Spending on overseas tourism rises by most in 13 years

Passengers arrive at Incheon Airport on Oct. 3, the last day of the Chuseok holidays (Newsis)

Korean tourists' total spending on overseas group tours posted the sharpest increase last month in 13 years, according to Statistics Korea on Tuesday, mainly due to rises in accommodation and flight costs.

Consumer prices for overseas group tours in October showed a 15.9 percent increase from the same month last year, data from the Korean Statistical Information Service showed.

Although the figure has been on a constant rise in recent months, advancing from 5.7 percent in August to 12.6 percent in September, this is the sharpest increase seen in more than 13 years since the monthly figure rose by 17.6 percent on-year in September 2010.

The figure shows a steep increase when compared to the fact that the consumer price growth, which indicates the general rate of inflation, stood at 3.8 percent in the same month.

Passengers arrive at Incheon Airport on Oct. 3, the last day of the Chuseok holidays (Newsis)

With more countries having lifted travel restrictions with the waning of the pandemic, more Koreans are going overseas for travel purposes.

The number of outbound travelers from Korea stood at 2.01 million in September, marking a 225.4 percent increase from the same month last year. The figure has made a nearly full recovery from the pre-pandemic times, rebounding to 98 percent of that of October 2019.

The increase in spending on overseas tourism stems from higher costs for accommodation and flights, as the global economy has been affected by persistent inflation. The number of flights in operation has not yet returned to pre-pandemic levels, along with higher fuel surcharges from the volatility in international oil prices, sources said.

Furthermore, travel agencies are introducing more group tour products with higher prices as they are trying to meet the diversified needs of customers.

“Before the pandemic, cost was the most important factor when customers chose tour products,” an official from a local travel agency said. “But after the pandemic, customers have a thirst for traveling and are willing to spend more, though it may be financially burdensome.”

“In return, travel agencies are introducing tour products that reflect customer demand though they may be expensive.”

More tourists are seeking "no shopping" group tours, as well, meaning they refuse to go on planned shopping trips offered by travel agencies. The shopping sprees are often used to bring down the costs of tour products as the agencies can generate a profit from the sales.

"I booked a group tour to Bangkok. Though my tour was more expensive than others, I chose it because it is a 'no shopping' tour," said Bae Mun-suk, a woman in her 50s based in Seoul.

"I am tired of being dragged to all kinds of shopping venues that I am not interested in. Though it may be more expensive, I would rather go for something more (to my taste)."

Meanwhile, contrary to the strong demand and surging prices for overseas trips, the price growth for domestic group tours contracted by 3.4 percent in October, following 7.3 percent and 10.5 percent falls in September and August, respectively.

The figure has been on the decline for five consecutive months from June, partly from the base effect of the steep price growth from last year. In October 2022, prices for domestic group tours posted growth of 26 percent.

While Korean tourists are spending more on overseas group tours, more people from overseas are visiting Korea, too.

Some 1.09 million foreign tourists visited South Korea in September, marking a 225.2 percent increase on-year, according to the Korea Tourism Agency. The figure made an approximately 75 percent recovery from the same month in 2019. The number of foreign tourists to Korea has surpassed the 1-million-mark for three consecutive months.

By Im Eun-byel(silverstar@heraldcorp.com)