Japan and China account for 53% of international passengers in October
A weak yen, visa-free travel and expanded routes reshape travel demand
Southeast Asia loses price competitiveness amid rising prices and airfares
Guam and Saipan also face agi
The landscape of South Korean outbound travel is shifting dramatically. In October, routes to Japan and China, the most popular destinations among South Korean travelers, posted explosive growth, while routes to major Southeast Asian countries long regarded as popular vacation spots, as well as Guam and Saipan, saw a sharp decline in demand. The yen’s record weakness and China’s visa-free entry policy have significantly lowered barriers to travel. Meanwhile, rising local prices and airfares in Southeast Asia, combined with aging resort infrastructure, are accelerating the polarization of travel demand.
Japan and China Account for 53.3% of International Passengers… Southeast Asian and U.S. Resort Destinations Decline
According to the Ministry of Land, Infrastructure and Transport’s Air Portal on November 10, international passenger traffic totaled 9,073,655 last month, up 10% from the same period a year earlier. However, a closer look at individual routes reveals an increasingly pronounced concentration of demand in certain regions.
Passenger traffic on Japan routes reached 2,945,694, up 23.6% year over year, while traffic on China routes surged 23% to 1,892,610. The two countries’ share of all international passengers rose from 47.6% last year to 53.3% this year, an increase of 5.8 percentage points, accounting for more than half of the overall market.
By contrast, passenger traffic on routes to 10 Southeast Asian countries, including Vietnam, Thailand and the Philippines, totaled just 1,775,959, down 10.6% from the same period a year earlier. By country, most major destinations saw declines, including Vietnam (-9.8%), Thailand (-22.1%) and the Philippines (-11.3%).
The decline was even steeper for Guam and Saipan, two of the most popular U.S. island destinations. Passenger traffic on Guam routes fell 43.6% to 40,453, while traffic on Saipan routes plunged 68.5% to 4,800. Combined passenger traffic to the two destinations shrank to about half its year-earlier level, down 48%.
“Yen at an 18-Year Low” and “Visa-Free Travel”… Japan and China Become Top Destinations
The yen’s sustained weakness is behind the strong performance of Japan routes. The won-yen exchange rate fell to around KRW 842 per 100 yen during trading last month, its lowest level in about 18 years and nine months, since January 2008. The weaker exchange rate has significantly reduced the cost of accommodation, food and other expenses in Japan, offsetting a substantial portion of airfare increases.
Travel industry performance indicators also reflect this trend. In the fourth quarter, booking rates for Japan packages offered by major travel agencies surged by between 34% and 161% year over year. According to the Japan National Tourism Organization (JNTO), the number of South Koreans visiting Japan had already exceeded 7.42 million by August this year. The prevailing view is that the annual number will top 10 million and could reach as high as 11 million.
Tourist hall of the Shanghai World Financial Center in Shanghai, China. Shanghai Municipal Administration of Culture and Tourism.
The easing of entry requirements has fueled the resurgence of China routes. Since the visa-free policy took effect, passenger traffic has risen sharply, driven not only by group tourists but also by transit passengers traveling through South Korea en route to the Americas or Europe. The holiday period spanning National Foundation Day and Hangeul Day, along with China’s proximity and suitability for short trips, has also encouraged demand to concentrate on the two countries.
Southeast Asia Loses Its Value Advantage as Guam and Saipan Face Aging Infrastructure
Southeast Asia, long a go-to destination for affordable vacations, has recently been hit by a weakening price advantage. Local accommodation and food costs have risen across the board, while high fuel surcharges, driven by comparatively long flight distances, are also adding to the burden.
For example, according to Korean Air, one-way fuel surcharges on Japan routes range from KRW 50,000 to KRW 80,000, while those on Southeast Asian routes are around KRW 180,000. For a family of four, this translates into a difference of several hundred thousand won in round-trip airfares alone.
Other factors cited include growing concerns about safety in Southeast Asia following the kidnapping and confinement of a South Korean in Cambodia last year, as well as travelers’ familiarity with the destinations.
For Guam and Saipan, aging tourist facilities and infrastructure investment that has weakened since the COVID-19 pandemic are seen as drawbacks. Demand appears to have shifted elsewhere as assessments have accumulated that the destinations do not deliver a level of satisfaction commensurate with their high prices and the cost of visiting.
Exchange Rate Fluctuations and External Conditions Could Reshape the Market
Industry officials expect strong passenger traffic centered on Japan and China to continue for the time being. In Japan, the demand base has broadened as flight capacity has expanded not only to major cities such as Tokyo and Osaka, but also to smaller regional cities such as Aomori, Hakodate and Hiroshima.
Travelers line up to get their tickets at Terminal 1 of Incheon International Airport on October 2 last year, ahead of the Chuseok holiday.
However, some believe this structure could change rapidly depending on future exchange rate movements. If the yen begins to appreciate or fluctuations in international oil prices increase the burden of airfares, demand for Japan trips that has relied on the benefits of a weak yen could shift back to alternative destinations such as Southeast Asia.
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An industry official said, “As Southeast Asia, Guam and Saipan have lost some of their appeal in terms of value for money and infrastructure, Japan and China, benefiting from a weak yen and visa-free travel, are clearly absorbing demand for short-haul trips.” The official added, “The market landscape could shift again depending on exchange rates, international oil prices and whether local tourism infrastructure improves.”
This content was produced with the assistance of AI translation services.
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