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Market Insights South Korea

Publication date:
Dec 2013

Language:
English

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Summary

South Korea is one of Asia’s ‘economic tigers’, and per capita GDP has been rising rapidly. It is now around US$23,000 – comparable to that in Greece and Portugal, but still well short of the US$47,000 in Japan and the US$ 52,000 in the USA, for example. At this level, international travel has become possible for large numbers of people, but a long-haul trip remains a major commitment for most Koreans.

The economy recovered very quickly from the global financial and economic crisis in 2008-09, but growth rates have since remained modest by Asian standards. GDP rose in real terms by 2% in 2012 and is forecast to increase by 4% in 2015.

After falling by 30% in the wake of the 2009-09 crisis, outbound trips finally set a new record of 12.5 mn in 2012. This was an increase of 8% on 2011. Outbound trips have grown by an average of 10% a year since 1991.

The record 12.5 million trips in 2012 were equivalent to one in four of the population – an outbound travel intensity of 26%. This is substantially higher than that in Japan (13%) but is rather low by world standards, in relation to GDP per capita.

International travel expenditure (excluding transport) fell from a peak of US$22.0 bn in 2008 to just US$15 bn in 2009, and has since recovered only partially, to US$20.1 bn. UNWTO ranked South Korea 14th in the world on this basis in 2007, but 17th in 2009, 26th in 2010, 22nd in 2011 and 21st in 2012.

The great majority of trips are to Asian destinations – the top 12 destinations are all Asian, with the exception of the USA. Europe is still regarded by most people as a ‘once in a lifetime’ destination and attracts fewer than 1mn Koreans a year. However, France, Germany, Italy, Switzerland, Turkey and the UK usually rank among the top 25 destinations and industry players believe the growth potential for Europe is strong.