The negative growth in traffic from Japan to South Korea has started to turn around with May and June posting double-digit jumps compared to a year ago, according to Travel Journal International (TJI) Online*.
The drop in Japanese arrivals in each of the first four months of 2010 and the last month of 2009 ended a long stretch of increases dating back to April 2008 (except for August 2008 and June 2009), TJI noted.
“Unlike other major destinations that have been posting month after month declines in 2009 – the results of consumers cutting back on budgets amid the economic downturn in late 2008 – South Korea was basking in its popularity as a destination offering value-for-money travel and experiences,” TJI said.
“One reason for this was the rapid appreciation of the Japanese Yen against the Korean currency, allowing Japanese consumers to feel they were receiving -50% discounts on shopping and various purchases.”
Airlines responded to the 2009 drop in travellers heading to South Korea by launching promotions of air tickets at so-called ‘sacrifice’ prices to keep their airplanes from flying empty. “This led to a vast volume of tour products for South Korea being sold with fire-sale prices and a surge in traffic despite the economic downturn and the effects of the H1N1 virus scare,” TJI commented.
With May and June 2010 showing a turnaround, it appears that the decline has bottomed out, thanks to stable exchange rates and improvement in the South Korean economy, TJI noted. These factors have also driven an influx of Koreans into Japan, helping to fill seats – a boon to travel retailers in locations such as Narita, Haneda and Kansai Airports.
In the first five months of 2010, arrivals of South Koreans in Japan surged some +60.98% to 1,093,095, making them the latter’s largest source market with a 28.16% share. They outpace Chinese visitors who posted a 705,568 tally between January and May, up +28.55% for an 18.18% share.
While the number of Japanese heading to South Korea this year trails that of 2009 – a record year with 3,053,313 arrivals, ahead +28.39% from 2008 – the number is expected to become the second-highest in history.
TJI noted: “South Korea, for many Japanese consumers, represents a destination overseas that is most accessible and most attractive, especially among those who have little spending money or time for holidays.”
Source = The Moodie Report