SEOUL, Oct. 27 (Korea Bizwire) – Speculation that the recently held 19th National Congress of China’s Communist Party would lead to a gradual easing of tensions between China and South Korea is building hope among local tourism and duty-free businesses.
The relationship between the two neighboring countries turned icy after the installation of U.S. missile defense systems (THAAD) on South Korean soil, which resulted in a Beijing-mandated ‘cultural ban’ on South Korean products that has massively depressed the number of Chinese visitors.
Ctrip, a major player in the Chinese tourism industry, has also begun offering tour products, the first time in seven months it has done so.
The positive outlook held by the industry has been encouraged by figures detailing individual Chinese tourists, which have revealed that the number of visitors in September was 56.1 percent lower than the same month last year. Though uninspiring at face value, September was a slight improvement relative to the months of April through August (the cultural ban was introduced in March), during which the number of visitors was 60 percent lower than the same period in 2016.
A travel agency executive explained that the modest growth of individual Chinese tourists could be attributed to cheaper plane tickets, pointing out that applications for individual travel visas had also increased.
In addition, an employee at a hotel in Myeongdong, a shopping neighborhood popular with Chinese tourists, mentioned that the proportion of Chinese guests was slowly increasing.
Duty-free establishments are also on pins and needles over the possible lifting of the cultural ban. Though the sector reported record-breaking sales recently with sales on the upswing, various businesses stressed the need for the resumption of Chinese tourism to pre-cultural ban levels to “normalize” operations.
According to previously released reports, expenditure per customer in September soared to $733, nearly double that of last September’s $421. The sector has pointed out the month was likely a one-off, with the majority of sales generated by Chinese group tours who purchased items in bulk.
One duty-free executive explained that there was so far no noticeable difference in regards to reservations of Chinese tourist groups, but still expressed relief that the “situation appears to be changing bit by bit”.
The sector, which derives a sizable portion of its revenue from Chinese tourists, often through an agreement with travel agencies who make reserved visits, has been one of the areas directly impacted by the Chinese Cultural Ban.
From either the tourism industry or from retail services catering to Chinese tourists like the duty- free stores, the prevailing sentiment is one of wary optimism.