Tourism Outlook: South Korea

July 2011
1
South Korea experienced solid growth in tourist arrivals in 2010, up 12.5 percent to
8.8 million. This growth looks set to be on track to achieve the Korean Governments
objective of 10 million visitors by 2012
1
. The Government has also eased visa
regulations for tourists from 11 South Asian countries
2
in a bid to attract more visitors.
Korean Tourism Organisation (KTO) is closely supporting this growth, initiating
promotions like the two-year, government-sponsored 2010-2012 Visit Korea Year
campaign and the Smile Campaign featuring popular Korean actor, Bae Yong-joon. Further, Asiana
Airlines, whose headquarters are located at Incheon International Airport, rolled out the Grand
Welcome campaign, with staff warmly welcoming tourists at their department airport as well as on
arrival in Korea.
This rosy outlook is supported by a 13.7 percent year on year increase in spending by international
Visa cardholders in South Korea to $1.7 billion, as payment card acceptance continues to grow.
As part of Visas commitment to contributing market intelligence to the global tourism industry, I am
very pleased to present the first Tourism Outlook: South Korea. This report uses actual Visa card spend
data to aggregate information about visitors where they are coming from, how much they are
spending and what they are buying.
As the worlds largest retail electronic payments network, Visa is in a unique position to provide
insight into where and how visitors are spending their money. Our proprietary processing network
allows us to analyse Visa data to identify global tourism spending insights and provide useful market
data and intelligence to businesses to improve product offerings and marketing strategies that can
best attract visitors and strengthen tourism competitiveness.
Turning Visa transaction data into useful business information is one way Visa delivers value to
businesses and countries where tourism sectors are strong contributors to the domestic economy.
Visas role in tourism the world over is ensuring travellers can make purchases and payments securely
and conveniently.
South Korea, along with China and Japan, has pledged to support ASEANs five-year tourism strategic
plan 2011-2015
3
to promote intra-ASEAN tourism marketing, to develop tourism products, to improve
quality tourism, to build human resources development, and to attract investments for the sector. We
support South Koreas tourism goals and its inter-regional approach to promoting tourism, and look
forward to working with South Korea by facilitating safe and secure electronic payments.

Jim Dixon, Country Manager, Korea, Visa
1
Korean Tourism Organisation
2
Includes Myanmar, Cambodia, Sri Lanka, Indonesia, Laos, Nepal, Pakistan, Philippines, Vietnam, India and Bangladesh
3
Global Times, China, Japan and South Korea support ASEANs tourism plan, 19 January 2011
2
Overview
In 2010, spend by international visitors on Visa cards in South Korea grew
by 13.7 percent year on year to $1.7 billion, according to VisaVue data. There
were 8.8 million international arrivals in South Korea in 2010, up 12.5 percent
on the previous year, which makes South Korea the tenth most popular tourist
destination in Asia.
4

4
Korean Tourism Organisation
While Japan was by far the single greatest
international source market for Korean tourism
holding 36.6 percent of the share of
transactions it was the only top 10 source
market to experience a fall in year on year
spending, down 2.5 percent to $610.6 million.
Not only did the overall total spend fall, but the
average amount spent by a visitor on each
transaction on their Visa card fell 5.9 percent to
$175.05 from $186.98.
The United States was the second largest
source market for South Korea, and 2010
reflected a 13.1 percent growth in spending, up
$362.6 million from 2009. Yet the average
amount spent fell 5.1 percent to $107.29.
Meanwhile, the North Asian countries of Japan,
China, Hong Kong and Taiwan together account
for roughly 75 percent of the total number of
international tourists to South Korea.
5
Most of the growth was driven by regional
powerhouse China. According to J. Michael Oh
at San Francisco-based Matthews International
Capital Management, South Korea is already a
popular destination for Japanese tourists for
many years and now also becoming a top
destination for Chinese travellers. China was
South Koreas second-largest tourist market in
2010 with some 1.3 million Chinese tourists
visiting in 2010, up 40 percent from 2009.
6

Chinas growing economic influence was also
reflected in tourism receipts in South Korea.
Chinese travellers were the third-largest source
market according to VisaVue data, spending
$119.9 million, up 21.6 percent year on year.
Interestingly, a number of affluent Chinese
tourists are buying vacation homes in Korea.
Half of all available units at a new resort
development on Jeju Island, one of Koreas most
popular tourist destinations, were bought by
Chinese nationals,
7
Mr. Oh said.
3
Japan 2.5%
United States +13.1%
China +21.6%
$33.3M
$45.1M
$29.1M
$48.7M
$42.5M
$49.7M
$61.9M
$76.5M
$98.6M
$119.9M
$320.6M
$362.6M
$626.2M
$610.6M
$23.7M
$43M
$30.4M
$37.7M
$25.3M
$36M
Hong Kong +23.7%
Taiwan +17%
Thailand +67.5%
Singapore +35.2%
Russian Federation +81.7%
Canada +24%
United Kingdom +42.3%
Source: VisaVue Travel Data: 2009 - 2010 2009 2010
5
Korean Tourism Organisation
6
Korean Tourism Organisation
7
IB Traveller, G20 host South Korea needs to improve tourism infrastructure, 8 October 2010
4
Japan 5.9%
United States 5.1%
China +3.8%
$209.85
$224.2
$166.82
$186.19
$158.97
$165.83
$192.76
$212.54
$143.85
$149.37
$113.1
$107.29
$186.08
$175.05
$154.33
$162.55
$99.66
$111.08
$153.5
$162.4
Hong Kong +10.3%
Taiwan +4.3%
Thailand +11.6%
Singapore +6.8%
Russian Federation +5.3%
Canada +11.5%
United Kingdom +5.8%
Source: VisaVue Travel Data: 2009 - 2010 2009 2010
According to VisaVue data, 2010 also saw solid
growth in visitor spending from cardholders
from Hong Kong and Taiwan, up 23.7 percent
and 17 percent respectively. Both source
markets also experienced growth in the average
cardholder spend.
Among the top 10 source markets, South Korea
witnessed the greatest growth in spending from
Russian and Thai visitors. Russian spending
grew 81.7 per cent year on year to $43 million.
The average amount spent per transaction by a
Russian cardholder also grew, up 5.3 percent to
$162.55 from $154.33. 2010 was notably the
20th anniversary of the establishment of
diplomatic ties between Korea and Russia. A
number of activities were developed to
celebrate the link including an increase in airline
routes between Moscow and Incheon.
Spending by Thai visitors grew 67.5 percent year
on year to $48.7 million, and the average
transaction amount also grew strongly by 11.6
percent to $186.19 from $166.82. Thai average
spending was greater than that of Japanese and
American visitors to Korea, yet less than Hong
Kong and Singaporean visitors.
According to VisaVue data, Singaporean visitors
spent the most per transaction of all top 10
countries, averaging $224.20 per transaction, a
6.8 percent increase year on year. According to
the Singapore Tourism Board, almost 100,000
visitors from Singapore visit Korea each year,
with the majority visiting Seoul city, Gyeonggi
Province, Gangwon Province and Jeju Province.
8
Visitors to Korea from the United Kingdom, the
tenth largest source market, also generated
solid growth in year on year spending, up 42.3
percent to $36 million. Average spend also
increased by 5.8 percent to $162.40. The ninth
biggest source market, Canada, grew spending
by 24 percent to $37.7 million.
Overall, 2010 saw the total number of Visa
transactions by international visitors grow by
15.9 percent. This suggests that Koreas tourism
campaigns
9

are already paying dividends in
attracting increasing numbers of international
visitors.
8
Singapore Tourism Board media release, Singapore And Korea Join Hands To Increase International Visitors Between Busan And Singapore, 26 May 2010
9
2010-2012 Visit Korea Year Campaign, Smile Campaign, and Grand Welcome campaign which are part of the Korean Tourism Organisations aim to attract 10
million visitors by 2012
5
While Japan remained the number one source market of international
visitors to Korea in 2010, overall spending fell 2.5 percent year on year to
$610.6 million. Of the top 10 merchant categories, Korean department stores
experienced the greatest fall of 43.2 percent, but still attracted $24.5 million
in Japanese spending. A potential reason behind this drop could be that in
2009, the Korean Won was relatively weak and therefore Japanese tourists
who benefited from the stronger Japanese Yen showed greater levels of spend
in peak shopping seasons such as the Korea Bargain Sale.
Neighbouring Japan
6
The other travel and entertainment
10
category
represented the greatest proportion of overall
Japanese visitor spending, yet recorded an
eight percent decline year on year to $322.1
million. The average spend in this category also
fell 5.1 percent to $227.21.
Accommodation, restaurants and discount
stores all recorded solid growth during 2010.
Japanese visitors spent $84.2 million on
accommodation during the year, up 30.1
percent on 2009. Restaurants also benefited
from solid Japanese spending, rising 18.1
percent year on year to $20.9 million, with the
average amount spent per transaction
increasing by 2.9 percent to $62.64 compared
to 2009. This rise in restaurant spending could
be attributed to the global online campaign
called buzz Korea
11
, which is promoting
Korean food culture to audiences around the
world.
Discounts stores recorded a healthy growth in
spending of 17.6 percent to $4.5 million, yet the
average transaction amount fell marginally by
1.7 percent to $61.90. Spending in department
stores fell by 43.2 percent year on year to
$24.6 million, and the average transaction
amount declined by 28.7 percent to $171.75.
The bill pay
12
merchant segment

also
experienced solid growth with Japanese
spending, which rose 19.5 percent year on year
to $8.1 million. The average Japanese spend in
the bill pay category also rose, up 9.6 percent
to $125.84.
Other travel & entertainment 8%
Accommodation +30.1%
Other retail +11.1%
$14.4M
$15.4M
$17.7M
$20.9M
$43.3M
$24.6M
$38.7M
$37.2M
$64.4M
$71.6M
$64.8M
$84.2
$350.1M
$322.1M
$10.5M
$10.7M
$6.7M
$8.1M
$3.7M
$4.5M
Remaining merchants 4.1%
Department stores 43.2%
Restaurants +18.1%
Airlines +6.5%
Health care +1.5%
Bill pay +19.5%
Discount stores +17.6%
Source: VisaVue Travel Data: 2009 - 2010
2009 2010
10
Includes buses, boat rentals, airport purchases, duty free, home furnishings, catering, bars, casinos, golf courses, etc
11
Travidition, Korean tourism collaborates with TV and YouTube personalities, 29 March 2011
12
Includes courier services, warehousing/storage, telecommunications services, internet services and utilities, etc
Other travel & entertainment 5.1%
Accommodation +18.1%
Other retail 3.6%
$298.12
$315.92
$60.87
$62.64
$241.02
$171.75
$288.69
$290.27
$99.88
$96.33
$221.11
$264.78
$239.41
$227.21
$251.35
$273.03
$114.78
$125.84
$62.97
$61.9
Remaining merchants +0.5%
Department stores 28.7%
Restaurants +2.9%
Airlines +6%
Health care +8.6%
Bill pay +9.6%
Discount stores 1.7%
Source: VisaVue Travel Data: 2009 - 2010
2009 2010
The autumn months of October and November
attracted the most significant international
spending, according to VisaVue data. In
October, international visitors to Korea spent
$170.3 million on Visa cardholders and $168.7
million in November. This was supported by
visitor numbers recorded by the Korean Tourism
Organisation (KTO), which saw an 18.3 percent
year on year growth in October visitors to
872,550 and a 14.9 percent increase to 738,271
in November.
This time of year is considered to be when
Korea is at its most beautiful, with perfect
temperatures, blue sky days and the autumn
foliage in full bloom
13
. Most of the local districts
hold annual festivals which are attended by
numerous foreign tourists.
While October 2009 was the favourite month
for visitors according to the KTO, which
recorded 737,373 visitors, VisaVue data
recorded the most spending in 2009 during the
month of December ($141.5 million). Looking a
year later, VisaVue data tracked visitor spending
in October 2010 grew 24.9 percent year on year
to $170.3 million, while year on year growth for
December only grew 9.6 percent to $155.1 million.
7
Seasonal Visitors
13
Destination 360 website, South Korea Travel
January 6.3%
February 4.2%
March +6.3%
609,258
754,672
530,506
718,440
574,559
729,450
688,586
730,365
724,117
769,894
666,928
638,911
607,659
569,453
695,880
833,693
678,691
764,693
737,373
872,550
April +6.1%
May +27%
June +35.4%
July +23.9%
August +19.8%
September +12.7%
October +18.3%
642,672
738,271
November +14.9%
661,304
677,366
December +2.4%
Source: Korea Tourism Organisation
2009 2010
8
Spring is also considered a very popular tourism
season, especially with the blooming of cherry
blossoms and flowers.
14
This is evidenced by
VisaVue data, which also saw strong growth in
visitor spending during the spring and summer
months from May through June and July to
August in 2010, rising 19.2 percent, 33.9
percent, 17.4 percent and 27.2 percent year on
year respectively. June experienced the most
growth overall of all 12 months, followed closely
by November, which experienced spending
growth of 30.3 percent.
The only two months to experience year on year
falls in visitor spending by Visa cardholders
were the winter months of January and February
2010, which fell 5.3 percent and 8.4 percent
respectively. This corresponds with falls in
visitor numbers during the same months, where
January 2010 saw a drop of 6.3 percent to
569,453 visitors and February 2010 experienced
a 4.2 percent fall in visitors to 638,911,
according to the KTO.
14
CRI English, Jeju Island, Join the Buzz, 28 March 2011
January +5.6%
February +0.3%
March +11.5%
818,836
975,006
728,163
954,409
751,736
914,296
799,186
854,916
826,065
921,127
713,969
716,251
704,617
744,292
815,310
1025,404
888,476
968,433
871,337
1058,597
April +7%
May +21.6%
June +31.1%
July +19.1%
August +25.8%
September +9%
October +21.5%
819,453
1040,905
November +27%
885,719
983,185
December +11%
Source: VisaVue Travel Data: 2009 - 2010
2009 2010
January 5.3%
February 8.4%
March +8.7%
$114M
$133.9M
$99.5M
$133.3M
$110.6M
$131.9M
$125.2M
$130.9M
$126.6M
$137.7M
$119.8M
$109.7M
$117.8M
$111.6M
$112M
$142.3M
$133.6M
$142.3M
$136.4M
$170.3M
April +4.5%
May +19.2%
June +33.9%
July +17.4%
August +27.2%
September +6.5%
October +24.9%
$129.5M
$168.7M
November +30.3%
$141.5M
$155.1M
December +9.6%
Source: VisaVue Travel Data: 2009 - 2010
2009 2010
9
The toll and bridge fees category also
witnessed significant spending, with year on
year growth of 84.7 percent to $5,203, while
the auto rental merchant category also rose,
albeit at a slower rate of 21.9 percent to $4.1
million. This suggests driving holidays are
becoming increasingly popular with
international visitors to Korea.
In 2010 the restaurants and Quick Service
Restaurants (QSRs) categories both
experienced solid spending growth year on
year, with restaurant spend rising 23.3 percent
to $78.5 million, while QSRs rose 42.7 percent
to $1.7 million.
Growing Merchant Categories
Growing tourism may become a boon for Korean taxi drivers if merchant
category growth segments for 2010 are an indicator. Many merchant
categories experienced growth in spending between 2010 and 2009, and
the other emerging
15
category (which includes taxis) experienced the most
significant growth of 85.8 percent to $5.7 million.
15
Includes local commuter transport, taxis, etc
10
International visitor spending on accommodation
grew 33.8 percent to $283.9 million during
2010, while spending with Korean travel
agencies grew 31.2 percent to $7.7 million.
Yet the steamship and cruise lines merchant
category recorded an 18 percent fall in spending
to $44,056 in 2010.
During 2010, international visitors increased
spending in the healthcare category by 31.6 per
cent to $49.5 million, and spending at drug
stores and pharmacies increased by 20.8
percent to $2.7 million.
These VisaVue healthcare spending statistics
support the research report by global market
research company RNCOS that suggests South
Korea is emerging as a popular destination for
medical tourism, predicting that medical
tourist arrivals in South Korea will grow around
42 percent during 2009 to 2012.
16
Indeed
foreign visitors especially those from Japan
and China, have been noted to visit South Korea
to get beauty treatments and to enjoy spa
facilities.
17
16
RNCOS, Emerging Medical Tourism in South Korea, 23 November 2010
17
Reuters, In crisis, South Korea hot spot for nose jobs, 3 April 2009
18
Includes railroads, marinas, ATMs, financial institutions, insurance, money transfers, etc
17,771,704
23,289,197
37,592,798
49,470,952
212,158,913
283,971,373
5,929,095
7,777,148
18,557,999
23,724,767
191,874,725
242,800,542
Other emerging
15
+85.8%
Toll and bridge fees +84.7%
Wholesale clubs +60.8%
1,189,173
1,696,725
43,851
70,530
2,817
5,203
3,074,634
5,713,607
QSRs +42.7%
Accommodation +33.8%
Healthcare +31.6%
Bill pay +31%
Travel agencies +31.2%
Discount stores +27.8%
Remaining merchants
18
+26.5%
63,658,385
78,509,510
Restaurants +23.3%
3,546,478
4,302,360
Oil +21.3%
3,425,585
4,174,744
Auto rental +21.9%
2,239,743
2,705,103
Drug stores & pharmacies +20.8%
172,229,433
209,664,130
Other retail
19
+21.7%
Source: VisaVue Travel Data: 2009 - 2010
2009 2010
11
Korea: A shopping hub
Overall, year on year spending in Korean shops
20

increased 9.3 percent to $328.9 million. International
tourists arent flocking to Korea, namely Seoul, just for
pricey European bags and clothing. Their itineraries often
include sports massages, beauty tattoo treatments for
eyebrows and eyeliners, and other services.
21

The high overall spend in shopping was bolstered by
spending in discount stores, which rose 27.8 percent to
$23.7 million, the other retail
19
category growing 21.7
percent to $209.7 million and spending in sporting goods
stores increasing 8.6 percent to around $7 million.
Annual sales growth at major South Korean department
store chains in 2010 rose to an eight-month high in
October 2010, led by clothing sales and by purchases of
luxury goods by Chinese tourists, who spent 20 percent
more on average than US tourists.
22
Overall international
spending in department stores however fell 15.2 percent
to $69 million in October 2010 according to VisaVue data.
Meanwhile, the miscellaneous speciality retail category
fell 19 percent to $9.9 million, spending in furniture and
equipment stores decreased by 5.6 percent to around $4
million and spending in the radio, TV and stereo category
declined two percent to $5.7 million.
Korea is continuing its efforts to draw international
tourists to the country with the Seoul Grand Sale, which
is part of the Visit Korea Year 2010-2012 campaign.
One of the biggest shopping festivals in Korea, the 54-day
event saw participation from five thousand stores,
restaurants, and hotels in 2010. During the Grand Sale
period, both domestic and international shoppers enjoyed
various benefits, such as discounts offered in popular
shops and restaurants, as well as free gifts or free desserts.
By providing the Korean tourism economy with travel
spend data from Visas vast community of merchants,
cardholders and financial institutions, Visa will continue
to support Korea to promote itself as a Shopping Heaven
23
.
Visa is pleased to work with tourism officials to set a
benchmark to help evaluate the opportunities for growth
in the Korean tourism industry and help the industry
develop and strengthen its payment infrastructure to
meet the convenience and security needs of the modern
international traveller.
19
Includes general merchandise, contractors, confection, bakeries, home supply, lumber, paint, garden supply, clothing, software, music, wine/liquor, antiques,
bookstores, jewellery, toys, camera/photo supply, luggage/leather, glassware, cosmetics, newsstands, etc
20
Includes department stores, discount stores, furniture & equipment stores, miscellaneous specialty retail, other retail, radio, TV & stereo stores and sporting
goods stores
21
Time Magazine, What recession? Why stores in South Korea are packed, 8 April 2009
22
China Daily, Chinese visitors boost S Korea dept sales stores, 18 November 2010
23
Korea.net, 54-day-long Shopping Festival Seoul Grand Sale 2010, 15 July 2010
12
About VisaVue Travel Data
Launched in 2009, VisaVue Travel data is a
service offered by Visa Inc. that provides
government agencies, hotels, airlines and other
organizations within the tourism industry
unique insights into spending by international
visitors. VisaVue Travel data utilizes aggregate
international cardholder spending on Visa
debit, credit, commercial and prepaid cards to
help the tourism industry to analyze tourisms
economic contribution and tailor marketing,
promotional strategies and budgets based on
up-to-date visiting spending information.
The report features:
Analysis of tourism spending based on
country of origin
A detailed overview of tourism spending
across thousands of merchant categories
Visa is a valuable partner for the tourism
industry, providing tools and resources that
offer insight into how best to attract
international visitors and strengthen a
countrys tourism competitiveness. With a
network that connects 1.85 billion Visa cards
and the people who carry them with tens of
millions of merchant outlets and 1.8 million
ATMs around the world, Visa is in a unique
position to foster better understanding of
travelers mindsets and where and how they
spend their money when traveling abroad.
With VisaVue Travel data, Visa turns
transaction data into actionable information
that delivers value to countries and businesses
that rely on tourism revenues.
As at December 31, 2010, Visa processed more
than 71 billion transactions totaling more than
US$3.3 trillion (payments volume, $5.2 trillion
total volume), and it is clear that Visa payment
cards and services help power the global
economy and make payments faster, more
convenient, more reliable and more secure.
For more information regarding Visas
partnership with the tourism industry and
VisaVue spending data referenced, contact
globalmedia@visa.com.
13
Travelling with Visa
Visa cardholders benefit from secure,
convenient and reliable access to their funds,
with the ability to use digital currency at tens
of millions of merchant locations and 1.8
million ATMs in more than 200 countries and
territories. Carrying a Visa card is safer than
carrying cash if a Visa card is lost or stolen, it
can easily be blocked and replaced, unlike cash,
which is gone forever.

Top Tips For Using Cards Abroad
Before leaving:
Check the expiry date on your Visa card
Tell your bank you will be using your card
abroad
Photocopy your card and passport, but keep
the photocopies separate
Check with the bank that issued your Visa
card to see if it offers any extra benefits
such as travel insurance or a money-back
guarantee if something goes wrong with
a purchase
Note down the number of Visas Global
Customer Assistance Service (GCAS), a
global support network for cardholders that is
available 24 hours a day, seven days a week,
every day of the year. Cardholders can call
GCAS free from anywhere in the world, using
one of 550 telephone numbers

When abroad:
When you pay with your Visa card, check the
information on the terminal or sales voucher
before you sign or enter your PIN
There is no need to worry about complicated
currency conversions because the amount is
calculated automatically at a competitive rate
and deducted from your account in the usual
way. In addition, items purchased with Visa
Platinum and Visa Infinite cards are covered
by purchase protection insurance
Visa cards are a global currency, so it does
not matter if you have a chip-based or a
magnetic stripe-only card you can use it
anywhere. If you have a Visa chip card, you
may be asked to provide a signature instead
of a PIN by a merchant abroad
Occasionally in countries where transactions
normally involve a PIN, magnetic stripe
cardholders may be asked for a PIN rather
than a signature, so make sure you know the
PIN for any card you plan to use while
travelling. You can always reapply for a new
PIN from your bank if you have lost it
In some countries, some merchants offer
to make a currency conversion at point-of-
sale only do this if you are sure it offers a
good deal
Try not to keep cards and cash in the same
place - that way theres less chance of losing
everything if something does happen
Withdrawing cash in another country is
exactly the same as it is at home you use
the same card and PIN but the machine will
dispense local currency. If you want to take
out money abroad for taxis or tipping, you
can locate the nearest ATM by using the
ATM locator available on www.visa.com
Report a lost or stolen card to your bank
immediately to stop all card transactions
13
Tourism Outlook: South Korea