Issue #164: South Korea & Taiwan Tackle Tourism Deficits
More resident exits than inbound arrivals is causing tricky economic decisions.
Welcome to Issue 164 of Asia Travel Re:Set.
After WTM, my conference year is completed - and it’s time to start planning for 2025.
It will be a fascinating year for travel and tourism in Asia Pacific. Visitor economies will be challenged by a transition from recovery to growth, while further reshaping and realigning… and confronting swirling geo-economic winds.
Plus, next year I’ll have a new book coming out. The Return of Chinese Outbound Tourism: Changes & Experiences in the Post-Pandemic Era is co-written with Prof. Wolfgang Arlt of COTRI, and will be published by Routledge in Fall 2025.
It’s kind of a follow-up to my 2014 book, The New Chinese Traveler: Business Opportunities from the Chinese Travel Revolution - and my 2nd collaboration with Wolfgang following 2023’s China Outbound Tourism Handbook: 88 Practical Ways to Prepare for the New Wave of Chinese Visitors.
Before that, starting next week, I’ll round up 2024 with 3 themed issues to reflect on the key trends and developments of the year, and look ahead to the Year of the Snake.
Thanks for checking in.
What Does 2025 Have In Store For The Aviation Industry?
I’m looking forward to joining regular hosts John Grant and Deirdre Fulton plus Rebecca Francosky of Hartsfield-Jackson Atlanta International Airport for the final OAG webinar of 2024. Titled Endings & Beginnings: What Does 2025 Have In Store For The Aviation Industry?, our annual round-up will reflect on key industry developments in 2024, and the hot topics to watch out for next year, including:
Will engine trouble persist? And who continues to be affected?
How is capacity panning out for the rest of the winter season?
Which regions saw most growth in 2024, and what is to come?
Join us live on Wednesday 4 December, 3pm (GMT). More details HERE.
Chinese Tourists Return to Global Markets
“Europe faces challenges in attracting Chinese tourists due to limited direct flights and complex Schengen visa requirements, making short-notice travel difficult. In contrast, destinations like Turkiye and Serbia benefit from more lenient visa policies, making it easier to attract Chinese travellers.” 2024 has been an intriguing year for Chinese outbound tourism, which continues to rebuild and reshape. Thanks to Mingjie Wang for including some of my comments, alongside Emanuel Lehner-Telic (Austria Tourism) and Patricia Yates (VisitBritain), in this piece for The Independent.
South Korea & Taiwan Tackle Tourism Deficits
How do destinations strategise their visitor economy when the volume of residents heading overseas exceeds the number of inbound visitors? And how does a travel deficit influence factors like airline scheduling and visa entry policy?
Tourism deficits are not new, but their impacts are highlighted in competitive regional markets, such as Asia Pacific. Moreover, they are gaining heightened attention with tourism being viewed throughout the region as a means of financial stimulus after the economic distortions caused by long pandemic border closures.
There are 2 types of tourism deficit. The first is most likely to occur in nations with a high GDP per capita, where the propensity to travel outbound is high, flight connectivity is strong and inbound travel is comparatively expensive. Hence, a larger volume of resident exits versus inbound visitors is the most pronounced form because of the import-export imbalance that filters into the broader national economy.
In the first half of 2024, South Korea recorded a 6-year-high travel deficit of $6.48 billion. South Korean media is ruminating that this deficit could widen now that China has granted visa-free access for Korean citizens. Close proximity, improved flight access and pent-up demand to travel to China from South Korea could result in a surge of bookings - while the inbound economy is still recovering. READ HERE.
Taiwan is facing a similar challenge, although it is driven by 2 different factors: 1) The soaring popularity of travel to Japan among Taiwanese citizens, and 2) A continued dearth of visitors from China as a result of icy relations between Beijing and Taipei.
This report by Taipei Times notes that in 2019 Chinese visitors spent on average twice as much as those from Japan or South Korea and 3 times more than South East Asian tourists. This week, the National Policy Foundation attributed a widening tourism deficit to “a relatively slow recovery from the pandemic.” In 2024, Taiwan has revised down its inbound arrivals forecast from 10 million to around 8 million.
The second type of tourism deficit tends to occur mostly in mature travel markets and those with outsized populations. China, India, the US and Indonesia (the four largest populations in the world) are good examples - where the domestic travel economy generates vastly greater spending than the inbound economy.
Australia is another example: currently, 69% of the economic value of tourism is created by domestic travellers, Samantha Palmer, General Manager of Visitor Economy & Client Programs at Austrade, told me on the High-Yield Tourism Podcast.Inbound tourism to Australia is still recovering, and 2025 will be a pivotal year for observing how the overall visitor economy is shaping up for the longer term.
Stay tuned for more on this topic in 2025, as tourism deficits will be an important theme to watch in Asia Pacific visitor economics.
Asia Travel Re:Set will return next Sunday.
Meanwhile, find me at LinkedIn, The South East Asia Travel Show and High-Yield Tourism.
Happy travels,
Gary