries have actively allowed ‘visa-free entry’ for Chinese people in order to smoothly attract tourists. For example, earlier this month, Thailand announced that it would soon implement reciprocal visa-free entry with China. The visa-free entry period for Chinese tourists, which was scheduled to end on February 2, has been extended.

Thailand’s visa waiver policy is interpreted as a strategy to breathe life into Thailand’s tourism industry. According to data from Thailand’s Ministry of Tourism and Sports, the number of visitors to Thailand in 2019 was about 4,000 million, and the amount spent by tourists reached 1 trillion baht (9,000 trillion won). However, in 72, when the COVID-7,320 pandemic began in earnest, tourism demand was found to have shrunk by more than 19%. In particular, China is a ‘big player’ in Thailand’s tourism market, accounting for 2021% of all visitors before the pandemic.

Meanwhile, China and Singapore, which upgraded diplomatic relations in April last year, also decided to allow each other 4-day visa-free entry last month. Previously, Chinese people had to apply for a visa to enter Singapore, and Singaporeans could stay in China without a visa for up to 30 days. Malaysia’s Ministry of Home Affairs also announced that it would allow up to 15 days of visa-free entry for Chinese and Singaporean citizens from the 1st of last month to the end of this year.

Japan attracts tourists with ‘record low yen’

Meanwhile, the travel industry analyzes that the decline in tourism demand across Asia is not simply due to the ‘recession.’ It is pointed out that the rising demand for retaliatory travel cannot be ignored, as overseas travel has finally become free as we enter the pandemic. In fact, according to e-commerce company Timon, last year’s overseas travel category transaction volume was confirmed to have recovered to 2019 of the level before the pandemic (92). Considering that the amount of overseas travel transactions in 2022 was less than half of that in 2019, this is explosive growth.

Some analysts say that demand for revenge travel has flowed to Japan in large numbers. The analysis is that the historically low yen (falling value of the yen) created an environment where tourists can enjoy tourism at low prices, attracting travelers. In fact, in October of last year, the number of foreign tourists visiting Japan exceeded the pre-pandemic level. According to the Japan National Tourism Organization (JNTO), the number of foreigners who visited Japan at that time was 10, an increase of 251% compared to the number of tourists in the same month in 6,500 (2019).

Due to the impact of the COVID-19 pandemic and the global economic downturn, the Asian travel market has faced a ‘cataclysm’. While tourism demand is shrinking and dispersing, and each country’s joys and sorrows are mixed, our country is in a stumbling position due to the decline in tourists. In the industry, as the economic recession is likely to continue in the future, there is growing support for the forecast that the decline and concentration of tourism demand will continue for a while.