Jeju Island's natural beauty has drawn large numbers of Chinese tourists, and costs for its residents. Photo: Shutterstock

Jeju Island attracts a massive number of tourists annually. Currently, this number stands at about 15 million a year, with Chinese tourists accounting for 80 percent of international arrivals. However, Jeju has also become a reminder that destinations have to manage the social and financial costs of tourism effectively. The South Korean government wants to boost the number of arrivals to 45 million by 2035 by constructing a new international airport. The plans have been protested by residents, with one activist leader quoted by the South China Morning Post as saying residents were “glad” that the ongoing tour group ban had reduced the number of tourists to Jeju.

Many Jeju residents are “glad” there aren’t many Chinese tourists coming anymore

The resistance to increasing the number of international arrivals in general, and Chinese tourists specifically, hinges on the substantial costs Jeju residents believe that such tourists bring to the island. Chinese tourists have a reputation for being “badly behaved,” with numerous stories in destinations around the world of inconsiderate Chinese travelers damaging tourist sites and littering.

But regardless of whether Chinese tourists are more badly behaved than tourists from other source markets, it’s hard to deny that a large number of international arrivals from any country will strain the infrastructure and environment of destinations. This holds especially true for smaller destinations. Jeju Island has a population of about 660,000 and is only 714 square miles. 15 million tourists is already a huge number of tourists, tripling that would only make the traffic congestion, litter, and crowds that much worse for locals.

A large number of tourists from any source market can result in substantial social costs for a destination’s residents

Jeju residents are also frustrated because they believe they are not getting a fair share of the profits. Many argue that the Chinese tour groups, who no longer come to Jeju, only bring tourists to Chinese owned restaurants and shops, and stay at international hotel chains, leaving natives to shoulder the burden of the arrivals without profiting. This is a hard claim to judge. But considering that Chinese tour companies may find it easier to contact and deal with Chinese business or international chains on Jeju, it’s certainly possible that a large chunk of the revenue derived from Chinese tourists never reaches locals.

Perhaps most significantly, resistance on the part of locals to efforts to attract more Chinese tourists by the South Korean government has remained strong, despite the huge drop in Chinese arrivals because of the ban on the sale tour packages by the Chinese government in the wake of the THAAD conflict. The implication is that the incentive of more tourist revenue isn’t likely to sway protesters.

Destinations around the world are struggling to manage the heavy environmental and social challenges of global Chinese travel

This clash between the government’s hope for more Chinese tourism revenue and the concerns of locals is by no means unique to Jeju or South Korea. It’s a problem that’s affecting destinations around the world, but particularly in Asia where middle-class Chinese tourists are more likely to travel around via tour groups. Approaching the issue of encouraging Chinese tourism must take into account all costs and benefits, beyond a simple understanding of revenue vs. financial costs. A rapid rise in tourism brings about a whole host of negative externalities for communities.

Bali is another stark example, with the Indonesian government desperate for Chinese tourism revenue. The new ambitious luxury tourism project at Benoa Bay has ignited protests against the environmental and social costs of tourism for the small island. While this is not strictly a response to Chinese tourism, Chinese travelers make up the largest and fastest growing tourist demographic for both Indonesia and Bali. Fundamentally, the most significant new strains upon Bali’s environment and infrastructure for the next decades will likely come from Chinese travel, assuming that trends hold.

Thailand has opted to crackdown on exploitative tour groups that don’t benefit locals

Laos and Thailand are two other examples of destinations that are struggling with this issue. The Laotian government, for example, has been warning tour agencies arranging groups to come to the country that they must cooperate with local tour operators, or they could face legal consequences. Thailand too has had a similar issue. In response, the Thai government cracked down on so-called “zero-dollar tours,” which leverage overpriced shopping experiences to make up for discounted transportation and accommodation. These types of tours notoriously only make stops at Chinese-owned restaurants and shops. The hope, of course, is that these destinations will encourage a larger number higher-quality (and higher-revenue) travelers.

All of these examples should encourage destinations to have a more robust and comprehensive cost-benefit analysis of tourism. It’s challenging to adequately measure the amount of revenue that goes to Chinese firms over local firms, and social costs are often impossible to quantify. Regardless, there are steps that destinations can take.

One method is to attract more high-income travelers and reduce the number of total arrivals. Even if locals have little opportunity to benefit from tourism, at least costs will be mitigated.

Naturally, not every destination can become a high-end travel spot. Governments may have to consider means of forcing foreign tour operators to cooperate with local firms or consider direct compensation for locals, perhaps through lowered taxes, subsidies, or dividends. The U.S. state of Alaska, for example, gives each of its residents a dividend from the oil industry. Even if a resident isn’t employed by the oil and natural gas industry, they still directly benefit from the state’s natural resources. Perhaps it’s time for locals across Chinese tourism hotspots to benefit from this booming industry as well?