Despite a record number of foreign tourists visiting South Korea this year, the tourism balance has recorded a deficit for three consecutive months. Although the deficit has decreased compared to the same month last year, the improvement has been shrinking each month since June. This trend is attributed to a slowdown in tourism revenue growth and an increase in domestic travelers' overseas spending.
According to the Korea Tourism Organization's Korea Tourism Data Lab, the tourism balance for September was a deficit of $498 million. This is a 28.4% reduction from the deficit of $695.4 million in the same month last year, but it represents a deterioration of about $1.095 billion compared to the surplus of $596.6 million recorded in June.
In June, tourism revenue increased by 50.0% compared to the same month last year, while tourism expenditures decreased by 19.0%, resulting in a significant surplus. However, in July, tourism revenue declined from the previous month while expenditures increased, leading to a return to a deficit.
Although tourism revenue continued to grow, the rate of increase has slowed. The growth rate for the first half of the year was 36.4%, but it dropped to 24.3% in the third quarter. Monthly growth rates also fell from 50.0% in June to 16.4% in September. In contrast, tourism expenditures increased by 5.6% and 5.3% in August and September, respectively, compared to the same months last year.
The improvement in the tourism balance compared to the same month last year also decreased from $1.4434 billion in June to $609 million in July, $410.1 million in August, and $197.4 million in September.
In September, the number of visitors to South Korea increased by 21.1% compared to the same month last year, but tourism revenue only rose by 16.4%. Per capita tourism revenue, calculated by dividing total tourism revenue by the number of visitors, was $1,193, a 3.9% decrease from the same month last year. While the number of visitors increased, the decline in per capita tourism revenue meant that the overall growth rate in tourism revenue did not keep pace with the increase in visitors.
Domestic travelers' overseas spending has been rising faster than the growth rate of outbound travelers. In September, the number of outbound travelers increased by 1.5% compared to the same month last year, while per capita tourism expenditures rose by 3.8%. The overall growth rate in tourism expenditures was 5.3%.
Approximately 2.27 million people traveled abroad in September, about 200,000 more than the number of visitors to South Korea. Per capita tourism expenditures were $1,304, which was $111 more than per capita tourism revenue. In June, per capita tourism revenue exceeded expenditures by $306, but by September, expenditures surpassed revenue by $111.
The cumulative tourism balance for this year has significantly improved compared to last year. From January to September, the deficit was $2.296 billion, a 70.9% decrease from the same period last year. Of the $5.3777 billion improvement, approximately 95% came from increased tourism revenue.
However, there remains a considerable gap to achieve an annual surplus. To offset the cumulative deficit from January to September, an average monthly surplus of about $737 million is needed over the remaining three months. The largest monthly surplus this year was $596.6 million in June.
Last year, the tourism balance for the fourth quarter was a deficit of $3.1731 billion. If a similar deficit occurs this year, the annual deficit would be approximately $5.383 billion, about half of last year's deficit of $10.7604 billion.
Monthly tourism expenditures from October to December last year ranged from $2.7 billion to $3.2 billion. If overseas travel expenditures remain at similar levels this year, the increase in tourism revenue will determine whether the tourism balance improves in the fourth quarter.
An industry insider noted, "While the number of visitors to South Korea has reached an all-time high, there is still a lack of tourism content that encourages longer stays and increased spending. Expanding products that promote longer stays and repeat visits, such as regional festivals and nighttime tourism, is essential for increasing tourism revenue."
* This article has been translated by AI.
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