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THAAD Row Continues to Harm South Korean Tourism Market

| Apr 28, 2017 08:47 AM EDT

South Korean conglomerate Lotte has been badly hit by China's sanctions due to the THAAD issue.

South Korea is learning that it shouldn’t mess with China the hard way as the country’s tourism industry continues to experience a decline, according to a report by CNN.

Many experts believe that Chinese authorities have ordered Chinese travel agencies to cancel tours and trips to South Korea as a response to the presence of a U.S.-made missile defense system in the country.

The result is a 40 percent drop in Chinese visitors to South Korea last March, based on data from the Korea Tourism Organization.

“There’s been a big reduction in the number of groups of Chinese tourists in Seoul since the THAAD missile crisis,” Kil Ki-yon, director of Seoul Tiger Bus, told CNN in an interview.

Businesses that usually benefit from the huge numbers of Chinese tourists to South Korea are also suffering. One of these companies is giant conglomerate Lotte.

According to CNN, sales from Lotte’s duty-free stores have decreased by 40 percent between mid-March and mid-April. Chinese tourists come into the picture as the group tends to make up at least 40 percent of duty-free sales, as told by a Lotte spokesman.

The situation is unfortunate for South Korea as China is experiencing a significant increase in outbound travel, mostly fueled by China’s growing middle class.

In 2016 alone, Chinese tourists spent a total of $261 billion, which represents a 12 percent increase from 2015, according to the World Tourism Organization.

As of now, experts believe that South Korea’s airports will most likely not welcome any Chinese tourists. Tensions between China and South Korea over the THAAD issue show no signs of abating, especially now that the South Korean Defense Ministry announced the arrival of system parts at a planned deployment site.

In response to the announcement, the Chinese Foreign Ministry released an official statement, saying, “China will firmly take necessary measures to safeguard its own interests.”

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