Seoul gains from Tokyo’s pain over Lunar New Year as politics reshapes China’s tourism map

For his family’s first overseas trip together, Tang Junjie carefully planned a holiday to Japan during China’s longest Lunar New Year break on record. Flights were booked months in advance by the 22-year-old from Sichuan province, who had already made three solo visits to the neighbouring country that has long been a draw for Chinese tourists. But a sudden deterioration in Sino-Japanese relations changed everything. “The original plan was to transit through Seoul on our way to Japan,” Tang said. “But the airline couldn’t refund the tickets at the time, so we decided to stay in Seoul and not continue on to Japan.” Tang and his family were among the influx of Chinese tourists who visited Korea during the holiday period, which began on February 15 and ended on Monday. Beijing and Tokyo have been embroiled in a diplomatic dispute since November, when Japanese Prime Minister Sanae Takaichi said that Tokyo could respond militarily to a potential attack on the island. In response, Beijing has advised citizens to avoid travelling to Japan. Beijing sees Taiwan as part of China to be reunited by force if necessary. Most countries, including the US, do not recognise Taiwan as an independent state, but Washington is opposed to any attempt to take the self-governed island by force and is committed to supplying it with weapons. South Korea’s Ministry of Culture, Sports and Tourism estimated that up to 190,000 Chinese tourists visited the country during the nine-day holiday period. The daily average was 44 per cent higher than during last year’s holiday window, which fell from January 24 to 29. The fresh wave of Chinese tourists brought rare optimism to South Korea’s retail and tourism sectors, which have been dampened by a consumption slowdown. In the weeks leading up to the holiday, retailers and tourism operators rolled out intensive marketing campaigns tailored to Chinese tourists, including discounts and gift vouchers linked to Chinese payment platforms such as Alipay and WeChat Pay. Chinese tourists have traditionally been big spenders, according to Korean tourism industry officials who pointed to the most recent data from culture authorities showing that the average spending per Chinese visitor to Korea reached US$1,622 in 2024, compared with the overall foreign visitor average of US$1,372. Even the Korean government has been pulling out all the stops to encourage more spending by Chinese group tourists. On February 15, Minister of Culture Chae Hwi-young visited one of Seoul’s main shopping and tourism districts, Myeong-dong, to inspect facilities for foreign visitors and called for efforts to foster a more welcoming atmosphere. The push appears to have paid off. This is my first time in Korea, and I was shocked by how many Chinese tourists were in Myeong-dong Wang Xinyue, Shandong province Korean retailer Lotte Department Store said its foreign customer sales rose 120 per cent from February 13 to 18 compared with the previous Lunar New Year holiday period. In particular, sales to Chinese customers – including from the mainland, Hong Kong, Macau and Taiwan – jumped 260 per cent. The 1,600-room Grand Hyatt Jeju, popular with Chinese tourists, said it recorded up to 1,590 room bookings per day during the holiday period, effectively reaching full occupancy. Paradise City, which operates Korea’s largest foreigners-only casino near Incheon International Airport, said room sales were strong thanks to online promotions targeting Chinese customers. Its average occupancy rate reached 95 per cent. “This is my first time in Korea, and I was shocked by how many Chinese tourists were in Myeong-dong – I hear Chinese everywhere,” said Wang Xinyue, who flew to Seoul with her friends from Shandong province. She said they were lured by shopping and beauty services such as dermatology treatments. And their hotel room, she said, was nearly 1,000 yuan (US$145) a night – about twice what it would have cost during a non-holiday period. Analysts said the recent resumption of high-level diplomacy between China and South Korea lowered barriers for Chinese travellers. A temporary visa waiver for Chinese group tourists of three or more people, introduced in September, was also said to have contributed. On February 9, South Korea’s ambassador to China predicted at a regular press briefing at the Korean embassy in Beijing that the number of mainland Chinese visitors to Korea would surpass 6 million this year, recovering to pre-pandemic levels. While South Korea is enjoying the momentum, behind the upbeat mood lies familiar anxiety. Business owners know the flows that buoy the economy can easily evaporate – a vulnerability South Korea has experienced before, and one that Japan is now facing. In 2016, the number of mainland Chinese tourists to South Korea peaked at 8.06 million before plunging in the aftermath of China’s protest of South Korea’s decision to host the US Terminal High Altitude Area Defence (THAAD) system. Chinese group tours to South Korea were halted in March 2017 and did not resume for more than six years. “Before THAAD, Chinese tourists were everywhere and came every day. But after the deployment, there were none,” said Ryan Huh, a restaurant owner in Seoul, recalling his days running a bakery on a street near Myeong-dong. Analysts said that the spending power of Chinese tourists had become a key variable in the global tourism market, backed by a population of 1.4 billion, and that it could also function as diplomatic leverage. Troy Stangarone, a non-resident fellow at the Carnegie Mellon Institute for Strategy & Technology, said that while tourism is a small part of the overall economies in Korea and Japan, using it as a geopolitical tool is effective because it affects a diverse range of individuals from hotels, restaurants and shops. “De-risking from China isn’t just necessary for critical industries,” Stangarone said.