BUSAN — Busan's tourism industry has grown more confident about a recovery in the fourth quarter, helped by an increase in foreign visitors. Revenue, profitability and expectations for both domestic and foreign arrivals all came in well above the neutral threshold, though companies point to a chronic shortage of workers as the biggest obstacle to growth.
The Busan Tourism Organization released the results of its third-quarter business survey of the city's tourism industry on the 13th, based on responses from 455 local tourism companies.
Fourth-quarter readings on the business survey index, where 100 marks the neutral line, stood at 119.3 for revenue, 123.1 for profitability, 114.7 for domestic visitors and 133.0 for foreign visitors, far above 100 in every category. All four measures also rose sharply from the previous quarter's outlook — revenue by 7.9 points, profitability by 13.7 points, domestic visitors by 11.7 points and foreign visitors by 4.3 points.
The reading for foreign visitors, at 133.0, was the highest of all the indicators, marking it as the key driver of Busan's tourism market heading into the end of the year. Some 46.4% of respondents expected foreign arrivals to increase, far outnumbering the 31.2% who said the same for domestic travelers. For the domestic market, a majority of 52.3% said conditions would be little changed, pointing to a wait-and-see mood, while expectations for the inbound market reflected hopes of a stronger rebound.
Revenue and profitability also showed clear improvement. Those expecting revenue to rise in the fourth quarter accounted for 38.5%, more than double the 19.1% who forecast a slowdown. The share predicting better profitability rose 8.1 percentage points from the third quarter to 38.9%, raising hopes of a more fundamental improvement in business conditions.
Behind the brighter earnings outlook, however, lies the persistent problem of labor shortages. Respondents named "labor shortages and rising wage costs" as their biggest business difficulty, at 18.5%, while 29.7% described their staffing as insufficient, nearly unchanged from 29.9% the previous quarter and still at a serious level. That has raised concerns that on-site staffing may not be able to keep up with demand opened up by the influx of foreign visitors.
The industry is calling for policy support from the public sector. Respondents cited "developing competitive tourism content" at 29.5% and "support for fostering tourism companies" at 21.5% as the tasks the Busan Tourism Organization should prioritize.
"Along with diversifying our efforts to attract foreign tourists, we will push ahead without delay on content development that reflects voices from the field and on programs to strengthen corporate competitiveness, so that the industry can feel a real recovery in its business," an official at the Busan Tourism Organization said.