SARS memories scare tourists off South Korea

Tourists wear masks as a precaution against the MERS virus at the Incheon International Airport in South Korea.
Chung Sung-Jun | Getty Images

As South Korea grapples with the outbreak of a deadly virus, a growing number of holidaymakers are calling off trips to the Asian country that in recent years has emerged as a popular travel destination.

As of press time on Friday, South Korea reported four new cases of Middle East Respiratory Sydnrome (MERS), bringing the total number of infections to 126 and marking the largest outbreak outside Saudi Arabia. Eleven people have died so far.

The spread of the virus has set off alarm bells regarding the health of Asia's fourth-largest economy, as well as the possibility MERS could spread to the rest of the region.

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According to data provided by the Korea Tourism Organization (KTO), 20,600 tourists have cancelled holiday plans to the country as of June 5.

Pacific Asia Travel Association (PATA) also noted that flight bookings from Hong Kong to South Korea have plunged 102 percent this month, alongside an 83 percent fall in bookings from China and Taiwan over the same period from a year ago. Hong Kong issued a "red alert" advisory against non-essential travel to South Korea this week.

"The memory of Severe Acute Respiratory Syndrome (SARS) in the region had an effect hence people are being overly-cautious at the moment," PATA's vice chairman Andrew Jones told CNBC on Friday.

Are travelers being too cautious about MERS?

The disease's resemblance to SARS - a viral respiratory illness caused by a coronavirus from the same family as MERS - has sparked memories of the latter's 2002-2003 outbreak and the damage it inflicted upon countries like Hong Kong and Singapore.

Singapore-based travel agency Dynasty Travel told CNBC on Friday that MERS had had an immediate impact on travel to South Korea. Since the country's first confirmed case on May 20, Dynasty Travel noted that 30 percent of its customers had opted to cancel their bookings or change travel plans to other Asian destinations like Taiwan, Japan and Australia.

"Taking the lesson from SARS, there's been an immediate impact and enquiries [about South Korea] have dropped to zero. For those who have not booked [their travel packages], they will likely stay away from making any reservations at this juncture," Alicia Seah, director of marketing communications at Dynasty Travel, told CNBC by phone.

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According to industry players, the upcoming quarter is a traditionally strong period for South Korea's tourism industry, which has seen stellar growth in recent years thanks to the rise of Hallyu – the Korean term for the popularity of South Korean pop-culture abroad. A prolonged spread of the virus in the country could deal a huge blow to the booming industry and in turn the already-troubled economy.

However, experts CNBC spoke to remain cautiously optimistic that travelers will not avoid South Korea for long.

"I would say 70 percent of our customers remain confident of the government in South Korea and its ability to contain the virus. The remaining 30 percent will depend on how the situation develops over this weekend," Dynasty Travel's Seah said.

In the near term, holidaymakers will likely adopt a "wait and see" approach on their travel plans, but improvements in the government's transparency will underpin confidence in South Korea's ability to overcome the outbreak.

"People are learning that the South Korean government now has a good control of the situation. They've been issuing the right information for travelers to make informed decisions.," PATA's Jones said. "At this moment, we don't see the outbreak [continuing] beyond June and as things improve, I'm sure people will start traveling again."