Itaewon, once a bustling neighborhood in Seoul crowded with locals and foreigners, has lost so many visitors that more than a third of its shops have had to close their doors.

The area, long known for its vibrant nightlife and international flair, had already grown quieter since the United States military started relocating to Pyeongtaek, Gyeonggi Province, but the situation got much worse with the onset of the COVID-19 pandemic.

The district lost much of its appeal as a tourist attraction in May 2020, when a cluster of more than 250 cases was traced to establishments there. Worries about catching the virus and coming under the authorities’ scrutiny prevented many from going near.

When The Korea Herald visited the area earlier this week, the damage was still visible. Almost no restaurants in the area had enough visitors for a waitlist.

Some restaurant employees were standing outside waving at people walking by, urging them to come in and grab something to eat. A few bars were bustling with customers, but they were strictly in the minority.

“We are open just in case a miracle happens and a flood of customers walk in for dinner,” the owner of a burger joint based in the district told The Korea Herald, asking for the restaurant’s name not to be published for fear of unwanted attention.

“Before COVID-19 there were always foreigners coming to my restaurant for burgers, and I had to put people on the waitlist, but that’s not the case anymore when I would feel lucky to serve 20 customers throughout the day.”

A similar story unfolded in the Myeong-dong neighborhood in Jung-gu, central Seoul. The best-known tourist destination in Seoul for shopping, dining and performances has lost most of its street vendors, and diners are struggling to fill more than a few tables every mealtime.

The area -- normally crowded with people of all national and ethnic backgrounds -- had just a few groups of workers from nearby office buildings walking around.

The situation is not all that different in other neighborhoods that depend heavily on foreign tourists. Shops in tourist districts have seen an unprecedented loss of income as the virus outbreak limited international travel for months and stopped many people from leaving their doorsteps.

Official data has yet to be compiled, but the Seoul Metropolitan Government projects that the number of foreign tourists dropped 86 percent to just 1.92 million people last year, from 13.9 million visitors in 2019.

“It is safe to say that everyone in these foreign tourist-heavy areas was hit hard by the pandemic,” a city government official with the tourism policy division told The Korea Herald.

“We have received a lot of calls and requests for support from those in these areas as businesses look to continue their line of work with a new batch of customers if possible.”

As the pandemic continued for more than a year, the vacancy rate for commercial real estate soared and these areas lost businesses as well as visitors.

According to the Korea Real Estate Board, the vacancy rate for medium-sized to large commercial real estate reached 38.4 percent for Myeong-dong, meaning more than a third of all shops in the area were empty.

The rate stood at 22.6 percent for Itaewon and 13.1 percent for Hongdae, the area near Hongik University, as opposed to 8.9 percent for Seoul as a whole.

Experts say that unless the COVID-19 pandemic ends, the trend is inevitably going to continue. Many suggest that tourist-oriented areas now turn their attention to locals with help from the government.

They ask the government to launch budget-backed campaigns in cooperation with the tourism sector to encourage people to travel locally. Areas traditionally dependent on foreigners are in greater danger, they add.

According to a report from the World Tourism Organization under the United Nations, the number of international tourist arrivals in the first half of 2020 dropped 65 percent from the same period a year earlier.

The organization projects that it will take 2 1/2 to four years for that number to recover to 2019 levels.

“To minimize the damage to the tourism sector, there is a need for vitalization of tourism activities among local visitors by creating demand for domestic tourism,” a report from the Korea Culture & Tourism Institute said in January.

“Especially in this stage, strategies are required to expand on domestic tourism initiatives already in place, considering the urgent need for policy support as a temporary solution.”

Starting this month, the Seoul city government is providing discount coupons and gift cards for goods and services within its special tourist districts, including Itaewon and Myeong-dong, in an effort to revitalize the areas.

A city government official with the tourism policy division said Seoul was preparing more budget-backed support measures to attract more local visitors to these areas. These measures will be officially launched next year, she said.

“We are not considering measures targeting individual types of businesses, but we are looking to generate more traffic to these areas that depended on foreign travelers as a means to help them recover from losses made since the pandemic started,” the official said.

“And we are also revisiting our policies on foreign visitors to ensure these areas are revitalized even further when international travel is boosted again after the pandemic.”

Thankfully, signs of change are already in sight, at least in Itaewon, according to merchants there. While business still isn’t as good as before, the number of visitors seems to have increased, they say, as businesses increasingly cater to locals.

“We are surely recovering when compared to last year,” said Maeng Ki-hoon, head of the merchants’ association for the Itaewon special tourist zone.

“Last year was absolutely miserable, but we are successfully transitioning to better serve local visitors. This demand will serve as a basis for Itaewon to recover back to its glorious years.”

While Maeng estimates that sales are only about 10 percent of what they were before the US military left the area, he says businesses in the district understand that their target consumer base has changed and have altered their approach accordingly.

“The vacancy rate is high at the moment, but that is also on track towards recovery with programs like low-interest loan support from local governments,” he added.

“Visits of foreigners will be the plus alpha on top of the sales model we build from serving local customers and domestic travelers.”

By Ko Jun-tae (ko.juntae@heraldcorp.com)