Seoul gains from Tokyo’s pain over Lunar New Year

Alipay banners are displayed in central Seoul's Myeong-dong, Friday, in cooperation with the Korea Tourism Organization. Korea Times photo by Alice Li

HONG KONG/SEOUL — For his family’s first overseas trip together, Tang Junjie carefully planned a holiday in 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 nearby 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 Feb. 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 Taiwan. In response, Beijing has advised citizens to avoid traveling to Japan.

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 percent higher than during last year’s holiday window, which ran from Jan. 24 to 29.

The fresh wave of Chinese tourists brought rare optimism to 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.

Minister of Culture, Sports and Tourism Chae Hwi-young, left, speaks to a Chinese traveler in Myeong-dong, Seoul, Feb. 15. Yonhap

Chinese tourists have traditionally been big spenders, according to Korean tourism industry officials. The most recent government data shows that the average spending per Chinese visitor to Korea reached $1,622 in 2024, compared with the overall foreign visitor average of $1,372.

Even the Korean government has been pulling out all the stops to encourage more spending by Chinese group tourists. On Feb. 15, Minister of Culture, Sports and Tourism Chae Hwi-young visited Myeong-dong, one of Seoul’s main shopping and tourism districts, to inspect facilities for foreign visitors, and called for efforts to foster a more welcoming atmosphere.

The push appears to have paid off.

Lotte Department Store said its foreign customer sales rose 120 percent from Feb. 13 to 18 compared with the previous Lunar New Year holiday period. In particular, sales to Chinese customers — including from the mainland, Hong Kong, Macao and Taiwan — jumped 260 percent.

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 foreign-only casino near Incheon International Airport, said room sales were strong thanks to online promotions targeting Chinese customers. Its average occupancy rate reached 95 percent.

“This is my first time in Korea, and I was shocked by how many Chinese tourists are 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 ($145) a night — about twice what it would have cost during a non-holiday period.

A Chinese tour group visits Gyeongbok Palace in Seoul, Feb. 17. Yonhap

Analysts said the recent resumption of high-level diplomacy between China and Korea lowered barriers for Chinese travelers. A temporary visa waiver for Chinese group tourists of three or more people, introduced in September, was also said to have contributed.

On Feb. 9, Korea’s ambassador to China predicted during 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 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 Korea has experienced before, and one that Japan is now facing.

In 2016, the number of mainland Chinese tourists to Korea peaked at 8.06 million before plunging in the aftermath of China’s protest of Korea’s decision to host a U.S. Terminal High Altitude Area Defense (THAAD) system. Chinese group tours to 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.

Alice Li is a reporter with the South China Morning Post. She is currently based in Seoul, writing for both The Korea Times and the South China Morning Post under an exchange program.