The government has decided to temporarily allow visa-free entry for Chinese group tourists in an effort to revitalize the tourism industry. This move is expected to provide new momentum for the Chinese tourism market, which has been slow to recover since the pandemic. There are also projections that the number of foreign tourists this year could surpass the all-time high of 17.5 million recorded in 2019.
To be implemented for approximately nine months starting September 29
The Ministry of Culture, Sports and Tourism and the Ministry of Justice finalized the plan on August 6, after consultations with relevant ministries, to allow visa-free entry for Chinese group tourists from September 29 of this year to June 30 of next year, for a period of about nine months. This measure will be implemented ahead of China's National Day holiday (October 1-7) and is expected to help boost foreign tourist demand during the peak season.
The government made this decision in light of the sluggish recovery of Chinese tourists, who make up the largest share of the inbound tourism market. Chinese tourists account for about 28% of all foreign visitors, but as of the first half of this year, the number of Chinese visitors to Korea stood at 2,526,841, still falling short of the pre-THAAD dispute peak of 8,067,722 in 2016.
In contrast, the total number of foreign tourists is rapidly increasing. According to the Korea Tourism Organization, the number of foreign tourists in the first half of this year reached 8,825,967, a 14.6% increase compared to the same period last year (7,701,407), and a 4.6% rise compared to the first half of 2019 (8,439,214), before the pandemic. With the peak tourism season in the second half of the year approaching, there is speculation that the annual number of visitors could exceed 20 million.
In a recent report, the Hyundai Research Institute projected that if the number of foreign tourists surpasses 20 million, the domestic consumption growth rate could increase by about 2.5 percentage points, highlighting the tourism industry's potential to drive domestic demand.
Beyond this short-term visa-free measure, the government also plans to focus its policy efforts on the long-term goal of attracting 30 million foreign tourists annually. Minister of Culture, Sports and Tourism Choi Hwiyeong recently stated, "We will usher in an era of a 300 trillion won K-culture market and 30 million foreign tourists."
Boosting local economies and domestic demand expected... Chinese economic slowdown poses a challenge
The government expects that the visa-free policy will have a positive impact not only on the tourism industry but also on local economies as a whole. An official from the Ministry of Culture, Sports and Tourism stated, "This measure will be a decisive turning point in the recovery of demand from Chinese group tourists," adding, "It will also have tangible effects on revitalizing local economies and boosting domestic demand."
The tourism industry also sees the visa exemption as an opportunity to further increase the number of Chinese tourists. However, some point out that the economic downturn in China could become a variable. While measures have been taken to make travel easier, there are concerns that the visa exemption may have limited effect if Chinese consumers' disposable income remains low.
An industry insider commented, "After the THAAD dispute, China continued to ban group tours to Korea until it was lifted in August 2023. At that time, the tourism sector had high expectations, but the actual increase in Chinese tourists was not as significant as hoped. Overseas travel ultimately depends on disposable income, and with the current economic situation in China being so poor, the impact may not be as great as anticipated."
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