The Bank of Korea: "Chinese Group Tourists to Raise South Korea's Growth Rate by 0.06%p This Year"

As China fully lifted the ban on group tours to Korea after 6 years and 5 months, raising expectations in the tourism industry, Chinese tourists arriving at Incheon Port International Passenger Terminal in Yeonsu-gu, Incheon, on the morning of the 12th, when international passenger ferry service between Korea and China resumed, are seen moving around.

The Bank of Korea forecasted that the allowance of group tours from China will have a positive effect of increasing South Korea's economic growth rate by 0.06 percentage points this year.

On the 24th, the Bank of Korea estimated in its report titled "Estimation of Economic Effects from Allowing Group Tours of Chinese Tourists" that "the number of Chinese arrivals is expected to reach about 2.2 million in the second half of this year and will increase significantly compared to this year in the next year."

According to the Bank of Korea, the number of Chinese outbound tourists recently recovered to about half of the 2019 level, and among major Asian countries, South Korea's recovery rate is lower than Singapore's but higher than that of Japan and Thailand.

In this situation, with the Chinese government allowing group tours to South Korea for its citizens for the first time in 6 years and 5 months since 2017 on the 10th, the recovery of Chinese tourists is expected to accelerate.

The Bank of Korea explained, "Considering that about 40% of all Chinese tourists before the suspension of group tours were group tourists and the geographical proximity between South Korea and China, the resumption of group tours is expected to have a considerable impact on the recovery of Chinese tourists visiting South Korea."

In fact, immediately after the Chinese government announced the resumption of group tours, major Chinese travel agencies launched group tour packages to South Korea, and positive signs have been detected such as cruise ship port calls in Jeju Island being fully booked until March next year.

Assuming that the number of Chinese tourists visiting South Korea increases at a rate similar to Singapore's, the number of Chinese arrivals is expected to reach about 2.2 million in the second half of this year and increase significantly next year compared to this year. The number of Chinese arrivals is expected to recover to about 85% by the fourth quarter of this year.

The Bank of Korea emphasized, "However, despite the clear recovery trend in Chinese outbound travel, downside factors such as sluggish domestic demand in China and lack of flight availability still exist," and added, "It is necessary to make multifaceted efforts to attract Chinese tourists so that the high demand for overseas travel among Chinese can actually lead to visits."