Updated: August 18, 2017
Following escalating tensions over the U.S.-North Korea missile test, General Joe Dunford, chairman of the U.S. Joint Chiefs of Staff, announced at a news conference on Aug. 14 that the U.S. was working with South Korea to test the THAAD system. before the peninsula is fully operational.
As Secretary of Defense Jim Mattis and Secretary of State Rex Tillerson highlighted in a joint op-ed in The Wall Street Journal, South Korea’s cooperation in pushing for the deployment of THAAD is seen as critical to the U.S. securing the Korean peninsula Denuclearization is strategically important August 13.
Meanwhile, South Korean tour groups are still not available for purchase in the Chinese market. However, Chinese online travel agencies such as Ctrip and Fliggy have once again started selling air tickets and hotel rooms in South Korea.
While basic travel products can now be purchased, tour bookings and other travel arrangements are still unavailable. For example, cruise lines sold in China have replaced South Korean calls with Japanese ports or Hong Kong.
For potential travelers who purchase travel products through China’s numerous online and offline agencies, South Korea’s travel options are hidden and must be actively searched for, rather than discovered and promoted with other destinations.
For Chinese mass-market tourists, South Korea remains an option until the quasi-travel ban is lifted. With the extra hassle of planning and purchasing itinerary items and trips without the help of a travel agency, independent Korean travel is possible for the more independent Chinese traveler.
After months of fiery rhetoric from China over South Korea’s intention to deploy the U.S. THAAD anti-ballistic missile defense system, the deployment has now begun, with China swiftly retaliating against South Korea with a travel ban. The ban could have dire consequences for South Korea’s tourism and retail sectors, but it also has a shock to the entire region – many countries, like South Korea, have seen large numbers of Chinese tourists recalibrating tourism and retail. direction. This could even lead to the first drop in overall Chinese outbound travel.
What is Sade?
The Terminal High Altitude Area Defense (THAAD) is an anti-ballistic missile system designed by the United States to detect and intercept incoming ballistic missiles, and in the case of South Korea, it is designed to protect the country from a potential North Korean attack. The system has been deployed at various locations in the United States and Guam, and an agreement has also been signed to sell it to Gulf states.
The deployment of THAAD in South Korea has been underway for months, and negotiations have begun under the Obama administration. North Korea’s escalating rhetoric and increasing missile tests in 2016 accelerated the potential deployment, and an agreement to deploy the system was reached in July 2016.
What role does Rakuten play in all this?
One of South Korea’s proposed deployment sites is on a golf course owned by South Korean conglomerate Lotte, which has invested heavily in China and operates a number of businesses in South Korea that cater to Chinese tourists. Lotte was awarded a land-swap deal that would see it give up its golf course in exchange for another piece of land, which received final approval earlier this month. As the only South Korean company directly linked to the deployment of THAAD in South Korea, Lotte has been heavily criticized in the Chinese media and has also faced business-related issues in China after its ties to THAAD were revealed. Potential land exchange.
How did THAAD lead to a decline in South Korean tourism?
The China National Tourism Administration, the government agency in charge of Chinese tourism, has banned online and offline travel agencies from selling South Korean tours. The ban affects all types of Chinese travel to South Korea, namely group travel, individual travel and cruise ships. Some analysts predict that this will lead to a drop of as much as 70% in Chinese tourist arrivals.
In addition to banning travel agencies from selling South Korean-related products, the Chinese government has instructed Chinese airlines to reduce the number of round-trip flights between China and South Korea. Korean Air has also started reducing the number of flights between the two countries. Cruise ship operators such as Carnival Corp and Royal Caribbean have also canceled their Chinese cruises at ports in South Korea, citing “the latest developments in the situation in South Korea” as the reason for the cancellations. Some port calls in South Korea have been replaced by new port calls in Japan.
What does this mean for South Korea?
South Korea has become a big beneficiary of the growth in Chinese tourism globally, and its popularity of pop culture in China and its location with the country make it one of the most important destinations for Chinese tourists. In 2016, it was the second most visited international destination by Chinese tourists (excluding Hong Kong and Macau). As a result, Chinese tourists dominate South Korea’s tourism industry, accounting for almost half of all foreign tourists in South Korea in recent years.
Due to the importance of Chinese tourists to South Korea’s tourism industry, a large part of the big tourism industry will be affected by the recent travel ban. South Korean tourism businesses that cater exclusively to Chinese tourists will be particularly affected by the ban, especially those that serve Chinese tour groups – which will now be reduced to zero. Jeju Island, a popular South Korean destination for Chinese tourists, has launched a separate visa-on-arrival program for Chinese tourists, which will lose most of its tourists.
In addition to the traditional travel business, retail companies have also been hit hard in the stock market by the travel ban, as the number of Chinese customers in South Korean retail stores will be significantly reduced. For travel retail, the ban is even worse for the bottom line: According to the Korea Herald, Chinese customers account for 70% of the annual revenue of duty-free shops in South Korea.
Will Chinese independent tourists still visit South Korea?
While Chinese independent travelers can technically visit South Korea as before, Chinese travel agencies can no longer sell anything related to South Korea travel — whether it’s air tickets, hotel reservations or visa arrangements. Instead, Chinese independent travelers will have to use non-Chinese channels to arrange their trips to South Korea, which is more difficult for ordinary independent travelers. A reduction in the number of flights operating between the two countries also limits options, with cruise travel completely non-existent. The publicity and negative social stigma associated with leisure travel in South Korea is now also deterring would-be independent travelers. In South Korea, the visa policy remains unchanged, and Chinese citizens with correct travel documents are not barred from entering the country.
Chinese online travel agencies have taken all South Korea-related travel products offline and cannot make reservations. (Screenshot/Ctrip.com)
What will South Korea do now?
As the THAAD conflict unfolds, South Korea has also been implicated in the recent impeachment of former President Park Geun-hye. The country will hold a presidential election on May 9, and the deployment of THAAD and Chinese retaliation are likely to be hot issues during the campaign. The election could help recalibrate South Korea’s relationship with China and tourism ties between the two countries.
Even before China imposed the travel ban, the Korea Tourism Organization, the Korea Tourism Organization, was working to keep the country’s tourism industry away from China. Under the current circumstances, these efforts may be accelerated. South Korean tourism officials could also take the opportunity to look at the example of Taiwan, which faced tourism retaliation from China after the election of the independence-leaning Democratic Progressive Party presidential candidate Tsai Ing-wen. Despite a sharp drop in arrivals from mainland China, Taiwan broke a new record in total arrivals in 2016, driven by growth in arrivals from Japan, South Korea and Southeast Asian countries. Even if the travel ban is lifted, China’s retaliation against Thaad shows South Korea that diversifying its tourism industry is critical to future stability.
What does this mean for the rest of Asia?
As Beijing Travel previously reported, the sudden and sharp reduction in Chinese travel to South Korea could pose a threat to the overall growth of Chinese travel in 2017, but could also provide an opportunity for other countries in the region to displace South Korea on Chinese tourists’ itineraries. Japan has already taken in some Chinese cruises originally bound for South Korea, and the cancelled flights are likely to resume on other short-haul routes, namely between China and other Asian destinations.
China’s sudden travel ban also sends a strong message to countries in the region, which share a similar, predominantly Chinese travel mix to South Korea. Chinese tourism, while lucrative and a source of double-digit growth in tourism, also provides China with a huge leverage that China can use as a carrot, whether in Taiwan in 2016 or South Korea in 2017 and sticks to reach the goal. its political goals. While many countries in the region are busy preparing for the growing number of Chinese tourists, contingency planning for a possible sudden drop in Chinese tourists is also starting to seem like a priority.
