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2018.08.28
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[Tourism and Leisure] Current Status and Prospects of Korea’s Tourism and Leisure Industry

The growth potential of Korea’s tourism industry in the rapidly changing international environment is where we need to put our focus on. The international tourism market started to pay attention to the Korean market after the liberalization of overseas trips in 1988. Moreover, following the 2002 World Cup hosted by Seoul and Tokyo, the Korean tourism market has been growing continuously. This article outlines the major trends of Korea’s inbound travel market, outbound travel market, domestic travel market and the future prospects of the overall Korean tourism market.


Status of Korea’s Tourism Market


As of 2016, the size of the inbound travel market was USD 17.2 billion, that of the outbound travel market was USD 23.7 billion, and that of the domestic travel market was USD 22.7 billion. Korea’s tourism market is rapidly growing due to the opening up of China’s tourism market and the rise in the number of low-cost carriers. The market showed a decline in 2017 due to the impact of the deployment of the THAAD system, but has been recovering since January 2018. In particular, the improved relationship between the two Koreas based on the inter-Korean Summit and the U.S.-North Korea Summit increased the prospects for peace, leading to the recovery of the Korean tourism market.

In regard to the inbound travel market, about 17.27 million people visited Korea in 2016, and the tourism income was about USD 17.2 billion. Per capita expenditure of foreign tourists was USD 1,000, and is continuously growing. In 2015, the average expenditure per person was about USD 1,141 thanks to the increased number of Chinese tourists. Later on, it showed decline, but is now back on the track to recovery.


Category 2015 2016 2017 2018.06
Number of Tourists (10,000 persons) 1,323 1,724 1,336 722
Tourist Income (USD mn) 15,091 17,199 13,323 6,306
Expenditure Per Capita (USD) 1,141 998 999 1,062

Source: Visitor arrival and Korean departure statistics from Ministry of Justice, Tourism balance of payments from the Bank of Korea, The Korea Tourism Knowledge & Information System (www.tour.go.kr)


About 8 million Chinese tourists visited Korea in 2016, but the number decreased to 4.17 million in 2017 due to the deployment of THAAD. As of 2017, 2.31 million tourists were from Japan, 940,000 from Taiwan, 870,000 from the U.S., and 1.58 million from the four Southeast Asian countries of Thailand, the Philippines, Vietnam and Malaysia. Along with the regional tourism market in China and Japan, the inbound travel market is implementing expansion to the Southeast Asian market (Thailand, the Philippines, Vietnam, Malaysia, Indonesia) through diversification policies of the inbound travel market, in order to secure market stability amidst the changing international environment.


Ranking 2015 2016 2017
Country Name No. Visitors Country Name No. Visitors Country Name No. Visitors
1 China 5,984 China 8,068 China 4,169
2 Japan 1,838 Japan 2,298 Japan 2,311
3 U.S. 768 U.S. 866 Taiwan 926
4 Hong Kong 523 Taiwan 833 U.S. 869
5 Taiwan 518 Hong Kong 651 Hong Kong 658
6 Philippines 404 Philippines 557 Thailand 499
7 Thailand 372 Thailand 470 Philippines 449
8 Malaysia 223 Malaysia 311 Vietnam 325
9 Indonesia 194 Indonesia 295 Malaysia 308
10 Russia 188 Vietnam 251 Russia 270

Source: Korea Tourism Organization, Nation overseas tourist’s major destination survey (May 2018)


The outbound travel market grew from 22.38 million tourists in 2016 to 26.5 million in 2017. In 2017, the market recorded the largest amount yet, of USD 27 billion. The growth of the average expenditure per capita traveling abroad has rather slowed, but those tourists are spending over USD 1,000 every year on overseas travel.


Category 2015 2016 2017 2018.06
Number of Tourists (10,000 Persons) 1,931 2,238 2,650 1,432
Tourist Income (USD mn) 21,528 23,688 27,073 12,161
Expenditure Per Capita (USD) 1,115 1,058 1,022 1,014

Source: Visitor arrival and Korean departure statistics from Ministry of Justice, Tourism balance of payments from the Bank of Korea, The Korea Tourism Knowledge & Information System (www.tour.go.kr)


The largest number of tourists visited Japan and China, the main travel destinations for Koreans, and more are now visiting Taiwan, Hong Kong, Thailand and Singapore thanks to low-cost airlines providing flights to such destinations taking less than 4 hours by flight. In 2016, due to a worsening relationship with China because of the deployment of THAAD, Korean tourists visiting Japan rapidly increased to 7.14 million, and those visiting Vietnam increased to 2.14 million.


Destination 2015 2016 2017
Rate of Change Rate of Change Rate of Change
Japan 4,002,095 45.3 5,090,302 27.2 7,140,165 40.3
China 4,444,400 6.3 4,762,200 7.2 N/A N/A
Taiwan 658,757 24.8 884,397 34.3 1,054,380 19.2
Hong Kong 1,243,293 -0.6 1,392,367 12.0 1,487,670 6.8
Thailand 1,372,989 23.0 1,464,218 6.6 1,709,070 16.7
Singapore 577,082 7.5 566,503 -1.8 631,297 11.4
Macao 554,144 -0.1 662,263 19.5 874,253 32.0
Philippines 1,339,678 14.0 1,475,081 10.1 1,607,821 9.0
Vietnam 1,152,349 38.3 1,543,883 34.0 2,415,245 56.4
U.S. 1,764,871 21.8 1,973,882 11.8 1,724,622 18.1

Source: Korea Tourism Organization, Nation overseas tourist’s major destination survey (May 2018)


As for the domestic travel market, the number of domestic tourists, number of trips, total cost and total number of travel days have been increasing constantly for the last three years. The number of trips and the total cost increased by 9.4 percent and 8.0 percent respectively, showing that the domestic travel market is growing. The demand and expenditure in the market is expected to increase continuously since the central and local governments are promoting various support policies for the growth of local tourism.

In terms of the number of visitors to the top 10 recreational leisure facilities in 2017, the number of visitors in 2017 was about 17.77 million, down from 18.39 million in 2016.


Rank Location Name of Facility 2016 2017
1 Yongin-si, Gyeonggi-do Everland 6,965,311 6,313,055
2 Gwacheon-si, Gyeonggi-do Seoul Grand Park 2,659,798 2,210,993
3 Dalseo-gu, Daegu E-World 1,809,974 1,924,722
4 Gwacheon-si, Gyeonggi-do Seoul Land 2,015,099 1,923,458
5 Yongin-si, Gyeonggi-do Caribbean Bay (Water Park) 1,429,035 1,382,751
6 Gyeongju-si, Gyeongbuk-do Gyeongju World 954,604 1,266,637
7 Goyang-si, Gyeonggi-do Goyang One Mount 862,837 978,490
8 Buyeo-gun, Chungnam-do Baekje Cultural Heritage Complex 689,271 606,519
9 Jangheung-gun, Jeonnam-do Jangheung Wood Land 477,081 598,656
10 Yesan-gun, Chungnam-do Resom Spa Castle (Chun Chun Hyang) 527,690 573,648
Total 18,390,700 17,778,929

Source: Korea Culture & Tourism Institute, No. of Visitors to Major Tour Sites (The Korea Tourism Knowledge & Information System)


Prospects of Korea’s Tourism Market


Recently, thanks to the improved relationship between the two Koreas, there have been positive signs for the recovery of the inbound travel market from China and Japan, as well as for the growth of the domestic tourism market in the short term. As of June 2018, the market is showing clear signs of recovery as compared to 2017.

In the mid to long term perspective, the inbound travel market from the world is also expected to grow thanks to the increased number of Chinese visitors stemming from an improved relationship with China as well as with North Korea. Furthermore, the establishment of the peace regime and the declaration to the end of war will place the Korean tourism market at a crucial turning point. The tourism cooperation project of the two Koreas is likely to resume, and the transcontinental railway project between China, Russia and the two Koreas is expected to be accelerated.

The Korean government and local governments are expanding financial support to revitalize regional airports and to expand tourist accommodation infrastructure as well as tourism contents. The inbound travel market is expected to receive more financial support to develop other tourism-focused cities in addition to Seoul, Busan and Jeju, and to foster various activities of regional tourism marketing organizations to attract overseas visitors.


By Hyojae Joun
Director, Tourism Industry Research Division
Korea Culture and Tourism Institute
hyojae.joun@gmail.com


< **The opinions expressed in this article are the author’s own and do not reflect the views of KOTRA >
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