A foreign tourist observes the demonstration against martial law (Image courtesy of Yonhap)
SEOUL, Dec. 6 (Korea Bizwire) – South Korea’s tourism and retail industries are on edge following the recent declaration and lifting of martial law, as travel warnings from major countries raise concerns about a potential decline in foreign visitors.
While the Korea Tourism Organization reported no significant cancellations as of December 5, signs of apprehension are emerging. Japanese tour groups, a key segment of South Korea’s inbound tourism market, have started canceling trips, with some travel agencies reporting inquiries about safety. A major Japanese student group scheduled for a visit later this month has already withdrawn.
Tourism Industry on Alert
Countries such as the UK and Israel have issued warnings about potential unrest in Seoul, discouraging non-essential travel. This has placed South Korea’s goal of attracting 20 million foreign tourists in 2024 in jeopardy, especially with longer lead-time bookings from Europe and the United States now facing heightened scrutiny.
Chinese tour operators and other foreign visitor-focused businesses are monitoring the situation closely. A representative from a travel agency specializing in Chinese tourists noted rising concerns but predicted clearer trends in the coming weeks.
Retailers Fear Year-End Sales Slump
Retailers, particularly those in tourist-heavy areas such as Myeongdong and Hongdae, are worried about the potential impact on year-end sales, a critical period for the sector. Luxury department stores like Shinsegae and Lotte reported no immediate decline in foreign spending, with Shinsegae’s Gangnam location recording a 77.6% increase in foreign sales year-over-year.
Duty-free operators, however, are more cautious. Lotte Duty Free and Shinsegae Duty Free expressed concerns about diminished tourist traffic coupled with the ongoing pressure of a strong US dollar, which could hurt product pricing competitiveness.
Mixed Signals in Consumer Goods
Retailers like CJ Olive Young, popular among international shoppers, reported no immediate impact. The chain has seen surging foreign sales this year, with its flagship Myeongdong store attracting 4,000-5,000 international visitors daily. Similarly, other brands targeting tourists, including Daiso and Musinsa, observed robust growth in foreign sales earlier in the year.
However, industry insiders warn that any prolonged decline in foreign tourists could ripple across the sector, particularly for stores heavily reliant on international visitors.
Government and Industry Prepare for Contingencies
The Ministry of Culture, Sports, and Tourism is closely monitoring the situation, emphasizing that no widespread cancellations have occurred. However, with foreign inquiries growing, the ministry remains cautious about the long-term implications for South Korea’s tourism recovery.
As retailers and the tourism industry gear up for a critical December, both sectors are walking a fine line, hoping to weather the turbulence while bracing for potential setbacks. The incident serves as a stark reminder of how quickly geopolitical concerns can ripple through the global economy.
M. H. Lee (mhlee@koreabizwire.com)
