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Japan-South Korea rift

Japan's ambitious tourism goal rocked by Asia geopolitics

South Korean visitors to Japan plunges nearly 60% in September

Traffic from South Korean visitors has dropped at several tourists spots in Japan, such as Osaka Castle. (Photo by Kento Awashima)

TOKYO -- Tensions with South Korea and the turmoil in Hong Kong are casting a shadow over Japan's goal of drawing an annual 40 million tourists by next year.

September figures released Wednesday showed a clear trend of South Koreans, long a mainstay of Japan's tourism industry, booking trips elsewhere.

Visitors from South Korea plummeted 58.1% from a year earlier, reflecting the frosty relations over history and trade. Only 201,200 South Koreans traveled to Japan last month, the Japan National Tourism Organization said. This follows a 48% decline in August.

Last month's drop-off is all the more glaring when considering the natural disasters that kept tourists away a year earlier. Typhoon Jebi flooded western Japan early that September, shutting down Kansai Airport near Osaka. An earthquake struck Hokkaido shortly afterward.

Lifting the number of annual visitors to 40 million has been a milestone for the nation, as it seeks to boost its stature as a tourism nation. In 2016, the government set out a goal of doubling annual visitors to 40 million by 2020 and increasing that further to 60 million by 2030.

Regions that count on South Korean tourism are feeling the bite. In the city of Fukuoka, the Beetle hydrofoil ferry service that connects to the South Korean city of Busan is suffering from a drastic downturn in traffic. Usership tanked 20% on the year in July, when bilateral tensions initially flared up after Tokyo announced restrictions on certain exports to South Korea. The decline reached 70% in September.

"There are absolutely no perceivable signs of recovery," said a representative at JR Kyushu Jet Ferry, which runs the hydrofoils.

JTB, Japan's largest travel agency, reports handling 80% fewer South Korean customers in September than a year earlier. Bookings for October and November are down by similar percentages, according to JTB.

South Koreans accounted for 24% of visitors in 2018, second only to Chinese tourists, who accounted for 27%.

At Kintetsu Department Store, a chain operating in the Osaka area, tax-free sales of items targeting South Korean tourists fell by about a quarter during the March-August period from a year earlier.

Japanese food exports to South Korea have struggled as well. Exports of food items and farm, forestry and fishery products shrank 36.9% year on year in August on a value basis, government data shows.

Beer exports nose-dived 92%, according to trade statistics. Exports from Sapporo Breweries' plant in Kyushu, Japan's far western region, took a hit, as did volume sales at a South Korean joint venture.

Adding to the concerns are the monthslong demonstrations taking place in Hong Kong. On the surface, Hong Kong tourism to Japan appears to have recovered in September from a drop a year earlier, rising 23.6% to 155,900.

Though the numbers represent the first growth in three months, the total falls short of the 190,000 average for the first eight months of the year.

Hong Kong is the largest market for Japanese food, farm, forestry and fishery exports. Agriculture and fishery exports fell 13.9% on the year in August. The slump was particularly pronounced for pearls.

Japan's strawberry exports to Hong Kong tumbled 27% on the year between January and August to 1.08 billion yen ($9.95 million). Grape exports fell 13% to 720 million yen.

"Ever since the demonstrations began in earnest in June, demand from Hong Kong has decreased dramatically, and it disappeared in October," said an intermediate wholesaler operating in Tokyo's Ota Ward.

The Japanese government aims for 1 trillion yen in total exports of food, farm, forestry and fishery products this year. But exports for the January-August period climbed just 2.4% to 588.8 billion yen.

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