A Chinese tour group, said to be 4,000 people strong, is reportedly on the brink of traveling to South Korea after reconsidering its travel plans.
The move is expected to "thaw" the local tourism industry, and follows comments in the past week made by the Chinese President Xi Jiping, expressing willingness to put South Korean relations "back on track."
Economic ties between the two countries suffered due to tensions over the deployment of the US THAAD (Terminal High Altitude Area Defense) anti-missile system on South Korean soil.
The tour group, made up of employees from a Chinese medical equipment company had originally decided to hold its "Travel Awards" in South Korea, but decided to switch the venue because of the THAAD deployment, reports Maeil Business.
The 4000-person group has reportedly now had second thoughts, and has once again contacted South Korean travel agencies.
Chinese President Xi Jinping made the remarks during a meeting with Lee Hae-Chan, a high-profile envoy dispatched by the new South Korean president Moon Jae-In, in the Great Hall of the People in Beijing, May 19, 2017.
South Korea's tourism industry has been significantly hit because of the THAAD issue. The system is aimed at intercepting attacks from North Korea, and was made operational earlier this month. China says the system's high power radar will be able to scan deep into its territory, and is strongly opposed to its deployment.
Apart from the tourism sector, aviation, hotels and South Korean retail businesses have also been affected.
The South Korean conglomerate Lotte says that since May, 2017, trade in its duty free stores have plummeted by 40% year-on-year, and 30% compared with a month earlier.
Asiana Airlines and Korean Air Lines, two South Korean airline companies whose China routes account for 19.5% and 13% of their sales, have reported a 26.6% and 40.8% year-on-year drop in profits in the first quarter of 2017, leading to loss of 26.3 billion KRW (about 25.5 million US Dollars) and 191.5 billion KRW (about 171 million US Dollars) respectively.
Local hotels have faced falling reservations since the THAAD deployment. One first class hotel in the South Korean capital, Seoul, has reported a current occupancy rate of only 30%.
According to the Korea Tourism Organization (KTO), under the Ministry of Culture and Tourism, the number of overseas visitors travelling to South Korea fell 11.2% year on year in March, 2017, the first drop since 2006.