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The Impacts of Tourism on Seoul, Republic of Korea

Updated on November 25, 2017
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Hanh has a Master's Degree in Economics. She spent six years studying and working in the United States.

Seoul, the City by Han River
Seoul, the City by Han River

I. Introduction

Seoul has been the capital city and the heart of South Korea’s politics, economy, trade and education with a fascinating history of more than two thousand years. In recent years, Seoul has also gained attention as an emerging travel destination, boasting as a great place for shoppers, food lovers, adventurers, and even business people who search for some fun and relaxation besides work. The case study report aims to analyse Seoul’s tourist visitation and the city’s key tourism potentials. A discussion about issues associated with tourism and destination development, and tourism’s positive and negative impacts on Seoul will be followed. The report concludes by making some policy recommendations to achieve sustainable tourism outcomes for Seoul.

II. Analysis of tourist visitation in Seoul

Since 1990, the number of visitors arrivals to Seoul has consistently increased despite some temporary setbacks in such periods as 2006 – 2008 due to the global economic recession. According to the statistics of the Korea Tourism Organisation, in 2016, there were 17,241,823 visitor arrivals to Seoul, an increase of 30.3% compared to that of 2015, and doubling the amount of visitors to Seoul in 2010(South Korea Tourist Arrivals , 2017).

Yearly number of visitor arrivals in Seoul
Yearly number of visitor arrivals in Seoul | Source

Regarding the home countries of visitors, among visitors to Seoul in 2016, China had the greatest number of travelers, 8,067,722, accounting for 48% of visitor arrivals to Seoul in 2015, followed by Japan with 2,297,893 visitors (13.3% of total visitor arrivals), the United States of America with 866,186 visitors (5% of total visitor arrivals), Taiwan with 833,465 visitors (4.8% of total visitor arrivals), and Hong Kong with 650,676 visitors (3.8% of total visitor arrivals) ( Seoul Statistical Tables, 2017). In terms of regions, 85% of visitors to Seoul came from East Asia and the Pacific region; 6.5% came from Americas; and 5.5% came from Europe; the rest are from other parts of the world. As for genders of visitors, Seoul seems to be more popular with females who made up for more than 53% of total visitors. Approximately 22% of visitors to Seoul aged from 21 – 30 years old; 19.6% of them were in their 30s; and 15% of them aged between 40 and 50 years old ( Seoul Statistical Tables, 2017).

Regarding the purposes of the travel, although travelling and relaxation are still the main reasons for visitors to come to Seoul with more than 80% of travelers going on tours, Seoul also becomes more and more well-known as a destination for businesspeople with 187,507 people arriving in Seoul for business purposes.

Unit: USD 1,000
Unit: USD 1,000

In terms of tourism receipts, since 1990, the total tourism revenue has also shown an increasing trend, regardless of some declines in such years as 1991 – 1993, 2003, 2004, etc., reaching over USD 17 billion in 2016. Similarly, tourism expenditures also have a growing tendency, peaking at more than USD 23 billion in 2016 (Korea, Monthly Statistics of Tourism, 2017).

Korean guards in traditional costumes
Korean guards in traditional costumes

III. Destination attractiveness

In order to explain why a particular location is attractive to tourists, there exists various factors influencing tourists’ behaviours. Utilising factor analyses and regression analysis to find out the dimensions of the destination properties, tourist motivations and tourist satisfaction, Meng, Tepasol and Uysal (2008) found that friendliness, high quality services and quality of accommodation remain important factors in impacting tourists’ overall satisfaction. In addition, local cuisine and location of the destination are also one of the criteria travelers use to evaluate their destination. As for travel motivation, being able to have quality time with their family is the leading reason why tourists choose to stay at a resort (Meng, Tepasol, & Uysal, 2008). Taking a different approach to examine factors that motivate tourist to choose to travel to a more exotic destination, Azmi and Marzuki (2015) compiled empirical data by surveying tourists in Penang, Malaysia, and built multiple regression analysis. The authors identified three push factors – which are escaping, relaxation and relationship building, and status and safety – and three pull factors – which are the beauty of nature, amenities, and management and safety. In addition, demographics and individual characteristics affect tourists’ choice of location (Azmi & Marzuki, 2015). Kozak and Rimmington (1998) summarised that the attractiveness of a destination depending on the quality of five components: attractions (including weather, natural sceneries, culture, cuisine, etc.), facilities and services of accommodation providers, transportation system, entertainment, shopping centers, and so on, infrastructure (road system, communication networks, utility, etc.), hospitality and cost (Kozak & Rimmington, 1998).

Gwanghwamun square where visitors can explore Seoul's history, traditional architecture and breathtaking scenery
Gwanghwamun square where visitors can explore Seoul's history, traditional architecture and breathtaking scenery

As for Seoul, the city possesses almost all characteristics to become a magnet for tourist attractions. It has a long tradition of more than two thousand years and exciting Asian culture, cuisine, festivals and traditions, blending with the new elements of the Korean Wave culture (Benckendorff, Moscardo, & D., 2009). Being one of the most modern cities in the world, Seoul features world-class infrastructure with a comprehensive road systems, waterways, subway, and two international airports – Incheon International and Gimpo International. The city also offers all kinds of accommodation, ranking from five star, internationally – recognised brands such as JW Marriott, InterContinental, Hilton, Grand Hyatt, and Sheraton to hostels and dormitory – style hostels for backpackers. Seoul is also bestowed with many natural beauties such as mountains, rivers, streams, forests, and ecological parks. With a population of more than 50.22 million people, life in Seoul is vibrant and invigorating, attracting tourists of all ages to visit and experience.

A modern Seoul
A modern Seoul

IV. Issues related to tourism and destination development

Economic factors

There are several issues facing the tourism industry in general, and in Seoul in particular. First, in terms of economic factors, demand for tourism is highly income- elastic, meaning that when income increases, people tend to travel more, and when income decreases, people will cut down on their travel budget (Li, Li, & Hudson, 2013). As estimated by the International Monetary Fund, in 2017, although the world economy shows signs of continued growth, the rate of growth would remain very modest, hovering around a meager growth rate of only 2.7% (Global Economic Prospects: Weak Investment in Uncertain Times, 2017). Besides, the world economy is anticipated to be shaken by several political events such as Brexit (the withdrawal of UK from the EU), policies of many newly elected leaders such as the President of the United States, France, etc. Even in South Korea, a new President has just been elected to replace the former one. In addition, one point worth noticing is that China, the country that send the most visitors to Seoul, is expected to face with another slow growing year due to its unstable political conditions, financial market volatility, low inbound and outbound investment, and market saturation (UNCTAD, 2017). In light of these economic uncertainties, Seoul’s tourism can expect to see some setbacks in this year and the coming time. In fact, the number of visitor arrivals in Seoul in the first 3 month of 2017 has decreased compared to that of the same period in 2016 (South Korea Tourist Arrivals , 2017).

Seoul's vibrancy makes it more popular with young travellers
Seoul's vibrancy makes it more popular with young travellers

Social factors

Second, regarding social factors, generational factor remains one of the most widely used factors to identify location attractiveness attribute and tourist motivation in tourism and hospitality industry (Benckendorff, Moscardo, & D., 2009). The generational change is happening around the world with Baby Boomer retreating, replacing by Generation X and Generation Y. Although all of the generations show similar fondness for travelling as a means of leisure, they differ widely when it comes to the choices of travel destinations, means of transportation, sources of information, and specific entertainment activities (Li, Li, & Hudson, 2013). Another generational difference is their use of technology and preferred methods of obtaining information and review regarding their travel destinations. For example, while older generations tend to rely on traditional information source such as television, books, and travel guides, younger generations spend their time surfing the Internet, reading forum posts and comments to learn about their destinations (Scarles & Lester, 2014). Though thanks to its diverse tourism products, Seoul can serve a wide range of tourists, more than half of tourists to Seoul are younger than 40 years old. With the generational shift occurring, Seoul might experience lower visitor arrival growth in the near future.

Bukhansan National Park in the northern of Seoul is one of a few places in Seoul where visitors can get back to nature
Bukhansan National Park in the northern of Seoul is one of a few places in Seoul where visitors can get back to nature

Environmental factors

Third, as for environmental factors, customers now put green consumerism and ethical business practice the top priority in the location selection criteria (Miller, 2003). Therefore, destinations that are known to be environmentally friendly, promote environmentally responsible behaviours, and make great efforts to protect their natural environment are preferred choices among travelers. Furthermore, environmental regulations have also been made much more stringent worldwide, requiring businesses operating in the tourism and hospitality industry to cut down on their carbon footprint, greenhouse gas emission, and increase energy efficiency. Moreover, in the wake of environmental consciousness, eco-tourism also gains popularity among travelers who highly value environmental quality and understand their roles in advancing environmental quality standards (Kotler, Bowen, & Makens, 2014). Therefore, locations that offer eco-tourism products are also of higher demand. In this sense, Seoul is a metropolitan area, so though it offers some limited ecotourism products, ecotourism is not particularly the city’s strength.

Tourists pay increasingly more attention to security
Tourists pay increasingly more attention to security

Safety and security

Fourth, safety and security are of great concerns for the tourism industry. In the last twenty years, safety and security issues have gained much greater attention due to tremendous changes in the world. With the constant threats of terrorist acts, local and regional wars, natural disasters, and disease epidemics, security has considerably lowered, negatively influencing the travel and tourism industry, discouraging many potential travelers and raising the costs of travelling (Hall, Timothy, & Duval, 2012). While South Korea is generally considered a safe country, and Seoul ranks very highly among the safest cities in the world (Hana, 2016), Seoul might still suffer from this sentiment of insecurity. Although tourism is hoped to be able to reduce future conflicts among countries, the impacts of tourism on global security is incremental and marginal (Hall, Timothy, & Duval, 2012).

V. Impacts of tourism on Seoul

For decades, tourism industry growth has been a major contributor to increased economic activity throughout the world (Kotler, Bowen, & Makens, 2014). Nonetheless, the impacts of tourism are more far reaching than what most people are aware of. The impacts of tourism can be classified into seven major groups including economic, environmental, social and cultural, services, state budget contribution, and perception of the community (Kreag, 2001).

Boosting local economy

First, tourism can contribute greatly to a destination’s economy. Tourists come to a place and bring their money to spend, which transform into sales and profits for companies, tax revenues for the government, and income for workers. The sectors that directly benefit from tourism include lodging, restaurants, transportation, entertainment, and retail trade. Through secondary effects, tourism further influence other sectors of the economy such as finance and banking, construction, education, etc, creating jobs, generating revenues, and contributing to the location’s tax receipts (Wall & Mathieson, 2006). As for Seoul, the city has received enormous economic gains from its tourism sector. According to the 2014 Global Destination Cities Index, Seoul was among top 10 Destination Cities by International Overnight Visitors, who spent more than USD 11 billion in Seoul (Hedrick-Wong & Choong, 2014). In addition, tourism motivates the development of supporting infrastructure and related investment. For example, when South Korea cohosted the 2002 World Cup in 2002, a new Sangam Stadium was built in Seoul and the city also welcomed a surge in the number of visitors that year (Seoul World Cup Stadium, 2017).

Seoul's Olympic Park
Seoul's Olympic Park

Driving positive social changes

Second, tourism also have social impacts on the local community. Social impacts are defined as the voluntary or involuntary changes to the quality of life, values, bahaviours, relationships, and morales of the local people as a result of the interactions between people in the host community and tourists (Wall & Mathieson, 2006). In other words, they are the effects on the people of host communities who have direct and indirect associations with tourists. Some potential positive social impacts might include enhanced local pride, preservation and spread of local culture, more interesting things to do or improved justice. Potential negative social impacts can be an increase in delinquent behaviours, corruption, negative changes in local people’s ideologies, or characteristics, and interruption of daily life (Wall & Mathieson, 2006). In case of Seoul, a positive impact that can be observed is the spread of Korean culture, especially K-pop and the Korean Wave, around the world. On the other hand, it is inevitable that tourists cause some disturbance to the everyday life of local people.

Tourism can negatively impact Seoul's environment
Tourism can negatively impact Seoul's environment

Preserving nature and wildlife

Finally, while some people might argue that tourism leads to better preservation of the nature, the main product of tourism, it is undoubtedly that tourism places strain on the environment and its quality. If the level of usage of environmental resources is greater than their carrying capacity, the negative impacts of tourism will take place. Uncontrolled traditional types of tourism which focuses only on exploiting the nature of tourism put pressure on an area and lead to effects such as pollution, untreated discharges into the waterway, loss of biodiversity and natural habitat, and the disappearance of many species (GhulamRabbany, Afrin, Rahman, Islam, & Hoque, 2013). Although Seoul’s government has initiated many programmes to enhance the city’s sustainability such as Cheonggyecheon Stream Restoration, electric buses, green building developments, etc., the high number of visitors visiting the city each year unfortunately negatively impact its environment such as causing air and water pollution, loss of green space, etc (Simes, 2011).

Overall, in your opinion, how tourism affects Seoul?

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Seoul at night
Seoul at night

VI. Policy Implications

Since tourism plays an important part in the economy of Seoul, it is crucial for the government to act and improve its legal framework as well as implement policies and incentives to encourage this industry to develop in a sustainable manner.

Encouraging businesses to adopt sustainable practices

First, the government can consider encourage businesses operating in the field of tourism and hospitality to implement the Global Sustainable Tourism Criteria or an equivalent one to ensure that they perform sustainability the standard practice using among all tourism service providers around the world. This criteria recommends the minimum criteria that any tourism business should reach in four major categories including effective sustainability planning, social and economic benefit creation, cultural heritage improvement and environmental protection (Global Sustainable Tourism Criteria for Hotels and Tour Operators, 2013). It can host an annual award ceremony to compliment, honor, and give recognition and/or money award to the businesses that have the most innovative initiates to improve its sustainable operation. Since most businesses and people respond to motivation (Levesque, 2014), such an award can prompt more businesses to take action and protect the environment.

Emphasizing sustainability as Seoul's competitive advantage

Second, in the overall tourism development planning for the city, Seoul can highlight the importance of sustainable tourism and promote sustainability as one of its location attractiveness to draw more travelers to the city. In order to do so, it should support the development of eco-tourism in the city, taking advantage of its current natural settings. Third, the city government can provide incentives for projects that bring about benefits for the environment, preserve the local eco-system, culture and heritage. The incentives can be in forms of tax reduction, subsidies, or other human resource supports.

Tightening environmental regulations

Finally, the government should tighten its regulations to punish companies that engage in unethical business practices such as abusing natural resources, destroying local heritage or illegally trading forbidden items.

Invest in Seoul

Bibliography

Seoul Statistical Tables. (2017). Retrieved from Seoul Metropolitan Government: http://stat.seoul.go.kr/octagonweb/jsp/WWS7/WWSDS7100.jsp

Azmi, N. b., & Marzuki, A. b. (2015). Tourist motivation in highland destination: Case study in Penang Hill, Malaysia. Tourismos, 10(2), 41-78.

Benckendorff, P., Moscardo, G., & D., P. (Eds.). (2009). Tourism and Generation Y. CABI.

GhulamRabbany, Afrin, Rahman, Islam, & Hoque. (2013). Environmental effects of tourism. American Journal of Environment, Energy and Power Research.

(2017). Global Economic Prospects: Weak Investment in Uncertain Times. Washington, DC: The World Bank Group.

Global Sustainable Tourism Criteria for Hotels and Tour Operators. (2013). Global Sustainable Tourism Council.

Hall, C., Timothy, D., & Duval, D. (2012). Safety and Security in Tourism: Relationships, Management, and Marketing. Routledge.

Hana, L. (2016, February). Travel. Retrieved from Korea.net: http://www.korea.net/NewsFocus/Travel/view?articleId=132461

Hedrick-Wong, & Choong. (2014). MasterCard 2014 Global Destination Cities Index. MasterCard Worldwide Insights .

Korea, Monthly Statistics of Tourism. (2017). Retrieved from Korea Tourism Organisation: https://kto.visitkorea.or.kr/eng/tourismStatics/keyFacts/KoreaMonthlyStatistics.kto

Kotler, Bowen, & Makens. (2014). Marketing for hospitality and tourism (6th ed.). Pearson Higher Education.

Kozak, & Rimmington. (1998). Benchmarking: destination attractiveness and small hospitality business performance. International Journal of Contemporary Hospitality management, 184–188.

Kreag, G. (2001, April). The Impacts ofTourism. Retrieved from http://www.seagrant.umn.edu/tourism/pdfs/ImpactsTourism.pdf

Levesque, R. (Ed.). (2014). Intrinsic and Extrinsic Motivation. Springer New York.

Li, X., Li, X., & Hudson, S. (2013). The application of generational theory to tourism consumer behavior: An American perspective. Tourism Management, 147–164.

Meng, Tepasol, & Uysal. (2008). Measuring tourist satisfaction by attribute and motivation: The case of a nature-based resort. Journal of Vacation Marketing, 14(1).

Miller, G. (2003). Consumerism in Sustainable Tourism: A Survey of UK Consumers. Journal of Sustainable Tourism , 17-39 .

O’Connor, P. (2008). User-Generated Content and Travel: A Case Study on Tripadvisor.Com. Information and Communication Technologies in Tourism 2008 (pp. 47-58). Vienna: Springer.

Scarles, C., & Lester (Eds.). (2014). Mediating the Tourist Experience: From Brochures to Virtual Encounters. Ashgate.

Seoul World Cup Stadium. (2017). Retrieved from The Guide to the World's Football Stadiums: http://www.stadiumguide.com/seoulworldcupstadium/

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