Report: Japan losing tourism battle with South Korea amid row

Oct 09, 2019

In terms of tourism-related revenue, Japan is faring far worse than South Korea from the repercussions of their deteriorating bilateral relations, according to a report released here on Oct. 7.

The number of South Koreans who visited Japan in July and August plummeted to 870,000, a year-on-year drop of 27 percent, according to the report by the Korea Economic Research Institute, an affiliate of the Federation of Korean Industries (FKI), the country’s most powerful business lobby.

The institute estimated that Japan’s revenue loss from that sharp decline totaled 31.5 billion yen ($294 million).

Specifically, the hotel industry in Japan lost 10.6 billion yen in revenue year on year over the period, the restaurant and service industry saw a decline of 9 billion yen, and the drop in the retail industry was 6.8 billion yen.

The reduced number of South Korean tourists also affected summer employment in Japan.

Overall, the number of Japanese working in the tourism industry fell by 2,589, compared with the same period last year. The retail industry shed 890 jobs, the restaurant and service industry let go of 887 workers, and the hotel industry reduced its work force by 588, according to the institute’s report.

Over the same two months, around 600,000 Japanese tourists traveled to South Korea, up 10 percent from the same period in 2018.

Despite the increase, the South Korean tourism industry suffered a setback estimated at 3.5 billion yen, mainly because of the drop in passengers for South Korean carriers’ routes to Japan, the report said.

When asked why the bilateral dispute did not negatively affect Japanese tourist numbers, an official with a South Korean tourism agency said Japanese are culturally less inclined than South Koreans to cancel their reservations.

However, the institute said a further strain in diplomatic relations could prompt Japanese tourists to stay away from South Korea.

“The South Korean economy would eventually suffer more if the number of Japanese tourists drops,” a senior official with the institute said.

The Japan-South Korea relationship has sunk to lows unseen in decades since a dispute over history spilled over to trade and security issues.

Source: Asahi Shimbun