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Dwindling South Korean tourists hurting Japan’s small businesses

Take the winding streets of Tokyo’s fashionable district of Omotesando every day and see South Korean young women take selfies or take pictures of their logo covered coffee cups.

But in the past couple of months, behind this familiar scene, employees in these coffee shops saw another picture–a decrease in visits from Japan’s neighbour in the background of a spiralling bilateral dispute that has not yet come to an end.

The romantic, rustic atmosphere of Shozo Coffee‘s Commune 246 store is a flat wooden building that reflects its origins in the rural town of Nasu, Prefecture of Tochigi. The speciality is scones, along with drip coffee.

Typically, Koreans comprised about 40% of the shop’s customers, staffer Noriko Kogure said, making them the largest group of foreign visitors.

Since Blue Bottle Coffee, a high-end California-based chain, opened a branch next door, they began flocking there, she said. The unique appearance of the café then made it an “Instagrammable” spot, with word of mouth digitally distributed among Korean visitors.

In 2018, Koreans represented approximately a quarter of Japan’s foreign visitors and spent 588 billion yen (5.5 billion dollars). They were only second to mainland Chinese, who made up 27%.

Bilateral relations have deteriorated sharply since, during the Japanese colonial rule of the Korea Peninsula, the South Korean Supreme Court forced two Japanese companies last year to pay for wartime labour.

The debate, which became a trade-related phenomenon, led to cancellations or cuts in flights between cities in both countries, causing damage to tourism in Japan.

In spite of being in the upscale district of Omotesando, Shozo Coffee’s Commune 246 has a cosy, rustic feel. KYODO The fall was sometimes significant for Shozo Coffee, which once had approximately 50 groups of customers from South Korea a day.

“There have been days when only one South Korean customer group was issued,” said Kogure.

An online survey of about 530 South Korean tourists, from 23 Aug. to 2 Sept., showed that 69.3 per cent had cancelled trips to Japan from the Korea Culture & Tourism Institute, the government’s think tank in Seoul. Of these, 93.2% cited tense relations as the explanation, while 36.1% said that they want to continue travelling to Japan if relationships improve.

For regions where Koreans make up the lion’s share of tourists, the effect is even more important outside of Tokyo.

Tsushima was especially hit halfway between Kyushu and the Korean Peninsula. The island in Nagasaki Prefecture can be reached in about an hour by high-speed ferry from Busan, with 75 per cent of all tourists coming from all over the country.

Last year, nearly 410,000 Korean visitors visited the island, which has a population of 30,000. In 2017, they spent approximately 7.94 billion dollars.

Nearly half of the island’s 25 essential accommodation facilities reported occupancy rates falling by 50% to 90% in July as compared to last year.

The figures for August also plummeted, with ferry services cancelled or decreased as passenger numbers declined.

A hotel located about 5 minutes walk from the port of Hitakatsu, which most South Korean tourists come to the island, announced that in July they received about 170 cancellations.

“We still have visitors, but tour group bookings are almost nil, and half of our rooms are empty. Who knows how long it’s going to last?”The 29-year-old Korean staff member lamented.

In front of the harbour, a café with empty seats targeted at South Korean visitors.

“In the three years since the cafe started, I have been so safe every day for the first time,” said employee Hiromi Hara, 46.

The Japan Tourism Agency recently reported that South Korean visitors to Japan dropped 48.0 per cent from a year earlier to 308,700 in August. It fell just 2.2 per cent, despite total tourism estimates.

“It’s a little quiet. It’s a political matter, but ordinary Koreans dislike Japan not. They can’t come just because flights are less or because of the general mood, “said Keisuke Maehara, owner of the all-natural caramel store in Tokyo’s Omotesando neighbourhood, Number Sugar.

In the past two months, South Koreans account for about 20 per cent of the shop’s customers and around 70 per cent of foreign customers, he says.

In South Koreans the shop has drawn mainly for its hallmark–a plain yet stylishly packed range of 12 varieties of caramel sweets. Instagram also features snaps of the square white box and its painted ribbon.

“If they’re Korean or Japanese, it only makes me happy to see people enjoy our candy,” Maehara added that he looks forward to the return of South Koreans.

The effect on Nuts Tokyo, a café based on the concept of healthy and nutritious nuts, was not so apparent in the trendy Hiroo neighbourhood.

While South Korean tourists make 20 to 40% of customers, attracted to the signature peanut butter sandwich which is limited to 15 portions per day.

“There was no improvement whatsoever,” said a staff member.

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