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Week 35


Japan’s Korea tourism fallout widens

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August 30th 2019

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Japan has 8% decline in visitors from Korea. Read More »

Korean visitors to Japan decreased 7.6% in July compared with a year earlier, an indication of the overall impact of the strain in Korea-Japan relations. Korea had been Japan’s largest source of visitors until mainland China growth supplanted Korea.

A political spat has carried over to Korean social life, with Koreans boycotting Japanese goods and popular trips to Japan. About one-third of Korean visitors are in Japan for less than three days.

The decline in Korean visitors to Japan started earlier in the year before the political spat. This raised worries Koreans had grown tired of Japan and were seeking new destinations, such as Vietnam. The rising yen may have been a factor in the trend. The yen and a sense of over-travelling to Japan also may be the cause of Japan seeing fewer visitors in two other key markets, Taiwan and Hong Kong.

Despite these challenges, Japan overall recorded 5.6% growth in total visitors, led by mainland China.

Flights have been reduced and down-gauged between Japan and Korea. Initially services mostly affected were tertiary and secondary cities. But now reduced capacity is present on trunk routes, with even Tokyo-Seoul seeing fewer flights from Korean LCCs. This week, Peach Aviation extended Korean cancellations into 2020. But overall Japanese carriers see limited impacts. They have a smaller share of capacity and the full-service airlines mostly fly Japanese passengers, who are not impacted by the dispute. There is growing outbound Japan demand as a result of the yen’s greater purchasing strength.

Kansai airport expects 82 fewer flights to Korea or about a 20% drop. Five Korean travel agencies in Osaka reported a 20%-80% decrease in visitors in August, with deeper contractions forecast from next month. Osaka Tourism Bureau expects a total annual decrease of up to 30%.

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