SEOUL, Feb. 8 (Yonhap) -- A recent surge in the number of Chinese tourists with deep pocketbooks is proving to be a great boon for South Korea's major retailers as they are increasingly flexing their financial muscle here, market watchers say.
The number of Chinese visitors to South Korea has increased an average of 20 percent annually since the 2008 global financial crisis on the back of China's impressive economic growth.
According to data by the Korea National Tourism Organization (KNTO), South Korea's state-run tourism agency, the number of Chinese travelers to South Korea stood at 1.88 million in 2010, up 40 percent from 1.34 million the previous year. The comparable figure for 2012 reached 2.84 million, up 27.5 percent from 2.22 million a year ago.
"The number of people who can travel abroad has soared in China in recent years as China's economic growth rate of 7-8 percent sharply raised per-capita disposable income," said Ryu Han-sun, head of KNTO's Chinese team.
Also fueling the jump in Chinese tourists are geographic proximity and a boom in Korean pop culture, known as "hallyu," in China, he said.
In addition, the dispute between Japan and China over islands in the East China Sea has led Chinese tourists to opt for South Korea over Japan, another market watcher said.
Ahead of Lunar New Year's Day, which falls on Sunday, South Korean retailers and tourism organizations are busy preparing for a flood of Chinese travelers who have a weeklong holiday next week, market watchers said.
Chinese travelers flock to South Korea during China's three major holidays -- Lunar New Year's Day, Labor Day in May and National Day in October.
For Lunar New Year's Day and National Day, the surrounding work days are rearranged to give Chinese people seven consecutive days off, known as "Golden Weeks."
Lunar New Year's Day, also referred to as "the Spring Festival" in China, is the most important celebration under the lunar calendar in Asian countries, which celebrate the start of new life and the season of ploughing and sowing. This year, the holiday goes from Feb. 9-15 in China.
According to the Ministry of Culture, Sports and Tourism, the number of Chinese tourists visiting South Korea is expected to reach 63,000 during the holiday, up 25 percent from 50,400 during last year's Lunar New Year holiday.
Market analysts predict that Chinese visitors will spend at least 100 billion won (US$92 million) in South Korea during the holiday.
In preparation for receiving Chinese tourists, the ministry and the KNTO are inspecting tourism facilities, mainly hotel accommodations, in Seoul. The ministry will also crack down on shops that rip off tourists, illegal operation of taxis and unqualified tour guides.
In hopes of a sharp rise in their sales during the holiday, three South Korean department store chains -- Lotte, Shinsegae and Hyundai -- are gearing up to welcome Chinese tourists.
The local retailers saw their sales surge in October last year thanks to heavy spending by Chinese tourists who visited South Korea for the weeklong National Day. During the period, 125,000 Chinese tourists visited the country and spent 270 billion won.
Lotte covered the windows of its stores with photos of popular K-pop group Girls' Generation and stickers bearing greetings in Chinese to ramp up the holiday atmosphere.
At its stores in downtown Seoul and Busan, the country's second-largest city, it plans to present a gift card worth 1.5 million won and one night free hotel vouchers to Chinese tourists who will be chosen by lottery.
The department store chain will also post more than 10 Chinese interpreters on the first floor of its main store in Seoul's shopping mecca of Myeongdong.
"Sales from Chinese tourists stood at about 170 billion won last year, taking up nearly 10 percent of revenue at our main store in Myeongdong," said Kim Kun-soo, a spokesman at Lotte. He also said that Chinese travelers started emerging as big shoppers in 2007-2008.
A Chinese couple shops for souvenirs at the main store of Lotte Department Store in Seoul. (Yonhap file photo)
Shinsegae, Lotte's smaller rival, has a plan to attract Chinese customers by holding cultural performances at its main store in Myeongdong. During the holiday period, Shinsegae will provide Chinese tourists opportunities to experience Korean folk games including "neolttwigi," a jumping game similar to seesaw.
Hyundai plans to give an additional 5 percent discount to Chinese shoppers who use a UnionPay card issued by China UnionPay (CUP), a Chinese state-run bank card service provider, at its main store in Seoul's tony Apgujeong district.
Shilla Duty Free, South Korea's No. 2 duty-free chain operator, will focus its marketing strategy for Chinese travelers on the sale of top-of-the-line watches.
"Sales of high-end watches to Chinese tourists were up 91 percent last year from a year ago," said an official at the duty-free shop, adding that the sales growth of watches is expected to sharply rise during the upcoming holiday.
In order to lure more Chinese travelers, the South Korean government streamlined procedures to issue visas for Chinese starting on Aug. 1, 2010. They also can travel the country's southernmost resort of Jeju for 30 days without a visa.
"Convenient immigration procedures, cheaper and high-end medical services, and the high popularity of Korean pop culture have combined to help attract Chinese tourists to South Korea," said Hong Jong-gil, an analyst from Korea Investment and Securities Co.