Where Did 10 Trillion Won from Foreign Tourists Go?... Beyond Duty-Free Stores to Dermatology Clinics, Top Restaurants, and Experience-Based Activities

Despite the Tourism Boom, Stock Price Performance Varies by Sector
Travel -2.6% vs. Duty-free and Retail -38.3%

Foreign Visitors Surpass 10.71 Million and Card Spending Tops 10 Trillion Won
Duty-Free Per Capita Purchase Down 15%

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In the first half of this year, the number of foreign tourists reached 10.71 million, and credit card spending by those visitors amounted to 10 trillion won, illustrating that the Korean tourism sector is undoubtedly booming. However, average spending per person at duty-free shops actually decreased. Instead, wallets opened wider for skincare, accommodations, food and beverages, and various experiences. As tourist spending patterns have shifted away from relying on travel agencies and duty-free shops to being dispersed across platforms and independent travel routes, stock performance among listed tourism-related sectors has also diverged sharply. In short, the 'main channels of tourist spending' in Korean tourism are changing.

Foreign tourists enjoying shopping in Myeongdong, Seoul. Photo by Yonhap News

According to the Korea Culture and Tourism Institute on August 24, among tourism-related listed companies in July, the travel sector index fell by 2.6% from the previous month, while the duty-free and wholesale/retail-related sector dropped by 38.3%. Hotels (-8.5%), airlines and rental cars (-6.0%), casinos (-8.9%), and theme parks (-17.2%) also declined, but the extent of the decline varied significantly by sector. The Tourism Industry Stock Index (TS-30), which the institute calculates by grouping 30 listed tourism and related industry companies, fell 18.3% during the same period. The institute analyzed that an overall market adjustment in the domestic stock market also contributed to the index’s decline.

However, the tourism market itself has not contracted. In the first half of this year, 10.71 million foreigners visited Korea—a 21.3% increase compared to the same period last year. In June alone, 1,993,128 foreign visitors arrived in Korea, a 23.1% increase from the previous year. Foreign tourists spent a total of 10.0389 trillion won on their cards in the first half, up 50.8% year-on-year. The growth in spending was more than twice as fast as the increase in tourist numbers. Korea also recorded a tourism balance surplus of $596.6 million in June, marking a fourth consecutive month in surplus.

The issue lies not in 'how much' tourists spent, but 'where' they spent it. According to BC Card’s analysis of approximately 3.3 million foreign-issued cards used in the first half, the amount spent rose 53.6% year-on-year, and the number of transactions grew by 40.3%. By sector, the transaction growth rates were the highest for experiences and leisure at 121.7%, followed by medical services at 75.3%, food and beverages at 58.1%, transportation at 56.5%, and accommodation at 36.1%. Shopping also increased by 31.4%, but at a slower rate than those categories.

Spending toward medical services and K-beauty in particular has surged. During the first half, foreigners’ expenditure on medical services jumped 98% from the previous year, with spending on skincare soaring by 109.8%. The share of skincare in total foreign medical consumption also climbed from 32.6% to 67.5% over the past three years. Consumption at pharmacies and for traditional Korean medicine also increased significantly. Instead of simply sightseeing and shopping, tourists are increasingly opting for 'multi-purpose trips' that combine medical, beauty, and lifestyle experiences unique to Korea.

Conversely, duty-free shops have shown completely different signals. In June, the number of foreigners using domestic duty-free shops reached 1,279,206, up 31.9% year-on-year. Sales from foreign customers grew 11.6% to 917.6 billion won. However, the pace of customer growth outstripped that of sales, resulting in a 15.4% drop in per-person purchases among foreigners to approximately 717,000 won per person. This appears to be due to a weakening in high-volume purchases previously dominant at duty-free shops, coinciding with a diversification of purchase locations among independent travelers.

July Stock Price Trends by Industry in the Tourism Sector. The overall Tourism Industry TS-30 index for July by the Korea Culture and Tourism Institute fell by 18.3% compared to the previous month. By industry, duty-free shops and wholesale/retail-related sectors dropped the most, declining by 38.3%, followed by theme parks (-17.2%), casinos (-8.9%), hotels (-8.5%), airlines and rental cars (-6.0%), and travel (-2.6%). Source: Korea Culture and Tourism Institute

This does not mean foreign tourists are abandoning duty-free shops. In fact, total duty-free sales are increasing. What is crucial, however, is that the growth of duty-free shops lags behind the broader increase in tourist numbers and overall tourist spending. In the first half, while inbound tourists rose by 21.3% and tourist card spending soared by 50.8%, per capita spending at duty-free shops fell. Analysts interpret this as tourist overspending being dispersed among various household services, rather than concentrating on one or two traditional sectors.

Changes in travel modes are transforming tourist spending routes. The prevalence of purchasing package tours and following travel agency itineraries is fading, replaced by a rise in free independent travelers (FIT) who now book flights and hotels directly through online platforms. Even after arriving in Korea, tourists are no longer confined to duty-free shopping; their spending is spread out among restaurants, cafes, skincare clinics, pharmacies, performances, and experience-based attractions. The BC Card analysis also found that the number of foreign card transactions rose by 57.9% in Busan and 63.7% in Jeju, demonstrating that spending is spreading out geographically as well.

Such differences are also reflected in the stock performance of tourism-related companies. While the travel sector saw only a modest drop in July, the duty-free and wholesale/retail sectors suffered steeper declines. Since various causes—including overall stock market adjustment, company-specific business structure, and regulatory factors—were at play, stock performance alone does not capture the full state of the tourism industry. Still, the recent changes in consumer patterns show that increases in tourist arrivals and spending do not automatically and uniformly benefit traditional tourism industry segments such as travel agencies and duty-free shops.

Song Suyeop, a research fellow at the Korea Culture and Tourism Institute, stated, "The starting point of travel consumption has shifted from travel agencies to online platforms, and as independent tourists directly book airfare and accommodations, spending is spread out to a wider range of places, leading to a decrease in the flow of money into traditional tourism companies. Since COVID-19, these changes have accelerated further, weakening the previous structure where increased tourist arrivals and spending consistently concentrated benefits on travel agencies and duty-free shops."

This content was produced with the assistance of AI translation services.