In Q1 2025, Korea welcomed the highest number of foreign tourists in its history, surpassing pre-pandemic levels. However, the tourism balance recorded a deficit of $3.3 billion, highlighting a structural issue where the increase in tourist arrivals does not translate into proportional revenue gains. According to the “Q1 2025 Inbound and Outbound Tourism Performance” report released by Yanolja Research (Director: SooCheong Jang) on May 22, the total number of foreign visitors reached 3.87 million, up 13.7% year-on-year and 0.7% above the same period in 2019, indicating a full recovery in volume.
Despite the rebound in arrivals, tourism revenue remained at $3.78 billion, which is 23.8% lower than Q1 2019 ($4.96 billion). The average spending per visitor was $976, down 24.4% from 2019’s $1,290, signaling that growth in headcount alone does not equate to profitability.
Inbound Tourist Volume & Tourism Revenue Trends (Unit: million visitors, billion USD)
One of the main factors delaying revenue recovery was the surge in cruise tourists. In Q1 2025, 7.4% of foreign visitors entered Korea via cruise ships, a sharp rise from 0.7% in 2019. However, cruise travelers tend to have short stays and limited high-value spending (on lodging, F&B, and shopping), offering minimal local economic benefit.
Duty-free sales to foreign visitors dropped from $4.09 billion in 2019 to $1.59 billion in 2025, largely due to reduced spending by Chinese tourists and shifts in consumption patterns.
Regionally, Asian visitors made up 81.0% of the total inbound market (about 3.14 million), but the recovery rate remained at 98.1% of 2019 levels — falling short of full recovery. Notably, Chinese arrivals reached 1.33 million, only 84% of Q1 2019’s figure (1.6 million).
In contrast, long-haul markets showed strong recovery:
Taiwan saw remarkable growth, with 395,000 visitors, rising over 40% year-on-year and overtaking the U.S. to become Korea’s third-largest inbound market. Notably, more than 38% of Taiwanese visitors entered through regional airports (Gimhae, Jeju, Daegu), driven by a balanced route mix between Korean and foreign airlines.
Yanolja Research Senior Researcher DC Seo pointed to bottlenecks in air supply as a constraint on Asian inbound recovery:
“Many regional airports lack direct flights from key Asian countries. For Japan, the absence of direct, scheduled flights from Japanese carriers to regional airports means inbound traffic is overly dependent on Korean airlines,
reinforcing a capital-region-centric recovery that weakens broader market rebound.”
Outbound tourism also showed strong recovery. In Q1 2025, 7.8 million Koreans traveled abroad — reaching 99.1% of Q1 2019 levels (7.87 million).
Top outbound destinations included:
However, travel to some destinations remained subdued compared to pre-pandemic levels:
Outbound travel spending reached $7.08 billion, nearly matching Q1 2019’s $7.19 billion. Average spending per Korean traveler was $908, close to 2019’s $914.
As a result, Korea’s tourism balance posted a $3.3 billion deficit, widening by more than 50% from the $2.23 billion deficit in Q1 2019 — despite inbound recovery. This indicates a structural imbalance in Korea’s tourism revenue model.
Korea’s Tourism Balance Over Time (Unit: billion USD)
Senior Researcher Suckwon Hong of Yanolja Research stated, “Q1 2025 results show that while demand is recovering, revenue is not keeping pace. Quantitative recovery alone cannot sustain the tourism industry — we need a qualitative shift that extends stays and boosts spending.”
He added, “To improve the tourism balance, we must enhance regional access through diversified air infrastructure based on regional airports and develop high-value tourism offerings that deliver premium experiences.”
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