Weak yen drives South Korea’s tourism deficit to record heights

SEOUL, South Korea – South Korea’s tourism deficit touched a seven-quarter high in the first quarter due to the Japanese yen’s fall versus the local currency, data showed Tuesday, with local travel ag

SEOUL, South Korea – South Korea’s tourism deficit touched a seven-quarter high in the first quarter due to the Japanese yen’s fall versus the local currency, data showed Tuesday, with local travel agencies scurrying to attract tourists to Japan.

According to the data by the Bank of Korea, the country’s tourism deficit came to US$2.04 billion in the first quarter, the biggest since the second quarter of 2011 when a shortfall of $2.25 billion was logged.

The expansion of the tourism deficit in the first quarter was mainly due to a fall in the number of Japanese travelers to South Korea and a rise in the number of South Korean tourists to Japan, the data showed.

“The yen’s fall against the South Korean won sparked by Abenomics in October of last year caused the number of Japanese travelers to South Korea to tumble,” Lee Sung-tae, a researcher at the Korea Culture & Tourism Institute. “In contrast, the number of Korean travelers to Japan rose 30 percent in the first quarter compared with a year ago.”

Abenomics refers to the economic policies advocated by Shinzo Abe, the current prime minister of Japan.

The South Korean won rose to an average of 1,161.10 won per 100 yen in March, up about 20 percent compared with an average 1,400.86 won in October last year.

Meanwhile, local travel agencies are rushing to step up their marketing activities to lure more Korean travelers to Japan, industry sources said.

Modetour Network Inc., South Korea’s second-largest travel agency, saw the number of its clients who traveled Japan rise 76 percent in April compared with a year ago.

Interparktour, the biggest local online travel agency, said the number of flight reservations to Japan soared 70 percent last month from a year ago.

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Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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