Every traveler's bucket list includes a visit to South Korea. It is always one of the most sought-after and popular destinations around the world. The Korean tourism industry is driven by the cultural trend known as 'Hallyu,' or Korean wave. The trend began in popular media such as K-Pop artists performing on stage and TV dramas, and then spread to businesses such as cosmetics, food, and technology.
The promotion of Korean goods purchases in other countries has a high value. The Korean Wave is producing the Korean Wave effect, which is expanding across all industries. But the pandemic changed the way how tourism is expanding.
The pandemic toll on South Korea
The pandemic gave no remorse when it hit the world. South Korea, one of the leading nations in culture, economy, and entertainment too was hit adversely. The virus case was first reported on 20th January 2020.
With the rising cases, the government undertook several effective measures, which made South Korea one of the best nations in controlling the pandemic without having to impose nationwide lockdown.
By August 2020, the government had to impose upon several new stringent measures as the cases hiked up, leading to city-specific lockdowns, shutting down of markets, and mainly the closing of gates towards inbound tourism.
Graph provided by Wikipedia
The above graph depicts the number of cases between the period April 2020 and October 2021.
The nation which was developing at a fast pace in all spheres had to slow down its process. Inbound tourism was strictly regulated. The hospitality industry was a major component that led to the GDP growth of South Korea for the past few years. The Korean Hallyu is the major reason for this.
What would happen to a nation that depended a whole lot on its inbound tourist? What measures would they have undertaken to restore its economy?
Pandemic toll on tourism industry of South Korea
Graph provided by Statista.
The above graph depicts the gradual rise, the sudden hike, and the steep fall of inbound tourism in South Korea. From the year 2000, South Korea witnessed a steady rise in its tourism industry due to the effect of its Korean Hallyu. By 2018 and 2019 millions more were added to the tourism list. The sudden outbreak of corona is what led to the sudden decline.
According to the statistics provided by World Bank on tourist receipts, (International tourism receipts are expenditures by international inbound visitors, including payments to national carriers for international transport) a 34.54% increase in visitors was seen in the year 2018 followed by a 13.47% in the year 2019. From 1.5 million visitors in December 2019, it drastically reduced to a mere 61,000 by July 2020.
According to the Economic Impact Report (EIR), South Korea’s Travel & Tourism sector faced a major downfall due to Covid19. It wiped out $33.3 billion from the nation’s economy. The nation’s GDP fell from USD $73.2 billion (4.4%) in 2019, to USD$39.9 billion (2.4%).
Based on the above data, the top foreign tourists were from China (6,023,021), Japan (3,271,706), Taiwan (1,260,493), USA (1,044,038), Hong Kong (694,934), Vietnam (553,731), Philippines (503,864), Indonesia (278,575), and Singapore (246,142).
South Korea faced a damaging loss of 84,000 Travel & Tourism jobs across the country when flights shut down and tourists reduced.
The country's 1st and 2nd biggest airlines, Korean Air and Asiana Airlines had to cut down on several of their flights to and from nations with a high risk of covid19.
Several hotels faced a severe financial crisis as pre-booked rooms were canceled at the last minute. According to the Professional Hotel Management Association of Korea (2020), an estimated loss in hotel business due to room cancellation was 492.4 billion KRW.
This table depicts the conditions of top hotels across South Korea. All hotels except Incheon airport Transit hotel faced an 80% cut in their occupancy.
The overflowing visits to Jeju Island during the summer season (pre-pandemic period) was a relief to several small business and tourist owners. This too was crushed with the arrival of covid19.
How the country is pulling itself back together.
The impact that covid19 had on South Korea was similar to most nations across the globe. It was the timely measures and precautions taken by the government that led to a bit of relaxation within the citizens.
The government focused on moving quickly in implementing COVID-19 regulations and notifying the public with information and safety guidelines. Hence, internationally, South Korea became a top model for dealing with the virus.
Multiple health authorities came together in private labs to research the efficacy of contact tracing, rapid regulatory tests, and screening clinics. The country attempted several data tests and experiments on its citizens. In the process, South Korea discovered more about the actual SARS-CoV-2 and the prevention methods. Scientific and mechanical technology improved a lot due to this reason.
The Ministry of culture and Arts injected $82.24 million to provide unsecured loans to the adversely hit tourism industry.
The government planned to distribute vacation coupons of $160 each to 120,000 individuals’ domestic travelers. This would help kick-start tourism once again.
The government introduced a job retention scheme under which, Seoul unleashed massive subsidies by March 2020 to help companies from layoffs. Under pre-pandemic conditions, the companies themselves had to cover 65 to 75% of the subsidies. Now the government would cover 90% of the subsidies to prevent layoffs.
The major factor that is helping boost back the tourism industry is the entertainment field. Korean Hallyu as mentioned earlier is one major pillar that is holding up South Korea’s tourism. The Hallyu that has taken up the globe is Korea’s culture, music, and movies that is introduced via K-pop and K-drama.
Korean Wave is a term that came up in the year 1999. It refers to the phenomenon that young people are enthusiastic about Korean popular cultures such as Korean dramas and popular songs.
As of 2019, around 12.7 percent of respondents stated that they visited South Korea for K-pop and Hallyu experiences. In 2020, around 617 thousand visitors aged between 21 and 30 visited South Korea despite the pandemic conditions for the aforementioned reasons.
Graph provided by Statista.
The above graph shows the country-wise fans who visit South Korea because of the Korean Hallyu. Indonesia tops the list with 23.3% tourists.
With the whole globe becoming vaccinated, and borders opening up, South Korea is looking positively towards its entertainment industry to bring back the inbound tourist levels. Although government measures are being implemented and cross-nation initiatives are being undertaken, it is the Korean wave that will redeem the nation of its past tourist glory!
The future of the tourism industry in South Korea
Tourism is an essential part of many countries' economies, and the coronavirus pandemic’s immediate and widespread impact on the tourism industry is affecting the entire economy. As governments around the world take unprecedented precautions to contain the virus, restrictions on travel, company activity, and people-to-people connections have brought the tourism economy to a halt. Many countries are now embarking on a new phase in their war against the virus, as well as reopening their tourism sectors. This is a difficult and intricate task, and evaluating the economic impact on the tourism industry is challenging.
Tourism is one of the most directly affected sectors in this current crisis and this calls for immediate and long-term responses. Lifting travel restrictions and assisting firms in obtaining liquidity assistance, implementing new health guidelines for safe travel, and assisting in market diversifications.
With new safe and clean labels for the industry, tourist information applications, and domestic tourism promotion efforts, travelers' confidence is being restored and demand is being stimulated. To rehabilitate destinations, foster innovation and investment, and reimagine the tourism sector, comprehensive tourism recovery plans are being developed.
The desire for overseas travel, as well as the amount of information shared via mass media and social networking platforms, has aided the expansion of outbound tourism. Unfortunately, due to COVID-19, the years 2020-2021 have been difficult. The coronavirus pandemic ushered in an unprecedented crisis, and foreign travel restrictions have had a significant influence on the Korean travel industry.
References
The professional hotel management association of Korea
Thesis paper on Korea’s tourism sector by Gurung K.
World Bank
Investopedia
Korea herald