Chungnam Research Institute: "Reduced Consumption Due to Population Decline Offset by Attracting Tourists"

The Chungnam Research Institute proposed expanding the visitor economy centered on tourists as a measure to offset the regional economic contraction caused by population decline. The key point is that attracting 66 visitors per one resident lost can offset the reduced local consumption.

According to the Chungnam Research Institute (Visiting Senior Researcher Han Seok-ho and Researcher Kim Bo-ram) on the 11th, the total population of the Chungnam region increased by an average of 287 people annually from 2020 to 2022, whereas in the population-declining areas (9 cities and counties) announced by the Ministry of the Interior and Safety, the population decreased by an average of 843 people annually during the same period.

Provided by Chungnam Research Institute

Population decline leads to a decrease in local consumption, which affects the contraction of the regional economy. For example, the average local consumption per resident is 5.28 million KRW for the entire Chungnam region and 4.5 million KRW for the population-declining areas, making a decrease in consumption inevitable alongside population decline.

However, the Chungnam Research Institute analyzes that this situation can be offset by alternative consumption such as expanding the visitor economy. This means offsetting the reduced local consumption per resident due to population decline by attracting tourists and increasing their spending.

To replace the reduced local consumption expenditure caused by population decline with tourist attraction, the Chungnam Research Institute estimates that an average of 66.3 tourists?comprising 15.7 overnight travelers and 50.6 day-trippers?are needed per one person of the declining population annually.

Additionally, for the 9 cities and counties in the population-declining areas, it is analyzed that an average of 56.6 tourists (13.4 overnight and 43.2 day-trippers) visiting can be expected to have an offsetting effect.

Provided by Chungnam Research Institute

Dr. Han Seok-ho said, “Although the number of tourists needed to replace consumption due to population decline varies by region, it is gradually increasing every year. Considering this, cities and counties where the number of visitors continues to decrease need to prepare strategic policies to maximize the effect of tourism consumption substitution.”

He also suggested policy measures for attracting tourists, including ▲expanding infrastructure and specialized content to increase tourist inflow and consumption ▲planning strategies to activate nighttime tourism to extend tourists’ stay time ▲promoting plans for repeat visits and expanding relational populations.

In particular, Dr. Han emphasized, “Overnight tourists have a higher per capita consumption effect, so they would be more effective in increasing the population decline substitution effect per visitor.”