Duty-free shops and hotels in South Korea are beginning to feel the pain from a sudden drop in Chinese customers following a travel ban by Beijing, one of a series of trade restrictions in apparent protest against Seoul's stationing of a US anti-missile system, industry sources said Tuesday.

Chinese travel agencies have stopped selling group tours to Korea since March 15 upon the authorities' order. The cruises run by the neighboring country have also been banned from making stopovers at South Korean ports, with Chinese airlines forced to cut back their Korea-bound services at the behest of the Beijing government. 

Tourism-related businesses here said that the repercussions are spreading fast, with sales from the first weekend after the travel ban plummeting from a year earlier.

Lotte Duty Free saw its sales slide 25 percent from March 18-19 compared to the same time last year, according to the company.

It is a serious blow to the country's No. 1 duty-free store given that it had maintained a steady growth of about 20 percent on an annual basis in the year to date, the firm said.

"The (ban of) group tours have affected (the sales)," a Lotte Duty Free official said.

Revenues at its rival Shilla Duty Free also declined more than 20 percent on-year, with those from Hanwha Galleria duty free plunging around 30 percent over the cited period, according to the companies.

"We're trying to diversify the customer portfolio to Southeast Asia and other countries, but it takes time to bring a tangible result," a Galleria official said.
HDC Shilla, a latecomer in the industry, said its sales fell over 30 percent in the same period. Shinsegae Duty Free also saw its sales sink about 35 percent.

Hotels in Seoul's key tourist districts and local travel agencies are also bearing the brunt of the drop in the number of Chinese visitors.

One hotel based in Myeongdong said it has lost about 30 percent of Chinese guests compared to the average. "We are expecting it to get worse in April and going forward." (Yonhap)