North Korean Dictator Kim Jong-un, keeping an eye on the neighbours. His nuclear tests have scared away tourists.

South Korea’s tourism industry is in deep trouble with the nuclear threat of North Korea hitting visitor numbers hard, especially from the key Chinese market.

Meanwhile,  a hotel building boom has resulted in an incredible 369,000 hotels rooms coming online over the past two years. “Demand is not nearly keeping pace partly due to geopolitical tension in the region,” says industry data company STR.

These two factors have smashed hotel room rates and yields.

STR says room rates have fallen for 36 consecutive months, while in the third quarter revenue per available room plummeted 14.6%,  occupancy plunged 9.4% and average daily rate dropped 5.7%.

“Group business has seen a noticeable decline, specifically with Chinese travelers,” STR analysts noted.

“Given the volatility of the export balance with China as its biggest trade partner, South Korea is likely to fall back from its 17 million international arrivals in 2016, of which China accounted for nearly half.

“Through the first seven months of 2017, travelers from mainland China were almost halved in year-over-year comparisons, according to the Korea Tourism Organization.”

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