Kickbacks, mandatory shopping threaten S.Korea, China tourism industries
Travel agencies and merchants in South Korea have been paying kickbacks to their Chinese partners in exchange for introducing more Chinese customers to them. Although Chinese tourists can get low-priced trips to South Korea, the situation makes for a poor experience as tour guides push clients to go shopping to maximize their own income. Experts say the practice is not unusual due to the short-term benefits it brings to the parties involved. But they also warn that the South Korean government needs to strengthen supervision over the industry because such practices will hurt the tourism industries in both countries and ultimately damage South Korea's image.
South Korea has been one of the hottest destinations for Chinese tourists in recent years. But some South Korean travel agencies and local merchants have undertaken shady business practices to attract tourists from China, South Korea's largest source of foreign tourists.
Experts said these practices could end up damaging the tourism industries in both countries.
In early March, for instance, a South Korean travel agency received a 20-person tourist group from its Chinese partner, a travel agency in Harbin, capital of Northeast China's Heilongjiang Province, according to a report on people.com.cn on Wednesday, which cited the Joong Ang Daily, a prestigious South Korean newspaper.
The travel agency charged the tourists only 900 yuan ($138.96) for their five-day trip to Seoul and Jeju Island. This price was low, far lower than even the round-trip air fare between Harbin and Seoul, according to the report.
The lowest price for one-way flight from Harbin to Seoul on April 6 (Wednesday) costs around 1,300 yuan, according to ctrip.com, China's largest online travel service provider.
People.com.cn reported that the South Korean travel agency paid 300 yuan per tourist to its Chinese partner for each one the latter introduced, but following typical practices, the South Korean travel agency must collect the payment from their Chinese partners for the tourists' accommodations, food and transportation costs in South Korea. The kickback paid by the South Korean travel agency allows the Chinese travel agency to be able to offer its customers a big discount.
"This kind of phenomenon has existed for some time, and it is not surprising for industry insiders," said Xing Yongfeng, head of Quyou Travel Agency in Shanghai.
"This phenomenon really exists in the industry, though it is not so extensive," a travel specialist with Ctrip, who wished to remain anonymous, said in an e-mail sent to the Global Times on Saturday.
Multiple causes
For Chinese travel agencies, they can easily reap profits by introducing tourists to South Korean travel agencies that are willing to pay referral fees. Some South Korean travel agencies pay as much as 700 yuan for each tourist that a Chinese partner introduces, according to the people.com.cn report.
"This practice can't be totally prevented because there is still market demand," Xing told the Global Times on Friday.
"Some Chinese tourists, especially elderly tourists, hold a lucky psychology and hope to enjoy a high-quality tourist experience while spending as little of their own money as possible," Xing noted.
