KCCI said the visitors' spending also shrank from an average of $1,247 in 2014 to $991 last year. Just as serious is their travel itinerary, which is concentrated in Seoul and the southern island of Jeju, the report said. Last year, the proportion of foreign visitors coming to Seoul and Jeju was 98.2 percent, up from 89.9 percent in 2011.

"The external trouble points for South Korea's tourism industry can recur at any time," the report said. "While we get ready for an increase in the number of Chinese visitors, we have to continue our efforts to diversify the market and to change the basic structure of the market."

KCCI specifically proposed allowing visa-free entry to people coming from India and Southeast Asia. It took as example measures by Japan, which from 2014 allowed entry without visas for travelers from Indonesia who hold e-passports. Taiwan, likewise, has adopted a visa-free system for visitors from the Philippines from this month.

"We need to apply the visa waiver system to Indonesia, the Philippines and other Southeast Asian nations," the report said.

"It would be worth doing the same for India, which is a rising market."

The business group also recommended easing regulatory limits for private translator guides who work outside of institutions.

These private service providers need state certification, must have an office and have a minimum of 200 million won ($179,291) in capital in order to work independently.

Another recommendation was to develop attractive travel destinations at locations other than Seoul and Jeju.

An itinerary focused on winter sports would be appealing to tourists from the Middle East and Southeast Asia, KCCI said. There also should be uniquely developed content for an ecological park out of Korea's demilitarized zone and other securities surroundings, it said. (Yonhap)