Photo/IllutrationStaff at the tax refund counter of Hakata Daimaru Inc.'s Fukuoka Tenjin outlet serve fewer customers from South Korea. (Kazumi Tako)

  • Photo/Illustraion
  • Photo/Illustraion

A large drop in spending by South Korean visitors following Japan's strengthening of controls of exports to its neighbor, is inflicting significant economic loss on Japan's sightseeing and retail industries.

Japanese companies are also being kept busy working to address boycott campaigns of their products in South Korea.

“I like Japanese sightseeing spots. But I came to hate Japan due to the conflict,” said a 20-year-old South Korean referring to Japan's decision in early July to strengthen export control of materials to produce semiconductors.

The woman was on her way home after spending two nights at the famed Yufuin hot spring resort in Oita Prefecture with two friends and was waiting at the Port of Hakata in Fukuoka’s Hakata Ward for the JR Kyushu Beetle Jet Ferry, to make the three-hour trip to Busan, South Korea.

She said she nearly canceled her trip to Japan due to the tense political situation.

The woman said she was harshly criticized by a friend after she posted photos she had taken during her trip on a social networking site.

Tokyo announced on July 1 that it would strengthen controls on exports to South Korea of high-tech materials for semiconductors.

Since then, the number of South Korean travelers coming to Japan using JTB Corp., a leading Japanese travel agency, has dropped since July 1 by about 10 percent, compared with the same period a year ago.

“It looks like the political situation has started to adversely affect (our industry),” said a JTB official.

Last year, 7.53 million South Koreans visited Japan, accounting for 24 percent of all foreign tourists, and second only to Chinese, according to the Japan National Tourism Organization.

South Koreans spent a whopping 588.1 billion yen ($5.44 billion), which was bested only by Chinese visitors.

Their spending accounted for 13 percent of total outlays by all foreign visitors in 2018.

Shock waves from the current dive in spending have hit a wide range of tourist-related fields.

Reservations by South Koreans for the Beetle Jet Ferry have plummeted since July 1.

“If this situation continues, there might be more negative consequences,” said Kyushu Railway Co. President Toshihiko Aoyagi.

South Korean low-cost carrier T'way Air is incrementally suspending flight operations on some routes between Japanese cities such as Kumamoto, Saga or Oita, and South Korea, through Oct. 26.

Another South Korean carrier, Korea Express Air, which in June began operating charter flights connecting Izumo, Shimane Prefecture, and Gimpo in Seoul, has suspended services since July 13.

“I've heard that (the flights were canceled) due to the political situation,” said an official of the Shimane prefectural government.

In mid-July, the Oita prefectural government polled 24 traditional ryokan inns or hotels that typically accommodate numerous South Korean visitors. The facilities said a total of 1,100 would-be travelers had canceled their reservations since the crisis flared.

The prefecture has many popular "onsen" hot spring spots, including those at Yufuin and Beppu.

A hotel in the Nanba district in Osaka noted that South Korean travelers started canceling their reservations late last week and that the number of those making new reservations is down.

The hotel said it was stunned to see the situation had "deteriorated to such an extent."

Retailers have also been feeling the pinch.

Hakata Daimaru Inc.'s Fukuoka Tenjin outlet said sales were down 25 percent during the week up to July 23 compared with the same period last year.

On July 11, the outlet started allowing customers to use Kakao Pay, a smartphone payment service popular with South Koreans. But it received a cool reception.

Boycott campaigns of Japanese products in South Korea are squeezing a number of major Japanese firms. Asahi Breweries Ltd. and Kirin Brewery Co. voluntarily pulled their TV ads in the country. Fast Retailing Co., which operates 187 Uniqlo outlets in South Korea, also reported falling sales in July.

South Koreans residing in Japan are being hurt by the crisis as well.

Customers are down by half at Kopan, a Korean restaurant at the international terminal of the Port of Hakata, which is typically packed with South Korean visitors about to return home.

Son Jong-min, the manager of the eatery, said, “Those having a hard time are just ordinary people, not politicians.”

While Tokyo insists its export curbs are not a direct retaliatory measure to anything done by South Korea, it explained that the decision was implemented after Seoul failed to meet an end of June deadline set by Tokyo to present a proposal for resolving the long-standing dispute involving South Korean judicial rulings ordering Japanese companies to pay compensation to wartime Korean workers.

(This article was written by Keiichi Kitagawa, Yasuyuki Onaya and Yuji Yamashita.)