South Korea has been posting modest gains in the number of Chinese arrivals over the past few months. The latest numbers for March of this year from the Korea Tourism Organization (KTO) show that 403,000 Chinese tourists traveled to South Korea, representing growth of 11.8 percent over last year during the height of the travel ban. Moreover, some retail outlets have recently reported strong upticks in sales to Chinese tourists during the recent Labour Day Holiday.

Chinese tourist arrivals to South Korea in March passed 400,000, up 11.8 percent compared to last year

As Jing Travel has discussed before, the return of Chinese tourists to South Korea is not as good as it seems. While arrivals are on the rise, they’re nowhere near to the pre-THAAD, pre-travel ban levels. For example, the most recent gain of 11.8 percent for March 2018 over March 2017 to 403,000 is still far below the 602,000 Chinese tourists that arrived in the country in March 2016. In fact, March’s gain this year is only a return to 2014 numbers for the same month. In short, South Korea’s tourism industry still has to make up a lot of lost ground.

On the other hand, this resurgence could represent a major opportunity for South Korea to retool its tourism industry in order to avoid the problems that have plagued other popular Asian destinations like Thailand. When a destination has few, if any Chinese tourists, tour groups are a welcome sight and can boost revenue. However, the lower profitability of tour groups for destinations and local businesses grows exponentially as the number of such groups increases year after year.

The sharp drop in the number of Chinese tour groups, and total number of tourists, is also an opportunity to make South Korea’s tourism industry more profitable

South Korea’s recent growth in the number of Chinese tourists is encouraging less on account of the number travelers, but rather the fact that they are all independent travelers, with the ban on tour groups still in effect. Independent travelers spend more per capita and tend to benefit local businesses more dramatically. The big uptick in sales at major Korean retailers illustrates that these new Chinese tourists are willing to make big purchases. Per capita, they’re far more valuable than the tour group tourists of 2015 and 2016.

It’s likely in fact to be in South Korea’s best interest to focus on promoting growth in independent travel instead pursuing more traditional tour group Chinese tourism. Getting arrival numbers back up to their pre-THAAD levels should not be the main priority.

In many ways, South Korea is well-positioned to harness this, probably more so than any other destination in Asia. While the number of Chinese tourists to the country plummeted in 2017, the allure of South Korea’s pop culture remained extremely strong. The popularity of the K-Wave has persisted despite tensions between Seoul and Beijing and record duty-free sales have reflected this.

South Korea’s cultural appeal has fueled the rise of independent Chinese travel

It’s clear that there is a large number of Chinese independent tourists that will be willing to travel to South Korea regardless of the availability of cheap tour groups and that they will be able to spend a great deal more than their tour group counterparts. Moreover, these travelers will likely be less sensitive to political disputes and willing to take the time to arrange their own travel needs like visas and hotels, as opposed to paying a tour company to do it for them. This translates into a more profitable per capita, steady stream of Chinese travelers to South Korea. This kind of appeal to independent Chinese travelers that many destinations around the world are understandably envious of.

Reorienting South Korea’s tourism industry and related policies now, while the number of Chinese tour groups is virtually zero, is likely easier now than it would have been two or three years ago and could help cultivate this large and growing number of independent Chinese travelers.

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