Why South Korea Travel Boom Hits Hotels But Slams Outbound Tours: Inbound Surge, Outbound Freeze in 2025

Published on December 8, 2025

In 2025, the tourism sector in South Korea is at a crossroads. The weak Korean won (KRW) against the US dollar (USD) has resulted in a significant divide between two key segments of the tourism industry. On the one hand, inbound tourism, foreign visitors arriving in South Korea, has increased as the weaker won makes the country more accessible to international travellers. Hotels and inbound tour operators are experiencing a surge in business, capitalising on the influx of visitors. On the other hand, outbound travel, South Koreans travelling abroad, is experiencing one of its most difficult winters in years. With the US dollar weakening, foreign travel has become more expensive, resulting in a drop in outbound bookings and significant financial strain on travel agencies.

This market divide reflects a fundamental shift in how currency fluctuations affect tourism dynamics, with foreign visitors finding South Korea more appealing and South Koreans reducing their international travel due to rising costs. As a result, South Korea’s tourism industry has divided into two distinct narratives, with inbound tourism thriving and outbound tourism struggling.

Inbound Tourism Soars: The Weak Won’s Positive Impact

For inbound tourism, the weak won has acted as a tailwind, making South Korea a more affordable destination for foreign travellers. In 2024, South Korea saw a substantial increase in international arrivals, with the total number of visitors climbing by nearly 50% over the previous year. The favourable exchange rate has made it cheaper for tourists from countries like the United States, Taiwan, and Japan to visit, providing a welcome boost to South Korea’s hospitality industry. Hotels, guesthouses, and inbound tour operators have benefitted significantly from this surge, with bookings for accommodation and tours reaching pre-pandemic levels.

This has been especially beneficial for operators catering to budget-conscious travellers. With the weaker won, foreigners can enjoy a higher standard of accommodation and a wider range of experiences at a lower cost. This includes everything from sightseeing tours and cultural activities to dining and shopping, all of which have become more affordable for visitors. As a result, inbound operators are reporting increased demand for their services, and the hospitality sector is seeing high occupancy rates, particularly in major cities like Seoul, Busan, and Incheon.

However, while the volume of visitors has risen, spending per tourist remains relatively subdued. Despite the increased number of arrivals, many foreign visitors are prioritising more affordable travel options, such as budget accommodation and local experiences, rather than high-end shopping or luxury services. This shift in spending habits, partly influenced by the weak won, has kept the overall economic impact of inbound tourism lower than expected.

Outbound Tourism Slows: Rising Costs for Korean Travellers

In contrast to the booming inbound sector, outbound tourism in South Korea is facing a tough period. The weak won has made international travel more expensive for South Koreans, particularly when travelling to countries with stronger currencies like the United States, Europe, or Australia. Flights, accommodation, and general travel expenses have all risen as a result of the unfavourable exchange rate, making overseas vacations less affordable for many Koreans.

As a result, outbound travel agencies have seen a significant decline in bookings, especially for long-haul international destinations. South Koreans, traditionally avid travellers, have been more cautious with their travel plans, opting for more budget-friendly alternatives or staying within the country. The high cost of foreign travel has led many to reconsider their holiday plans, reducing the number of overseas trips taken in 2025.

Travel agencies that specialise in outbound tourism are facing a challenging winter, with fewer customers booking international trips. In addition to the currency-related price hikes, outbound agencies are also dealing with supply-side constraints such as limited flight availability, particularly to popular long-haul destinations. The result is a “double squeeze” for outbound travel agencies — declining demand due to the higher costs of foreign travel and operational challenges in delivering competitive international travel packages.

The Economic Impact of the Split: Volume vs. Value

The divergence in the fortunes of inbound and outbound tourism highlights an underlying issue within South Korea’s tourism economy: the reliance on volume rather than value. While the number of inbound tourists is on the rise, their spending per visit remains relatively low, which limits the overall economic benefit to the country. This is especially true in comparison to outbound tourism, where South Koreans continue to spend large sums abroad despite the currency challenges.

The tourism sector’s reliance on inbound volume — rather than high-value tourism — has become evident in recent years. While attracting more visitors is a positive trend, it is crucial that South Korea shifts its focus towards high-value tourists who will contribute more to the economy through extended stays, premium experiences, shopping, and cultural activities. A focus on quality over quantity could help mitigate the impact of the weak won and ensure a more sustainable tourism model.

Adapting to the New Normal: Strategies for South Korea’s Tourism Industry

To address these challenges, the South Korean government and tourism industry stakeholders must rethink their strategies. For the inbound sector, the priority should be to target high-value tourists — those who are willing to spend more on premium services and extended stays. The government and operators could develop packages that cater specifically to luxury travellers, cultural tourists, and those seeking unique local experiences.

Expanding tourism beyond Seoul could also be an effective strategy. Cities like Jeju, Gyeongju, and Jeonju offer rich cultural heritage and natural beauty that could attract longer stays and higher spending. Regional tourism development could help balance the tourism economy by spreading the benefits of travel across the country and ensuring that smaller cities and rural areas also see an influx of tourists.

For outbound travel agencies, diversification will be key. Agencies may need to pivot towards offering more domestic travel packages or regional getaways that remain affordable despite the currency challenges. Additionally, agencies could focus on providing more cost-effective options for international travel, such as discounted group tours, off-season packages, and flexible travel plans.

The Path Forward: Balancing Inbound and Outbound Tourism

The weak won has clearly created a two-tier tourism market in South Korea, with inbound tourism growing while outbound travel suffers. As the tourism industry expands, it will be critical to strike a balance between attracting a large number of inbound tourists and increasing their spending per visit. Furthermore, outbound agencies must adapt to changing economic conditions by providing more affordable and flexible travel options.

Finally, South Korea’s tourism industry must evolve to meet the demands of the current economic climate. By focussing on value-driven tourism and diversifying offerings for both inbound and outbound travellers, the country can navigate this period of currency volatility while ensuring long-term growth and sustainability in its tourism sector..