By Lee Hyo-sik
Staff Reporter
The number of South Korean travelers heading overseas has surged over the past few years in line with the strengthening won against the dollar and other currencies. But the number of foreign visitors to Korea has stagnated, worsening the country's travel account balance.
According to Hyundai Research Institute Sunday, Korea's travel account deficit was equivalent to 0.71 percent of its gross domestic product (GDP) in 2006, the fourth highest among major economies in the world. Germany ranked first as its travel account deficit accounted for 1.5 percent of its GDP, followed by Britain with 1.2 percent and Russia with 1.1 percent.
The nation's travel account shortfall stood at $13.1 billion in 2006 and reached $15.1 billion last year as a growing number of locals continued to travel overseas. In 2007, 13.65 million Koreans went to foreign countries, while 6.45 million foreigners visited Korea.
But the deficit has shown a downward curve since the beginning of the year as the local currency has lost ground against the greenback, making it more expensive for locals to go overseas.
``The snowballing travel account shortfall is attributable to the country's failure to attract more foreign tourists. But the bigger problem is that more and more Koreans are heading abroad for better leisure and other services at cheaper prices than here,'' the institute said in a report.
It also pointed out that high taxes and heavy regulation have made it difficult for tourism and other service sectors to become more internationally competitive and provide better services at more affordable prices.
``It costs an average of 860,000 won for four people to play golf here. But the price drops to 540,000 won in China and 320,000 won in the Philippines. The story is not much different for hotel rates,'' the institute noted.
It suggested that to draw Koreans to stay here and spend money, the country constructs large-scale theme parks, like those in Hong Kong and Las Vegas, where visitors can enjoy a range of leisure services, as well as set up shopping centers at tourist spots.
``The government should ease regulations and provide tax breaks to help the service industry emerge as the next growth engine. We also need to launch a worldwide campaign to attract more foreign tourists,'' it stressed.
The Ministry of Strategy and Finance is preparing a comprehensive package of measures later this month, aimed at strengthening the competitiveness of the country's service industry to boost domestic demand amid an economic slowdown.