Korea’s Tourism Deficit Reaches $10 Billion as Domestic Outbound Travel Surges While Foreign Visitor Spending Declines

Foreign arrivals rise, but per-capita spending drops
Package tours decline as independent and cruise travel surge
Tourism deficit continues widening trend since 2020

The number of foreign tourists visiting South Korea in the first half of this year surpassed pre-pandemic levels, yet per-capita spending fell, keeping tourism revenue stagnant. Meanwhile, a sharp increase in overseas travel by Koreans has driven up outbound spending, deepening the tourism deficit. Experts note that improving the balance requires boosting both inbound and domestic tourism, but persistent issues such as inadequate regional infrastructure and chronic overcharging remain obstacles to changing public perception.

Japan and Vietnam Emerge as Top Destinations for Koreans

According to the Korea Tourism Organization (KTO) on the 28th, the number of foreign visitors to Korea in the first half of 2025 reached 8.83 million, up 14.6% from a year earlier and 104.6% higher than in 2019. However, average spending per visitor fell 17.4% from $1,255 in 2019 to $1,012. Total tourism revenue also declined by 13.6% to $8.94 billion. The shift in travel patterns has been notable: large-scale group tours, which generate higher consumption, fell from 15.1% in 2019 to 8.6% in the first quarter of this year.

In contrast, outbound travel by Koreans nearly returned to pre-pandemic levels, with 14.56 million people traveling abroad in the first half—approaching 2019’s 15.01 million. Japan and Vietnam have emerged as Koreans’ favorite destinations, driving a surge in overseas spending. Korean travelers to Japan increased 23.8% from 2019 to 4.78 million, while those visiting Vietnam rose to 2.21 million, surpassing pre-pandemic figures. Correspondingly, total outbound tourism expenditure reached $14.14 billion, nearly matching the $14.5 billion level of 2019. Average per-capita spending jumped from $968 to $1,175 over the same period.

Decline in Chinese Tourists Hits Duty-Free Sales

The growing tourism deficit stems from falling foreign visitor spending amid rising outbound expenditures by Koreans. According to a report by Yanolja Research, Korea’s tourism revenue and spending last year were $16.45 billion and $26.49 billion, respectively, resulting in a $10.04 billion deficit. The shortfall has steadily widened from $8.52 billion in 2019 to $3.18 billion in 2020, $4.33 billion in 2021, $5.72 billion in 2022, and $9.69 billion in 2023.

This stands in contrast to the global tourism recovery since the end of the pandemic. Worldwide tourist arrivals reached 1.45 billion in 2024—98.7% of the 2019 level—while total global tourism revenue climbed 4% from 2019 to $1.6 trillion. Regions such as the Middle East, Africa, and Europe have already surpassed pre-pandemic performance. However, Asia-Pacific’s tourism revenue recovered to just 87.1% of 2019 levels, with Korea lagging even further behind its regional peers.

The report cited the drop in Chinese visitors as a key factor. Only 4.6 million Chinese tourists visited Korea last year, 76.4% of the 2019 level. Shifts in travel behavior also contributed: the share of independent travelers rose from 77.1% in 2019 to 82.9% in the first quarter of 2025, while cruise arrivals—characterized by shorter stays—increased from 90,000 to 460,000. Conversely, business travelers, who tend to spend more, fell from 17.9% to 14.7%. This shift has hit duty-free retailers hard, with total sales plummeting to $8.1 billion last year—less than half of the 2019 figure.

Persistent Overpricing and Poor Service Tarnish Domestic Destinations

Experts emphasize that addressing the tourism deficit requires not only attracting more foreign visitors but also revitalizing domestic tourism. Cost-effectiveness remains the biggest barrier: many online comments and articles about local travel echo the sentiment, “For that price, I’d rather go abroad.” This perception is compounded by recurring incidents of overcharging and poor service at domestic destinations.
One example is the “fatty pork belly” controversy on Ulleung Island, where a YouTuber with 600,000 subscribers exposed a restaurant for serving mostly fat instead of meat while charging full price. Similarly, a YouTuber with 700,000 followers reported being repeatedly urged to “hurry up and leave” while eating alone at a seafood stall in Sokcho, a popular summer destination. In Yeosu, a city attracting 13 million visitors annually, solo diners were also reportedly treated disrespectfully. Despite local authorities’ crackdowns, public distrust remains deep.
Price-gouging in tourist areas has been a recurring issue across administrations. In 2016, then-President Park Geun-hye ordered action after a Chinese visitor’s social media post about a $7 gimbap went viral. More recently, President Lee Jae-myung addressed the issue in a cabinet meeting, instructing officials to devise countermeasures. Yet industry responses remain skeptical, arguing that without tackling the root causes, no lasting solution is possible.
Industry officials contend that “overcharging isn’t the cause of regional tourism’s decline—it’s a symptom.” They point to deepening disparities between metropolitan and regional areas in infrastructure and content as the real issue. In regions with limited tourism capacity, sudden spikes in demand inevitably push up prices. As a result, structural imbalances in supply and demand—not just opportunistic pricing—continue to undermine the competitiveness of Korea’s domestic tourism sector.