Japanese tourists party through the night in Korea as late-night card spending jumps 70%

Deoksugung Palace at night [Korea Tourism Organization]

Japanese tourists visiting South Korea are shifting away from group tours and budget shopping in major cities, increasingly opting for smaller regional destinations and personalized experiences — a trend analysts say signals new growth potential for the Korean tourism market.

Visa, the global payments technology company, released an analysis of spending data and consumption trends among Korean and Japanese travelers.

Korea has firmly established itself as a top destination for Japanese travelers. Japanese Visa card spending in Korea during Japan's Golden Week holiday in May rose about 60 percent compared with the weekly average over the preceding year. Data from global online travel platform Expedia showed flight searches from Japan to Korea climbed 15 percent compared with the same Golden Week period last year, while hotel searches for Korea on Hotels.com rose 30 percent year on year.

Gwangalli Beach in Busan at night [Korea Tourism Organization]

Japanese visitors are venturing well beyond the Greater Seoul area. While spending in the metropolitan area — Seoul, Incheon and Gyeonggi Province — rose about 55 percent year on year, card transactions in coastal and island regions such as Busan, Jeju and Gangwon Province jumped roughly 145 percent over the same period. Flight searches from Japan to Cheongju also surged 780 percent year on year, according to Expedia, underscoring growing demand for regional travel. The shift away from the capital region suggests local tourism could become a genuine engine of growth.

Spending patterns have also moved away from value-driven shopping toward experience- and taste-led consumption. Shopping transactions by Japanese visitors during Golden Week rose about 55 percent year on year. Growing demand for K-beauty and fashion pushed spending at upscale retailers, including department stores, up roughly 60 percent. The average amount spent per dining transaction climbed about 25 percent. Late-night card spending — driven by visits to late-night eateries, performances and clubs — jumped around 70 percent, while premium card transactions surged about 95 percent compared with the previous year. The data point to the need for a strategic pivot toward high-value experiential content such as local gastronomy and nightlife.

Contactless payments — tapping a card or smartphone against a terminal, known as Tap to Pay — have also expanded significantly. Contactless spending by Japanese visitors in Korea grew about 80 percent year on year, outpacing the roughly 55 percent growth recorded for contact-based payments. Increased visits to street stalls and independent cafes helped push spending growth at small merchants to about 80 percent, ahead of the roughly 55 percent recorded at large retailers. Small merchants that adopted contactless payment saw their transaction volumes grow more than twice as fast as those that had not. Analysts said building a digital payment infrastructure in neighborhood commercial districts could drive foreign visitor spending and lift real sales for small-business owners.

The findings also highlighted the need for an open-loop transit payment system — one that allows both domestic and foreign cards to be used on public transportation. Korea remains in the early stages of open-loop adoption, and Japanese visitors used contactless transit payments at just one-quarter the rate of Korean visitors to Japan. Analysts said expanding foreign-card-based open transit payment networks is urgent to lower barriers to regional travel and extend visitors' reach across the country.

"As the number of travelers between Korea and Japan hits record highs, we are seeing a new travel trend — visitors exploring back-street commercial districts in smaller cities and opening their wallets for experiences that match their personal tastes," Patrick Story, president of Visa Korea, said. "The payment environment that lets travelers use a familiar card conveniently — from public transit to neighborhood restaurants — has become more important than ever."

Meanwhile, Korean travelers visiting Japan are showing similar preferences for smaller cities and contactless payments. Japan topped the list of destinations Koreans most want to visit, at 38.5 percent, according to the Visa survey. Korean card spending in Japanese cities outside Tokyo, Osaka and Fukuoka rose about 40 percent, with Shizuoka and Yamaguchi each posting gains of roughly 55 percent. Some 70 percent of Korean visitors to Japan used Tap to Pay at least once, and contactless transit payments grew about 40 percent.

terry@heraldcorp.com