"No Money and Fear of Earthquakes... This Place Rises as a Summer Vacation Alternative to Japan"

Demand for Travel to Japan Drops Amid July Megaquake Rumors
Economic Downturn Spurs Shift to Domestic Destinations
European Travel Remains Strong Despite Record-Breaking Heat

"Since it was our first overseas trip with our child, we canceled it out of an abundance of caution."

Kim Hyungwoo, a 39-year-old office worker, canceled his planned trip to Japan this summer. His anxiety increased due to the recent rumors of a major earthquake in July and a series of small earthquakes. Kim said, "It was going to be our first trip abroad with our two-year-old, so we had already bought tickets to Hokkaido, which is relatively close and cool. Although the region mentioned in the news was some distance away, and I wasn't overly worried, I decided to change our plans to a staycation in Seoul with my wife, just in case."

Recently, more than 1,300 small earthquakes were recorded over two weeks in the Tokara Islands of Kagoshima Prefecture in southern Kyushu, Japan. As the "July Japan megaquake rumor" spreads, demand for travel to Japan among Korean tourists ahead of the summer holiday season is slowing. Growing anxiety about Japan, which is the number one overseas destination for Koreans, is leading some to consider switching to domestic travel, which is perceived as safer.

According to the travel industry on July 9, demand for package tours to Japan through Hana Tour in June decreased by 12% compared to the same period last year. Changes are also being observed in demand for the summer holiday peak season from this month through next month. Analysis of Kyowon Tour's booking data for the "late July to early August" (July 25 to August 3) period shows that the proportion of bookings for Japan was 8.6%, down 8 percentage points from 16.6% during the same period last year.

Rumors of a major earthquake in Japan have been spreading on social networking services (SNS), and actual small earthquakes have been observed, leading to changes in Korean consumers' demand for travel to Japan. A Hana Tour official explained, "For Japan, bookings usually concentrate close to the departure date, but recently, new bookings are falling short of expectations due to the megaquake rumors. Airline special promotions are also focused on Japan." However, the official added, "Cancellations of existing bookings are limited, but there is a noticeable slowdown in new bookings."

The recent decline in demand for travel to Japan is attributed not only to psychological factors related to the earthquake rumors, but also to an overall decrease in demand due to economic stagnation. The Japanese yen has strengthened compared to last year, increasing the burden of travel costs such as local accommodation. In addition, the implementation of visa-free travel to China is diverting some demand. In fact, Hana Tour's package tour demand in June this year decreased by 15% for Southeast Asia and 7% for Europe compared to last year. In contrast, demand for China, which adopted a visa-free policy, increased by 26%.

With the decline in popularity of travel to Japan due to earthquake rumors and other factors, some predict that the domestic tourism industry could benefit. The number of people choosing domestic travel, which is considered safer and more predictable, is expected to increase. A Nol Universe official said, "Consumer support policies such as the 'Accommodation Sale Festa' led by the government and local governments during the summer holiday season are providing practical help for those choosing domestic travel. Accordingly, we expect demand for domestic travel to gain further momentum this summer." This trend is seen as a result of not only risks associated with overseas travel, but also the ongoing economic downturn, high inflation, and prolonged high exchange rates.

In addition to Korean travelers, demand from foreign tourists who had planned to visit Japan could also shift to Korea. For example, Greater Bay Airlines of Hong Kong will suspend its regular flights to small Japanese cities starting September 1. This reduction in direct flights to Japan could shift demand to alternative destinations nearby. A Mode Tour official said, "The inbound market is highly sensitive to various factors, so it is difficult to make hasty predictions, but it is quite possible that some foreign travelers will put their plans to visit Japan on hold due to the recent earthquake issues and consider Korea as an alternative destination."

The number of people turning to neighboring countries other than Japan is also increasing, with Mongolia showing a marked rise. According to Kyowon Tour, Mongolia accounted for 18.3% of all bookings for the peak holiday season from July 25 to August 3, ranking first. A Kyowon Tour official explained, "This is the first time Mongolia has ranked as the top preferred destination. Mongolia's cool average temperatures even in midsummer are a major advantage, and the increase in low-cost carrier (LCC) flights from major regional airports to Mongolia has greatly improved accessibility for travelers outside the capital region." In addition, bookings for China continue to increase thanks to the visa-free policy.

However, there has been no significant change in demand for travel to Europe, despite record-breaking heat waves causing damage across the region. According to Mode Tour, the daily rate of change in bookings for Europe since June has remained below 3%, showing no meaningful change in overall demand. A Mode Tour official explained, "High temperatures in some parts of Europe, including France, are a recurring weather issue every summer, and there has been no significant change in demand for travel to Europe compared to the same period last year."

In fact, the industry reports that overall demand and inquiries for travel to Europe are on the rise. Last year, demand was severely dampened by soaring airfares and accommodation costs, travel restrictions, and road controls ahead of the Paris Olympics. This year, with such restrictions lifted, demand is clearly recovering, especially for Western and Eastern Europe. With airfares for the Chuseok holiday, which is considered a golden holiday, rising sharply, demand for long-haul travel during the relatively cheaper summer holiday season is expected to increase.

A Hana Tour official explained, "Europe is a region where factors such as exchange rates and weather have little impact. Most airline seats are filled without difficulty, so fluctuations in travel demand are not significant. Even for the Chuseok holiday, advance booking rates for Europe are already high." Mode Tour also predicted, "In the second half of the year, demand is expected to gradually increase due to the expansion of airline seat supply."