South Korea tourism hits 15 million visitors amid duty-free sales slump

South Korea has seen a significant surge in foreign tourism, with cumulative visitors exceeding 15 million through August, a 21.6% increase compared to the previous year. Foreign tourist card spending has also reached a record high, surpassing 14 trillion won.

Despite the rise in visitor numbers, the duty-free industry is facing a crisis. While Chinese visitor numbers increased by 29% year-on-year, duty-free sales from Chinese tourists plummeted from 16.7 trillion won in 2021 to approximately 8.2 trillion won last year. The average per-person spending at duty-free shops has dropped by over 84% since 2021.

This shift suggests a change in consumption patterns. The traditional reliance on large-scale bulk buyers, known as 'daigou', is being replaced by individual travelers who prefer shopping at street shops, drugstores, and utilizing post-purchase tax refunds. Consequently, while duty-free revenue has declined, the volume and amount of tax refunds for foreign tourists have surged significantly.