[The Editors' Verdict] Should the Tourism Balance Deficit Always Be Seen as a Negative?

Korea Faces Persistent Tourism Balance Deficit
Calls Grow for Solutions as Overseas Travel Surges
Is the Deficit a Burden or an Investment in the Future?

Every autumn during the National Assembly audit season, the Korea Tourism Organization bows its head under the heavy responsibility of failing to resolve the chronic tourism balance deficit. Lawmakers issue stern orders to devise measures to attract foreign tourists and improve the tourism balance. Recently, voices have even been added suggesting that solutions for domestic demand recovery should be found through tourism, putting the Korea Tourism Organization in a difficult position ahead of the audit. Since the resignation of former President Kim Jang-sil in January, the president's seat has been vacant for eight months, making it an easy target for criticism.

The tourism balance deficit means that the amount of money spent by Koreans traveling abroad far exceeds the money spent by foreigners traveling to Korea. The Bank of Korea and the Korea Tourism Organization reported that the tourism balance deficit in the first half of this year reached $6.5 billion, the largest in six years since 2018. During this period, 14 million Koreans traveled abroad, which is 82% more than the 7.7 million foreign tourists who visited Korea.

The main reason for managing the tourism balance is its significant impact on the current account balance, which reflects Korea's economic strength. The tourism balance deficit in the first half accounted for more than half of the $11.9 billion service balance deficit. When exports falter due to factors like the semiconductor market downturn, the surplus in the goods balance shrinks, so if the service balance deficit, especially the tourism balance deficit, widens, the country's burden increases. The government expects the tourism balance deficit, which was $9.9 billion last year, to expand to $12.9 billion this year if the current trend continues.

It is clear that the tourism balance deficit falls within the realm of management. This is why the Korea Tourism Organization must make relentless efforts to reduce the deficit through effective foreign tourist attraction projects.

However, we need to reconsider whether the deficit itself should always be viewed negatively. It can also be seen as an investment in the future of the Korean economy.

The current expansion of the tourism balance deficit has been caused by the explosive demand for overseas travel among Koreans. This became possible as per capita income increased, securing leisure time and disposable income. Moreover, the value of the Japanese yen, a country Korea has long benchmarked economically and industrially, has declined, making short trips during brief holidays easier. This means Koreans can freely enjoy opportunities to experience other countries and broaden their horizons without significant economic burden.

The fact that Koreans take many overseas trips to gain new and diverse experiences is a positive factor in terms of future competitiveness. Broadening the scope of knowledge and exchange can be linked to industrial development. In fact, nowadays, university students consider 'gaining experience' as the main purpose of overseas travel. A recent survey conducted on 1,000 university students through a university life platform found that 74% responded that 'overseas travel is essential,' and 45% cited 'gaining experience' as the primary purpose of overseas travel.

Japan, once considered the wealthiest and most advanced industrial country in Asia, faces the problem of young people avoiding overseas travel. Although air routes are increasingly connected year by year, only about 23% of Japanese hold passports, compared to 40% of Koreans. The gap widens further when compared to Western developed countries such as the United States (42%), the United Kingdom (75%), and Canada (66%). The low overseas travel rate among young Japanese has even led to internal evaluations that this reflects the reality of a younger generation unwilling to observe and learn.