Foreign tourists in Myeong-dong, Seoul. Yonhap News
Raising the economic performance of Korea’s tourism to Japan’s level requires more than simply increasing the number of visitors, according to an analysis. It calls for expanding length of stay and per-capita spending, with a particular recommendation to increase the share of high-value tourism such as medical and beauty services.
In a report titled “Growth Effects and Policy Direction of the Tourism Industry from a Services Export Perspective,” released on the 5th, the Bank of Korea (BOK) said, “The true economic performance of tourism can be fully realized only when visitor stays and spending expand, and that spending is converted into domestic industrial output and added value, beyond merely attracting inbound visitors.”
Since fully launching its tourism-entry policy in 2003, Japan has achieved both quantitative expansion and qualitative advancement of its tourism industry simultaneously. Last year, Japan’s ratio of tourism exports to gross domestic product (GDP) was 1.45%, exceeding Korea’s 1.17%. To catch up to Japan’s level, Korea must expand its tourism exports by more than 25%.
To achieve this, the BOK analyzed that Korea would need to increase the number of visitors by 4.81 million, from 18.94 million last year to 23.75 million, or raise the average daily spending per visitor by $45.2, from $177.8 to $223. The average length of stay would also need to increase by 1.7 days, from 6.5 days to 8.2 days, the report explained.
However, the BOK found that increasing the number of visitors, length of stay, and spending together is more effective than relying on a single variable. Even if the average length of stay remains at 6.5 days, Korea could reach Japan’s ratio of tourism exports to GDP by increasing the number of visitors by 2.26 million and raising the average daily spending per visitor by $21.3, according to the calculation.
The BOK also pointed out that changing the structure of tourist spending is important. If the share of spending on high-value industries such as medical and beauty services is raised from the current 17.2% to 35.0%, and the value-added rates of the lodging, aviation, and restaurant industries are improved by 10 percentage points, 5 percentage points, and 8 percentage points respectively, domestic value-added inducement is estimated to increase by about 420.4 billion won. This is equivalent to the effect of attracting an additional 320,000 visitors.
Jung Sun-young, head of the BOK’s Asia-Pacific Economy Team, said, “To achieve policy goals through visitor numbers alone, tourists equivalent to about half of our nation’s population would have to enter.” She added, “Physical burdens could arise, such as the issues raised over ‘overtourism.'”
AloJapan.com