May 23, 2015 08:19
Tourists queued for more than 50 m to wait for their VAT refunds in front of the customs desk on the third floor of Incheon International Airport on Thursday afternoon. They only report their purchases and get a stamp there, which they then have to present at the refund window inside the departure area.
Do other countries manage the red tape better? A Korean office worker who visited Japan last month on business, bought an Apple Watch for 50,000 yen in Shinjuku. "The store simply waived the seven-percent consumption tax for foreigners and stapled the receipt into my passport," he said. And it took just 10 seconds for a customs official at the airport to remove it.
This is just one example of the bureaucratic hassle that has prevented the Korean tourism industry from growing as rapidly as some hoped.
In contrast, Japan has seen a more than 40-percent rise in tourists this year. The inconvenient VAT refund process in Korea has been cited as one of the reasons why tourists think twice about returning.
The number of tourists visiting Korea rose from 6.8 million in 2008 to 14.2 million last year, but tourism-related infrastructure has not improved apace. In the mean time, Japan overtook Korea for the first time in seven years in attracting foreign tourists.
◆ Warning Signs
The Korea Tourism Organization said Wednesday that 1.38 million tourists visited Korea last month, up 11 percent from a year earlier. On the same day, the Japan National Tourist Organization said visitor numbers to the country rose 43 percent on-year to 1.76 million.
Japan has seen a dramatic increase in tourism since last November.
Per-capita spending by Chinese tourists, who have been propping up Korea's tourism industry in recent years, is falling. Experts said the inconvenient VAT refund system played a part.
Lotte Department Store said per-capita spending by Chinese tourists so far this year fell 11 percent on-year to W580,000 and 36 percent compared to the same period of 2013 (US$1=W1,094). Each Chinese tourist spent W800,000 at Lotte Duty Free Shop in the first quarter of this year, down 11 percent on-year.
◆ Japan Soars
The surge in the number of tourists to Japan stems not just from the weak yen. Since 2006, the Japanese government has been working with the business sector to attract more tourists. A prime example is the country's streamlined visa procedure. In September last year, Japan eased visa requirements for visitors from Indonesia, the Philippines and Vietnam. As a result, visitor numbers from those countries rose between 23 and 59 percent so far this year.
The government here also considered easing visa requirements for visitors from those three countries starting last year, but a failure to reach agreement between related ministries has prevented reforms so far.
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