Spending by Korean travelers abroad hit a record high in the second quarter of this year in contrast to a protracted slump in domestic consumption in the aftermath of the ferry disaster in April. According to data released by the Korea Tourism Organization on Sunday, Koreans spent a record $5 billion abroad in the April-June period, up 19.6 percent from a year earlier.
As the number of outbound tourists rises continuously, so has the average spending per traveler. This trend, which is partly attributed to the Korean currency appreciating against the U.S. dollar, may well capture the attention of economic policymakers here, who are striving to boost domestic spending as a key part of efforts to reinvigorate the slowing economy.
The Korean economy grew by 0.6 percent from three months earlier in the April-June period, the slowest pace in five quarters. Putting forward the figure last month, central bank analysts attributed the sluggish growth mainly to lackluster domestic demand in the wake of the April 16 ferry disaster that left more than 300 people dead or missing.
The record-breaking spending by Korean overseas travelers suggests there is much room for increasing consumption at home ― particularly in the tourism sector.
Early this year, the government unveiled a package of measures to boost the local tourism industry, including introducing tourism weeks in the spring and fall, when transportation and accommodation fees are discounted, and providing employees at small companies with vacation bonuses partly subsidized by state coffers.
It is necessary to facilitate a virtuous circle in which the galvanized tourism sector leads to greater domestic consumption and more jobs. Data from research institutes here show the current annual expenditure of 24 trillion won ($23 billion) on local tourism has an economic effect worth more than 39 trillion won, giving jobs to about 500,000 people.
More attention should be paid to ways of attracting more foreign tourists and getting affluent Koreans to turn to local destinations rather than going on expensive overseas trips.
Creating more differentiated products tailored to the characteristics of each region would be helpful. But regulations that stand in the way of boosting the tourism industry as a new growth engine urgently need to be lifted. The government should move more quickly to ease restrictions on building large resort complexes with casinos and operating medical centers for foreigners.
These facilities would especially help bring more Chinese tourists here. The number of Chinese visitors to Korea jumped 52.5 percent from a year earlier to 4.3 million in 2013. To boost the massive inflow of Chinese tourists, it is necessary to increase the range of those who can get multiple visas ― which is currently limited to government officials, businessmen and medical professionals ― to include middle-income citizens.
Related government ministries are preparing to report plans to support the service industries, including the tourism sector, to President Park Geun-hye later this month. Her aides say Park, who returned to work Monday after a short summer holiday inside the presidential compound, is to focus on how to revitalize the economy, holding a series of meetings with economic policymakers and business leaders in the coming weeks.
She might have taken into account the ferry disaster in opting to rest in her official residence during the five-day vacation. In light of the need to boost domestic tourism, however, she did not seem to have set a good example. It is hoped that she will be able to squeeze some time out of her schedule to back her remark made early this year that a 10 percent increase in domestic tourism could have a significant effect on the economy.
