The Nature Republic cosmetics store in the Myeong-dong shopping district in downtown Seoul has been an obligatory stop for Japanese women visiting Korea, but no longer. Until last summer, the place was crawling with Japanese tourists, but now most customers are Chinese.
The main culprit is the weak Japanese yen. According to the Korea Tourism Organization, the number of Japanese tourists in Korea stood at around 300,000 in September last year but dropped to 220,000 in December.
In contrast, the number of Korean tourists heading to Japan, which had plunged 32 percent in 2011 on-year just after the Tohoku earthquake, rose 21 percent at the end of 2012.
This trend is not restricted to tourism. The weak yen is affecting the financial, retail, manufacturing and hotel industries here as well.
Top-notch hotels in Gwanghwamun and Myeong-dong have seen a marked drop in the number of Japanese guests. The Westin Chosun saw a 20 percent on-year from September to December, and the Plaza Hotel a 25 percent drop.
Korean Air plans to suspend flights between Nagoya and Jeju Island until the end of next month. As the number of Japanese tourists dwindled, the passenger load fell 7 percent on-year in the fourth quarter of 2012.
"The weak yen and strong won are having a major impact on inbound tourism, and this trend is expected to last," said Asiana Airlines president Yoon Young-doo. Jeju Air has halted flights to and from Osaka for the same reason.
Retailers are also feeling the pinch. Sales of dried seaweed and cookies, which were favored by Japanese tourists, fell between 8 to 10 percent on-year.