Business

South Korean tourists shun Japan over trade row

Reuters, Bloomberg

The number of South Korean tourists visiting Japan fell last month to its lowest in nearly a year as visitors canceled travel plans amid deteriorating relations between the neighbors, Japanese government data showed on Wednesday.

Tourist arrivals from South Korea dropped 7.6 percent in July from the corresponding month a year earlier, to stand at 561,700, the Japan National Tourism Organization said.

That was the lowest figure since September, when flooding from a typhoon closed Kansai airport and a strong earthquake struck Hokkaido, providing the latest evidence of fraying ties.

The tourism agency pointed to a sluggish South Korean economy and the state of relations between the two countries as reasons for the decline in travelers. More South Koreans have been traveling to China and Vietnam, the government agency said in a release Wednesday.

South Koreans are also boycotting Japanese products, from Asahi beer to Uniqlo clothing, to protest Tokyo’s decision in early July to set curbs on exports of key high-tech materials to the country.

“A lot of Korean tour groups are canceling trips to Japan,” said Hiroshi Tabata, commissioner of the Japan Tourism Agency.

“We are watching the situation closely,” he added.

Japan cited security reasons for the export curbs, but Seoul regards them as retaliation after South Korean court rulings last year ordered Japanese firms to compensate wartime forced laborers. Tokyo says the issue was settled by past agreements.

The row has escalated, with both countries removing each other this month from favored-nation trading lists.

With the consumer boycotts sparking travel cancellations, carriers such as Korean Air and Asiana Airlines have started to cut flights and suspend routes to Japan.

While Tabata said Japan’s target of receiving 40 million overseas tourists by 2020 was intact his agency plans to ramp up efforts to win back tourists from South Korea, which has played a key role in the industry’s growth.

Last year, 7.5 million South Korean tourists visited Japan, making up 24 percent of a total figure of 31.2 million — second only to travelers from mainland China.

“We are preparing plans to increase the number of South Korean tourists by working with airlines and travel agencies,” Tabata said.

Overall tourist arrivals from across the globe rose 5.6 percent in July, the data showed, boosted by an almost 20 percent jump in visitors from China. For the year to date, the overall arrivals from overseas have reached 19.6 million.

“We’re seeing an impact” from Korea, said Takeshi Nishii, co-chief operating officer of Pan Pacific International Holdings Co., which runs Don Quijote discount stores. “In Fukuoka, Kansai, around here — there’s the chance there could be a pronounced impact.”

He added that Don Quijote is seeing strong business from visitors from other countries; about 10 percent of the chain’s sales are tax-free purchases.

Many Japanese beauty companies and retailers also net a portion of domestic revenue from duty-free sales — a rough gauge of tourist purchases. Those include department stores and makeup brands such as Shiseido Co. In 2018, Korean tourists in Japan spent about ¥584 billion ($5.5 billion), with most of it going toward lodging and shopping, according to the Japan Tourism Agency.

The travel boycott has been notable this summer, with the number of new reservations for tours into Japan dropping 30 percent and 70 percent in July and August, respectively, compared with a year earlier, according to Hana Tour Service Inc., a major Korean tour agency. Another, Modetour Network Inc., said there had effectively been no new reservations for Japan in August.

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