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China HOT TOPIC


CHINA CALLS THE SHOTS


The Chinese market to South Korea collapsed after a travel warning, but other destinations have benefited instead WORDS: EDWARD ROBERTSON


A


ttempts to woo the Chinese market can be quickly and effectively undermined by


geopolitical issues. Laurens van den Oever, CMO at


scheduled flight data analysts ForwardKeys, says the ongoing Terminal High Altitude Area Defence System (Thaad) missile crisis in South Korea reveals the speed at which the market can collapse. However, he adds one destination’s issue


can provide opportunities for others, as analysis of flight booking data reveals. The Thaad missile crisis really took off in


March when work started in South Korea to implement the system that is intended to shoot down missiles from neighbouring North Korea, which is developing a nuclear arsenal of intercontinental missiles. The building of the system has angered


China’s officials who are concerned of its radar’s impact on their own military security. They are also concerned the missiles’ installation upsets the balance of power in the region as well as threatening the country’s own sphere of influence in the area.


Travel warning


While the impact has been felt at many different levels, van den Oever says the effect on the travel market has been almost instantaneous as the China National Tourism Administration issued a warning against travelling to South Korea in March. He adds that in 2016, South Korea’s inbound international traveller numbers grew by 25.3%, prompting an 11% capacity increase between the two countries. However, the growth quickly fell


apart once the crisis kicked in, with data


revealing that the total international market shrank by 28.5% in the first seven months of the year. This was driven by Chinese travellers as the entire international market was only down 0.5% once they are taken out of the equation. It was also reflected by a 19% fall in flight capacity between the two countries. Nor is the immediate future looking any


brighter. The data, which was compiled at the end of July, shows that forward bookings for South Korea from August to December have fallen by 31.5% in total, but only by 9.3% once the Chinese market is taken out of the equation. Flight capacity is also down by 18% for the rest of the year.


w


Bongeunsa Temple, Seoul


safety warning on Chinese


10 20 30


-40 -30 -20 -10 0


CHINA TO SOUTH KOREA FLIGHT CAPACITY


25.3% 16.1%


travelling to South Korea


-0.5%


■ International ■ Excl. China


-28.5% 2016 2017 Jan-Jul -31.5%


2017 forecast Aug-Dec


-9.3%


Effect of


+11%


Security is being stepped up


-19% Statistics provided by ForwardKeys


-18%


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