Why Korea suffers record trade deficit despite K-culture boom


The popularity of K-culture has attracted a growing number of foreign travelers to Korea, but at the same time, more Korean nationals are traveling abroad, resulting in a record travel deficit for the country in the first half of the year. The deficit, amounting to $6.48 billion, is the largest in six years, driven by factors such as rising costs at home and changing travel preferences among younger generations. This has led to a surge in overseas travel by Koreans and increased spending on international trips, with the number of Koreans traveling abroad reaching 14.02 million in the first half of the year, compared to 7.7 million foreign tourists visiting Korea. Despite signs of recovery in both inbound and outbound travel, there has been a notable shift in spending patterns. While spending by Koreans abroad surged by 89.2 percent compared to 2019, expenditure by foreign tourists in South Korea only reached 75.4 percent of pre-pandemic levels. The shift from group-oriented to individual tourism has also impacted travel revenue, with a decline in shopping at duty-free stores and large malls, as Chinese group tourists now seek more personalized and affordable cultural experiences rather than high-end goods. As South Korea adapts to these changing travel dynamics, the government and the tourism industry are adjusting their strategies to meet the evolving preferences of both domestic and international travelers. For instance, the duty-free industry has started to attract tourists by setting up pop-up stores and distributing vouchers in popular commercial districts frequented by travelers.


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