September 26, 2022 10:42
Tourists have returned to Korea's shopping districts after the coronavirus pandemic, driven by the weak Korean won.
In August some 335,058 foreigners visited Korea, and although that is still just one-fifth of the number in August 2019, it is up four times from January this year.
Duty-free shops have been among the main beneficiaries. Shilla Duty Free saw foreign customer numbers rise from 2,000 in July to 3,000 in August and September thanks to an increase in visitors from Vietnam, Indonesia, the Philippines and Thailand. Lotte Duty Free said customers from Southeast Asia increased from just 20 in February to 1,220 last month.
Hotel occupancy is rising apace. At Lotte Hotel the foreign occupancy rate, which stood at 80 percent before the pandemic, dropped to 20 percent in 2021 but recovered to the 60 percent level this month. At Hotel Shilla occupancy recovered to some 20 percent in August after plunging to just three percent in 2021.
In some department stores sales to tourists have already returned to pre-pandemic levels. Hyundai Department Store said sales generated by tourists in the first eight months of this year rose five percent compared to the same period of 2019. Purchases by tourists rose from just 37,000 in January and February to 140,000 in July and August.
Sales at the flagship stores of Lotte and Shinsegae department stores rose fourfold and twofold since January.
The biggest pull is the weak won, which makes Korea a shoppers' paradise. At the start of this year, US$100 was worth W110,000, but now it is worth W140,000. The Korean currency has weakened significantly more than the euro, yuan and Southeast Asian and Latin American currencies.
The rebound has revived major shopping districts in Seoul, such as Myeong-dong, Itaewon, Apgujeong-dong and Sinsa-dong. Retail spaces that emptied during the pandemic are starting to fill up again. Cosmetics shops and accessories stores are starting to reopen, especially on Sinsa-dong's upscale Garuso-gil.
According to realtors Cushman and Wakefield, the vacancy rates of six major shopping districts in Seoul including Myeong-dong, Itaewon and Sinsa-dong fell for two straight quarters. "Cosmetics road shops and fashion boutiques in Myeong-dong have started to reopen," a staffer said. "Demand is rising now the tourists are coming back."
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