Once hectic Korea-China flight routes face dwindling demand

Korean travel to and from China, along with its neighboring regions, faces persistent challenges in bouncing back in the aftermath of the Covid-19 pandemic, impacting key routes and duty-free sales.

Arrival information for flights from China is displayed at Incheon International Airport. [YONHAP]

Korean travel to and from China, along with its neighboring regions, faces persistent challenges in bouncing back in the aftermath of the Covid-19 pandemic, impacting key routes and duty-free sales.

Four years ago, two destinations from mainland China were among the top 10 international routes with the largest number of passengers to and from Korea. But none of the top 10 international routes last year included those heading to mainland China.

Simultaneously, Korea's duty-free sales, once driven by Chinese big spenders, find themselves in a more precarious state than during the peak of the pandemic.

Korea's top 10 flight routes in terms of passengers [YOO YOUNG-RAE]

Korea-Mainland China route takes a hit In 2019, two Chinese routes — Incheon-Pudong (Shanghai) and Incheon-Qingdao — were among the top 10 flight routes with the largest passenger numbers, ranking eighth and tenth, respectively. However, there was none last year.

"The travel sentiment toward mainland China hasn't recovered compared to the pre-Covid pandemic era," remarked an official from Korea's airline industry.

"Among Koreans, there's still hesitation about whether it's OK to travel. The trend is leaning toward opting for destinations like Japan or Southeast Asia, where one can enjoy vacations more affordably with the same budget," she said. "On the other hand, inbound travel from China to Korea, which used to consist largely of group tourists, is now shifting toward individual tourists, coupled with economic downturns in China."

Other Chinese-speaking neighboring regions that were in the top 10 in 2019 included Hong Kong and Taipei. They managed to secure a spot in the top 10 last year, but showed less popularity compared to four years ago.

Incheon-Hong Kong, once first, slid down to eighth place. The passenger count on the Incheon-Hong Kong route nearly halved by 45 percent totaling 1.74 million in 2023 compared to 3.14 million in 2019.

The Hong Kong Tourism Board invites panelists from MBC's "Point of Omniscient Interference" TV program, which is interpreted as a move to revive the destination's past glory. [SCREEN CAPTURE]

Despite maintaining the same ranking, the Incheon-Taipei route witnessed a 23 percent decrease in passenger numbers, dropping from 2.58 million to 2 million.

Farewell to China's shopaholic youke and daigong merchants The absence of the "big-spending" Chinese group tourists in Korea has left the country's duty-free sales worse off than during the pandemic.

According to the Korea Duty Free Shops Association, domestic duty-free sales from January to November last year totaled 12.45 trillion won ($9.47 billion). Even when considering projected sales for December, the annual figure falls 19.7 percent short of the 15.5 trillion won levels observed during the complete travel standstill during the Covid-19 pandemic in 2020.

Industry insiders attribute the poor performance to the delayed return of Chinese group tourists, known as youke (Chinese tourists traveling in large groups), alongside a reduction in daigong (Chinese informal cross-border traders that are said to buy Korean products in large quantities and sell them for a profit in the Chinese market). Despite the resumption of group tourism from China after more than a six-year hiatus, the number of visitors fell below expectations, partially due to economic downturns in China and a shift in travel trends from group to individual tourism.

"The Korean tourism market is bouncing back swiftly to its typical state since the onset of Covid-19, yet there's a clear trend toward greater diversity of tourists and individual tourists," said Son Gun-il, senior vice president at Shinsegae DF, in a press briefing last month.

"There's also a notable shift in consumer behavior, with the growing inclination toward 'dailycation', reflecting a desire among tourists to personally experience everyday lives of Koreans [by exploring local stores rather than opting for duty-free shopping]," Son added, highlighting the importance of adapting to the changing needs of individual tourists in the travel distribution industry.

Various setbacks, including reduced transactions with daigong due to lower commissions, a rise in the guochao trend favoring domestic products, and a slump in Chinese consumption, have further compounded the challenges faced by Korea's duty-free sector.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]