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Economy

Chinese tourists return to South Korea as relations warm

Favorites Thailand and Vietnam see fewer faces from China in first half of 2019

A tourist wearing a traditional Korean costume poses for photographs at Gyeongbok Palace in central Seoul on February 11.   © Reuters

SINGAPORE -- Chinese travelers are choosing different destinations this year, with South Korea welcoming nearly 30% more from a year ago while once popular Southeast Asian countries experience significant drops, according to official government data.

Last year, Chinese made 149 million trips overseas, up 15% from 2017. Among the most popular destinations were Thailand with 10 million visitors, followed by Japan with 8.3 million, Vietnam with 4.9 million and South Korea with 4.7 million.

"Chinese have always been fond of destinations closer to home," according to a spokesperson at Shanghai-based online travel agent Ctrip.com International.

But this year is different.

South Korea saw Chinese arrivals rise 29% in the first half of 2019 from a year ago, according to the latest data released on July 23. The Korea Tourism Organization noted that the recent increase is due to "improved sentiment about South Korea."

Chinese tourists to the country peaked in 2016, but fell by nearly half the following year due to political tensions stemming from South Korea's deployment of America's THAAD anti-missile system. The number jumped 15% in 2018 and is increasing even more this year.

New flights, such as those linking Kunming in southern China with the South Korean resort island of Jeju, have also contributed to the growth, according to the KTO.

Japan also saw more Chinese visitors in the first half of 2019, with the figure up 12% from the previous year, according to data released by the Japan National Tourism Organization. In June, a monthly record of 880,700 visitors entered the country, due mainly to relaxed Chinese visa regulations that went into effect in January.

On the other hand, Chinese are avoiding what were previously their most popular Southeast Asian destinations.

Chinese travelers to Vietnam dropped 3% in the first half of 2019, compared with a 24% rise for all of 2018.

Tour operator and restaurant owner Tran Dang in Halong, a city on Vietnam's north coast, told the Nikkei Asian Review earlier this year that he is seeing far fewer Chinese customers. Last year, he served about 1,000 a day in the first quarter, while the figure this year has plummeted to around 300 to 500 a day.

Part of this can be attributed to neighboring Laos and Cambodia, both of which are promoting their own tourism. In addition, Vietnamese authorities are discouraging "zero-dollar" tours run by Chinese operators, which contribute little to local economies.

Tran said the situation is worsening as the Chinese economy slows and relations between China and Vietnam cool.

Thailand is also seeing less Chinese, with arrivals decreasing 5% in the first half of 2019. The country experienced a sharp drop-off after a July 2018 ferry accident in Phuket, which claimed a large number of Chinese lives.

Moreover, the strong Thai baht has discouraged foreign tourists in general.

For both Southeast Asian countries, Chinese account for about 30% of total inbound visitors, hence declining arrivals will weigh on their economies.

In the long-term, Chinese tourism will likely continue to expand, given the still low number of passport holders and that more airports are under construction. In the short-term, however, a weak Chinese economy in the April-June quarter -- which marked its lowest growth in three decades -- will weigh on Chinese outbound tourism.

Nikkei staff writers CK Tan in Shanghai and Kim Jaewon in Seoul contributed to this story.

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