This photo shows crowds at Incheon International Airport on May 4. (Yonhap News Agency)
South Korea’s tourism trade deficit widened to a three-year high in the first quarter of 2023, as the number of South Koreans traveling abroad surged as COVID-19 restrictions eased.
The country posted a tourism trade deficit of $3.23 billion in the first three months of this year, with tourism receipts of $3.08 billion and expenditures of $6.32 billion, according to data released by the Bank of Korea on Tuesday.
The figure was the highest since the third quarter of 2019 when it was $3.28 billion. In the first quarter of any year, it was the largest deficit in five years since a deficit of $5.31 billion was recorded in 2018.
Data show that with the lifting of relevant restrictive measures, South Korea’s tourism trade deficit has returned to pre-epidemic levels.
The quarterly travel deficit hit $2.93 billion in the fourth quarter of 2019, fell to $1.99 billion in the first quarter and $920 million in the second quarter of the following year. The drop came amid travel bans and border closures around the world in response to the COVID-19 pandemic.
Much of the worsening deficit in the first quarter was due to increased travel by South Koreans for purposes other than overseas education and training.
The deficit in overseas education and training rose 5.2% month-on-month to US$650 million, while the deficit in tourism expanded 46.8% to US$2.58 billion.
More and more Koreans are leaving overseas for leisure travel.
South Korea saw 4.98 million outbound tourists in the first quarter, an 11-fold increase from 410,000 in the same period in 2022, according to the Bank of Korea.
However, the number of South Korean inbound tourists has grown slowly because group tourists from China, which account for a major part of the local tourism industry, have not yet fully returned to South Korea.
Although China reopened its borders in January following the end of a zero-COVID policy era of tighter restrictions, overseas tourism has been slow to recover. The Chinese government has not yet allowed group tourism to South Korea.
According to the Korea Tourism Organization, 105,967 Chinese tourists visited South Korea in April. While this marks a sharp increase from January’s 24,946 visits, the figure is still low compared with 2019, when Chinese tourists averaged around 400,000 visits per month in South Korea.
Compared with the same month in 2019 before the pandemic, foreign tourist arrivals in South Korea recovered 55% in April, while Chinese tourists only recovered 24%.
The deterioration in the travel balance has been affecting South Korea’s overall economy.
South Korea’s current account balance in the first three months of 2023 is in deficit for the first time in 11 years. Behind the deficit was slowing exports, a slump in the global chip industry and a $1.9 billion deficit in the services account, driven by a drop in the country’s travel balance.
The Hyundai Institute called for measures to encourage a recovery in tourism, suggesting that the full-year tourism deficit will worsen.
“A worsening service account deficit could lead to a decline in the trade account balance this year,” the institute said in a report released in April.
By Im Eun-byel (firstname.lastname@example.org)