Can South Korea Reduce its Tourism Deficit?

“Enjoy Myeongdong for the shopping, the buzz, the people-watching, but not the gimmicky street food. Lobster with cheese is not a Korean meal I grew up with.”

Ray, our guide to the Demilitarised Zone – which has divided North and South Korea since the Korean War armistice was signed in 1953 – is stood in the aisle of the tour coach fielding questions for an Ask Me Anything session on the road back to Seoul. For the multinational audience, including tourists from China, India, Malaysia, Australia and Canada, he has just defined four of Seoul’s prime tourism assets; elevated views into Communist North Korea set against the cosmetic consumerism, cuisines and pop culture of Myeongdong.

I first visited the Myeongdong shopping district on an icy winter’s evening in 2006. Middle-aged Chinese women were weaving between the street food vendors to buy skin-beautifying creams endorsed by the stars of South Korea’s popular soap operas. Two decades later, I returned to find a younger, commercially savvy demographic. Professional shoppers, or daigou in Chinese, from across Asia drag suitcases through the pedestrianised streets filled with dermo-cosmetic products bought to order for clients, colleagues and friends, and to re-sell on social commerce apps. Many are livestreaming and talking into microphones.

Amid the pulsing K-pop beats blaring from storefronts and video-board imagery of Korean TV and pop stars, one name stands out. If you want to know which PDRN hydrating serum, collagen eye mask and peptide skin booster brands are trending, head to Olive Young – which has an outlet on almost every street.

Inside these temples of Korean skincare cool, the retail chain’s app members run through order checklists on their phones and collect free gifts for buying in bulk. The mercantile trail doesn’t end there. A few days later as I prepared to fly back to Malaysia, I discovered why 249 is a hallowed code for cosmetic tourists. It is the gate number at Incheon Airport where sales tax rebates are dispensed to foreign shoppers.

The 30:20 Tourism Conundrum

While Myeongdong is the epicentre of K-beauty culture, and is accredited with influencing tourists from across Asia and worldwide to visit Seoul, President Lee Jae Myung isn’t satisfied. He believes the visitor economy is under-performing, and cites Japan as a model to follow for tourism expansion. South Korea attracted a record 18.7 million visitors in 2025, but Japan more than doubled that total, with its own annual record of 42.7 million visitors.

Further inflaming President Lee’s ire is a widening tourism deficit. South Koreans are shelling out more money each year while overseas than foreign tourists spend in the country. In 2025, the difference between outbound outlays and inbound tourism income was US$10.76 billion (approx. NZ$17 million), a third straight year that the deficit surpassed US$10 billion. Now, in 2026, the ratio “30:20” is being discussed in tourism and economic circles. For the first time in a single year, South Korea could witness 30 million outbound departures by its citizens, and 20 million inbound arrivals. In this context, the financial calculous of tourism is a red-hot topic.

To stem the fiscal gap, the President has taken matters into his own hands. In February, he chaired – a role usually undertaken by the Prime Minister – the first National Tourism Strategy Meeting since 2019. He brought forward the nation’s goal of 30 million visitors to 2030, and said the entire travel industry must pursue an “end to end” review of everything from regional airport connectivity to liberalised visa procedures. By reappraising tourism from “the demand side,” or travellers’ perspective, South Korea can eschew the restrictive supply-side lenses through which tourism boards often view their visitor economies.

Central to cutting the outbound-inbound tourism deficit is to “boldly expand the horizons of tourism across the entirety of the Republic of Korea.” The President says 80% of foreign tourists “are concentrated on Seoul” and do not explore the nation’s diverse attractions. In turn, therefore regional tourism businesses are unable to optimise their potential.

Although not part of the deficit reduction plan, South Korea could benefit – as Japan has since the pandemic – from tourists being enticed by a weak currency. On 16 March, the Won briefly fell to its lowest level against the US dollar for 17 years. This makes face masks, bibimbaps and K-pop video location tours cheaper for visitors, but renders overseas travel more expensive for South Koreans. With the Middle East war causing global uncertainty, South Korea may also attract more Asian tourists staying within the region rather than venturing long-haul.

Navigating Beyond Seoul

Tourism dispersal is a familiar challenge in Asia, but South Korea has a unique tool at its disposal. It is one of only four Asian nations with a high-speed rail network. The lightning fork-shaped inter-city rail map connects Seoul with Iksan, Ulsan, Gwangju and the coastal cities of Mokpo and Busan. Overland travel is proving increasingly popular with Asian tourists, and South Korea’s bullet trains are considered among the world’s best.

Last October, the historic southeastern city of Gyeongju hosted the 2025 Asia-Pacific Economic Cooperation (APEC) Summit, and it is using this legacy to build its profile for business conventions. For Chinese tourists, a themed tour is being curated of locations President Xi Jinping visited during the summit, including a museum and local store.

On the southeast coast, South Korea’s second city, Busan, is preparing for its time in the spotlight. In 2028, it will become the 11th World Design Capital recognised for using design to “drive economic, social, cultural and environmental development.” Previous title holders include Seoul, Helsinki, Cape Town and Mexico City. Events will be held at venues, such as the former mayoral residence and a cement factory, repurposed as arts and cultural spaces.

Tourists seeking to escape to nature head for the southern island of Jeju. Reunited pop megastars BTS and Jeju Jazz have teamed up for a series of documentary-style destination videos. Among them is a slow-paced journey through Jeju’s revivifying rhythms, replete with clifftop piano playing, spring blossoms, a young couple enjoying a bucolic scooter ride and the sweet orange fruits made famous by the 2025 TV series When life gives you tangerines.

And, of course, cities beyond Seoul want to tap into the K-wellness boom. Rather than replicating regional mini-Myeongdongs, the government is providing up to KRW1.35 billion in funding to six cities – Daegu, Busan, Incheon, Gangwon, Jeonbuk and Chungbuk – to forge their own wellbeing identities. Daegu and Busan will focus on medi-wellness, Gangwon on organic sleep treatments, and Jeongbuk on dietary healing using local fermented ingredients.

Bringing it all together is a new era for mobile mapping. A common tourist complaint is that Naver Maps is hard to navigate because the app was designed for local user preferences. Last month, the government agreed to permit Google access to its high-precision map data for the first time in 19 years. This opens the way for tourists to use Google Maps to travel and spend their way around South Korea – and contribute to cutting that troublesome deficit.

 -Asia Media Centre