SEOUL • South Korea is bracing itself for leaner returns during the May Day holiday next week, with less than rosy projections of visitor numbers from China and Japan.
Visitors from the two countries had previously taken advantage of an extended May Day holiday period to visit South Korea, giving a boost to the latter's economy, which is suffering from weak domestic demand.
But industry watchers fear that an ongoing diplomatic row with China and fears over the North Korean nuclear threat would put off visitors, said South Korea's Yonhap news agency.
Unhappy with South Korea's decision to deploy an American missile defence system on a site south of Seoul, Beijing has imposed curbs on goods and services from South Korea, as well as Chinese tours to the country.
As a result, the number of Chinese tourists to South Korea dropped 39.4 per cent last month from a year ago, South Korea's Ministry of Culture, Sports and Tourism said.
As for Japanese visitors, a previous increase has been nipped as a result of escalating tension on the Korean peninsula, with fears that North Korea is preparing for another nuclear test.
The tourism ministry's tally showed an increase of about 20 per cent in Japanese visitors from February up to early April over last year, but this fell to 2 to 3 per cent after tension spiked, Yonhap reported.
Tokyo had also fanned worries by warning its citizens about developments in Korea.
"There is a tendency for Japanese media to exaggerate the situation on the Korean peninsula, and Japanese travellers seem to be postponing their trips because they are concerned," a ministry official said.
South Korea's duty-free businesses are highly reliant on high-spending travellers from its two Asian neighbours.
With the decline in Chinese shoppers, who account for more than 70 per cent of clients, these stores have tried to court Japanese customers instead.
Sales from Chinese shoppers have fallen by 40 per cent since mid-March after group tours were banned. But the increase from Japanese customers, who tend to take individual trips and not group tours, was just 1 per cent, said industry officials.