South Korea wants tourists to come back

South Korea announced Monday (4 September) it’ll waive visa fees and move to add more direct flights from China to entice more Chinese tourists.

Tourism from China is a major source of income for South Korea. But in 2017, China banned tour groups from visiting South Korea in response to Seoul’s deployment of a US-made missile defence system.

And the ban’s impact was real. Within a year:

  • 👪 The number of Chinese tourists visiting South Korea halved from eight to four million, and
  • 📉 Seoul’s total tourism earnings fell from $17.1B to $13.3B.

But last month, China lifted the ban after six years. Now, South Korea is doing all it can to welcome those tourists back.

Intrigue’s take: South Korea was long spooked at the prospect of falling into the ‘middle income trap’ (where growth stagnates at a certain level).

It cruised into high-income status in 2017, but has remained focused on diversifying its economy to boost resilience. Tourism is a key part of that equation, but waiving visa fees might not be enough.

Also worth noting:

  • Pre-COVID, Chinese tourists spent a combined $255B abroad each year, with group tours accounting for roughly 60% of that spend.
  • Beijing also lifted its ban on group travel to countries like the US, UK, Australia and Germany last month. China lifted the ban on Russia back in January. Canada remains banned.