INVESTMENT

OPPORTUNITIES
IN KOREA

TOURISM &
LEISURE
 2 TOURISM & LEISURE

INVESTMENT
OPPORTUNITIES
IN KOREA

TOURISM &
LEISURE
Contents

04 Industry overview

KOREA,

Global tourism market overview
Korean tourism market overview
Where Success Knows No Limits Foreign direct investment in tourism-related industries
Korea’s promising tourism industries: Overview

16 Regional tourism development strategies

Tourism development planning
Tourism development plan by region

24 Government policies and related laws

Government policies
Improvement of the visa system
Sub-categorization of the hotel business
Laws and regulations applicable to investments in the tourism industry

30 Tourism businesses: Service users and tourism revenue

Total tourism revenue
Number of tourism business enterprises
Average sales revenue per tourism business enterprise
Tourism service users by segment
Expenditure of the Korean tourism industry

36 Tourism investment cases

East-Busan Tourism Complex
Jipo-Unyeo Tourism Complex in Anmyeon Island
Southwest Coast Tourism & Leisure City

44 Related organizations and associations

Ministry of Culture, Sports and Tourism (www.mcst.go.kr)
Korea Tourism Organization (kto.visitkorea.or.kr)
Korea Culture & Tourism Institute (www.kcti.re.kr)
Tourism business organizations
04 TOURISM & LEISURE 01 INDUSTRY OVERVIEW 05

The World Travel & Tourism Council (WTTC) reported that travel and tourism industries made a
Global
INDUSTRY
direct contribution of USD 2.2 trillion, up 3.1% YoY, to the global GDP and directly supported 101
tourism million jobs in 2013.
market
OVERVIEW overview Taking both direct and indirect impact into consideration, the travel and tourism industries
accounted for USD 7 trillion of the global GDP, employed 266 million people and recorded USD
754 billion in investments and USD 1.3 trillion in exports.

According to the United Nations World Tourism Organization (UNWTO), international tourist
arrivals grew by 5.1% worldwide in 2013, reaching a record 1.087 billion arrivals, after topping
the 1 billion mark in 2012. International tourism receipts reached USD 1.15 trillion worldwide in
2013, a 7.5% increase YoY.

Global tourism growth trend

(Unit: mil. people, %, USD bil.)

Tourist arrivals Tourism receipts

Year
No. of tourists Growth rate Tourism receipt Growth rate
2000 676 7.8 476 4.2
2001 678 0.3 466 -2.1
2002 698 2.9 485 4.1
2003 689 -1.3 532 9.7
2004 760 10.3 634 19.2
2005 807 6.2 681 7.4
2006 853 5.7 747 9.7
2007 908 6.4 861 15.3
2008 926 2.0 944 9.6
2009 890 -3.8 856 -9.3
2010 948 6.5 930 8.7
2011 995 4.9 1,043 12.0
2012 1,035 4.0 1,078 3.4
2013 1,087 5.1 1,159 7.5
* Source: UNWTO World Tourism Barometer (Vol.12, interim update as of June, 2014)
* Note: 2013 data is based on estimates.
 06 TOURISM & LEISURE 01 INDUSTRY OVERVIEW 07

The number of inbound international tourists reached 12.18 million in 2013, up 9.3% YoY. The Inbound tourism by purpose of visit
Korean Japanese inbound tourism market contracted as much as 21.9% YoY in 2013, continuing on
(Unit: %)

Purpose of visit 2011 2012 2013

tourism a downward trend since September of 2012 due to the weak yen and prolonged diplomatic Leisure, recreation, holidays 42.4 43.9 48.2
market conflicts between Korea and Japan. Business and professional 31.1 24.5 23.4
overview Shopping 9.2 11.8 10.6
Visiting friends and relatives 10.6 11.1 9.7
In contrast, the Chinese inbound market surged by 52.5% YoY in 2013 on the back of increased
Education 4.6 6.5 5.9
shopping, individual tours, cruises and incentive tour groups, making a positive contribution
Religious reasons and pilgrimage 0.9 1.1 1.0
to an increase in the total number of international tourists visiting Korea. China emerged as the Beauty, health, medical treatment 0.3 1.1 1.0
largest inbound market in 2013, overtaking Japan. Other 0.5 0.1 0.1
* Source: 2013 Survey of Inbound International Tourists (Ministry of Culture, Sports and Tourism, February, 2014)

Number of inbound international tourists by year

(Unit: No. of people, %)
When asked about the reason for selecting Korea as a destination, 61% of inbound international
Year Number of inbound international tourists Growth rate
tourists said shopping, followed by gourmet and culinary tourism (41.3%) and natural attractions
2005 6,022,752 3.5
2006 6,155,046 2.2
(39.0%) in 2013.
2007 6,448,240 4.8
2008 6,890,841 6.9 Key reasons when choosing Korea as a destination
(Unit: %)
2009 7,817,533 13.4
Reason 2011 2012 2013
2010 8,797,658 12.5
Shopping 66.6 66.0 61.0
2011 9,794,796 11.3
Culinary and gourmet 44.2 44.3 41.3
2012 11,140,028 13.7
Natural scenery 23.9 32.1 39.0
2013 12,175,550 9.3
Resort and rest 16.5 17.6 18.0
* Source: Tourism Knowledge & Information System (www.tour.go.kr)
Historic, cultural sites 19.1 21.5 17.7
Culture (e.g. fashion, trends) 14.5 11.1 14.8
By purpose of visit to Korea, travel for leisure, recreation and holidays accounted for the largest
Distance 19.0 16.9 11.7
share of inbound international tourists (48.2%) in 2013, followed by traveling for business and Affordability 14.9 11.5 10.3
professional purposes (23.4%), shopping (10.6%) and visiting friends and relatives (9.7%). Leisure and theme park 18.9 8.1 9.8
Time available 5.4 7.6 9.2
* Source: 2013 Survey of Inbound International Tourists (Ministry of Culture, Sports and Tourism, February, 2014)
* Note 1: Multiple answers are allowed.
* Note 2: Based on top 10 rankings in 2013

When asked about places of interest in Korea, inbound international tourists picked Myeong-
dong (58.9%) in 2013, followed by Dongdaemun Market (45.8%), palaces (31.6%), Namdaemun
Market (26.5%), Namsan and N Seoul Tower (25.5%), Lotte World (24.3%) and Insa-dong (23.8%).
08 TOURISM & LEISURE 01 INDUSTRY OVERVIEW 09

Tourist destinations in Korea Outbound Korean travelers by year

(Unit: %) (Unit: No. of people, %)

Tourist destinations 2011 2012 2013 Year Number of outbound travelers Growth rate
Myeong-dong 55.3 61.5 58.9 2005 10,080,143 14.2
Dongdaemun Market 45.8 49.0 45.8 2006 11,609,879 15.2
Palaces 31.8 32.3 31.6 2007 13,324,977 14.8
Namdaemun Market 33.7 31.8 26.5 2008 11,996,094 -10.0
Namsan / N Seoul Tower 29.1 28.9 25.5 2009 9,494,111 -20.9
Lotte World 20.6 23.3 24.3 2010 12,488,364 31.5
Insa-dong 26.1 26.2 23.8 2011 12,693,733 1.6
Museums memorials 21.8 22.4 20.4 2012 13,736,976 8.2
Sinchon / Hongdae 14.8 16.5 19.6 2013 14,846,485 8.1
Itaewon 16.1 17.7 17.5 * Source: Tourism Knowledge & Information System (www.tour.go.kr)
* Source: 2013 Survey of Inbound International Tourists (Ministry of Culture, Sports and Tourism, February, 2014)
* Note 1: Multiple answers allowed.
* Note 2: Based on top 10 tourist rankings in 2013 Inbound international tourists spent an average USD 1,193 per person, while outbound Korean
tourists spent an average USD 1,168 per person in 2013.
The areas most visited by inbound international tourists in 2013 were Seoul (80.9%), followed
by Gyeonggi Province (17.9%), Jeju Island (16.7%), Gyeongsang Province (15.6%) and Gangwon Annual tourism balance of payment by person
Province (9.2%).
Tourism balance of Average tourism Average tourism
Tourism receipt Tourism expenditure
Year payment receipt per person expenditure per
(USD mn) (USD mn)
(USD mn) (USD) person (USD)
Areas visited by inbound international tourists
(Unit: %) 2005 5,793 12,025 -6,232 962 1,193
Areas visited 2011 2012 2013 2006 5,760 14,295 -8,535 936 1,231
Seoul 79.7 82.5 80.9 2007 6,071 16,932 -10,860 942 1,271
Gyeonggi Province 23.8 21.3 17.9 2008 9,696 14,572 -4,876 1,407 1,215
Incheon 9.0 7.7 7.8 2009 9,767 11,036 -1,269 1,249 1,162
Jeju Island 10.2 12.0 16.7 2010 10,291 14,278 -3,987 1,170 1,143
Gyeongsang Province 19.3 16.1 15.6 2011 12,347 15,531 -3,184 1,261 1,224
Gangwon Province 11.1 9.7 9.2 2012 13,357 16,495 -3,138 1,199 1,201
Chungcheong Province 5.1 4.1 4.0 2013 14,525 17,341 -3,611 1,193 1,168
Jeolla Province 3.9 4.1 3.8 * Source: Tourism Knowledge & Information System (www.tour.go.kr)
Other 0.7 0.3 0.6
* Source: 2013 Survey of Inbound International Tourists (Ministry of Culture, Sports and Tourism, February, 2014) The number of Koreans traveling within Korea increased 2.4% YoY to 37.8 million in 2013 thanks
* Note: Multiple answers allowed.
to a 4.8% YoY increase in day trips and a 2.6% YoY increase in overnight travel. The total number
The number of outbound Korean tourists increased by 8.1% YoY to 14,846,485 in 2013 thanks of days Koreans spent on domestic trips is based on a sum of overnight travels and day trips from
to the strong won and expectations for global economic recovery. Monthly outbound Korean January 1 to December 31. In 2013, the total number of domestic trip days increased by 6.6% YoY
tourists exceeded 1 million, posting a monthly increase. In particular, more than 1.4 million to 389,220,312 days.
Koreans traveled overseas in January, July and August, which are vacation and holiday seasons.
 10 TOURISM & LEISURE 01 INDUSTRY OVERVIEW 11

Domestic trips taken by Koreans The total number of tourist hotels stood at 740, with 79,441 rooms in Korea, in 2013. By region,
(Unit: No. of people, No. of people/days)
Korea’s the number of rooms was highest in Seoul, followed by Gyeonggi Province, Jeju Island and Busan.
No. of Korean domestic tourists No. of domestic trip days
Year
Day trip Overnight trip Day trip Overnight trip
promising
2005 36,888,642 30,003,805 31,225,594 388,836,797 148,649,882 240,186,915 tourism Overview of tourist hotels
2006 37,666,721 31,975,212 31,817,115 416,982,061 168,373,799 248,608,262 industries: Deluxe Deluxe
2007 36,443,445 30,472,456 31,226,028 477,372,260 183,033,025 294,339,235 Overview 1st- class hotel 2nd- class hotel
1st class hotel 2nd class hotel 3rd class hotel Unclassified hotel Total

2008 37,391,314 30,461,915 31,350,952 408,026,189 141,017,187 267,009,002 No. of No. of No. of No. of No. of No. of No. of No. of No. of No. of No. of No. of No. of No. of
hotels Rooms hotels Rooms hotels Rooms hotels Rooms hotels Rooms hotels Rooms hotels Rooms
2009 31,201,294 22,739,816 26,408,910 375,340,664 106,693,142 268,647,522
Seoul 22 10,742 31 6,890 43 5,001 23 1,423 15 739 48 3,808 182 28,603
2010 30,916,690 20,012,003 26,047,929 339,607,551 75,974,080 263,633,471
Busan 7 2,626 4 659 15 1,371 11 487 11 1,519 2 108 50 6,770
2011 35,013,090 27,651,266 26,233,868 286,947,961 84,971,961 201,976,000
Daegu 4 999 5 342 8 406 1 65 1 33 0 0 19 1,845
2012 36,914,067 28,649,336 30,277,238 365,282,249 121,179,761 244,102,488
Incheon 3 1,020 6 1,402 1 94 12 553 12 552 16 736 50 4,357
2013 37,800,004 30,011,682 31,058,136 389,220,312 131,368,005 257,852,307
Gwangju 2 325 2 198 6 344 4 210 0 0 4 157 18 1,234
* Source: 2013 Survey of Korean Tourists
Daejeon 1 174 2 394 7 427 2 60 5 237 2 113 19 1,405
Ulsan 2 463 1 75 0 0 2 144 0 0 5 242 10 924
Gyeonggi
4 1,072 6 1,047 23 1,909 18 933 22 1,226 26 1,376 99 7,563
In 2013, foreign direct investment in tourism-related industries broke down to USD 916 million Province
Foreign direct in accommodations (23 cases), USD 21 million in food and beverage (104 cases) and USD 24 Gangwon
7 1,871 6 1,066 14 896 4 199 2 114 7 630 40 4,776
Province
investment million in recreational sports (16 cases). North
in tourism- Chungcheong 1 328 1 180 14 1,017 1 30 4 137 2 77 23 1,769
Province
related Foreign investment trends South
industries 2010 2011 2012 2013
Chungcheong 0 0 4 568 2 105 8 366 1 50 2 104 17 1,193
Province
Industry No. of Amount No. of Amount No. of Amount No. of Amount North Jeolla
cases (USD 1,000) cases (USD 1,000) cases (USD 1,000) cases (USD 1,000) 1 118 3 459 6 413 9 435 5 189 2 97 26 1,711
Province
Accommodations 6 34,484 9 93,571 21 822,965 23 916,421 South Jeolla
3 650 3 256 13 833 3 149 2 122 9 395 33 2,405
Food and beverage 299 23,530 181 33,025 223 85,155 104 20,714 Province

Recreational sports 16 81,751 22 311,998 19 82,963 16 23,635 North

Gyeongsang 5 1,627 4 691 14 805 9 484 8 400 8 315 48 4,322
* Source: Ministry of Trade, Industry & Energy (www.motie.go.kr) Province
South
Gyeongsang 2 487 4 478 14 1,100 7 360 3 116 13 559 43 3,100
Province
Jeju Island 11 3,447 4 463 12 1,070 4 247 1 95 31 2,142 63 7,464
Total 75 25,949 86 15,168 192 15,791 118 6,145 92 5,529 177 10,859 740 79,441
* Source: 2013 Annual Tourism Report (Ministry of Culture, Sports and Tourism, August, 2014)
12 TOURISM & LEISURE 01 INDUSTRY OVERVIEW 13

The average occupancy rate of tourist hotels stood at 63.2% in 2013, led by Jeju Island (77.1%), Analysis of hotel room demand and supply in Jeju Island
(Unit: No. of rooms)
Seoul (74.5%), Incheon (73.7%), Gyeonggi Province (63.5%) and Busan (62.6%). Demand & Supply 2014 2015 2016 2017
Demand (a) 13,195 14,094 15,063 16,106
Occupancy rate of tourist hotels in Korea Supply (b) 10,115 12,208 12,496 12,904
(Unit: No. of rooms, %)
Supply-Demand (b-a) △3,079 △1,886 △2,567 △3,203
2012 2013
Region * Source: Demand and Supply Analysis of Tourist Hotels (Korea Culture & Tourism Institute, 2014)
No. of rooms No. of rooms Occupancy No. of rooms No. of rooms Occupancy
available occupied rate (%) available occupied rate (%)
Seoul 7,809,313 6,177,846 79.1 7,693,038 5,728,149 74.5 In 2013, a total of 57 businesses operated in the special recreation services segment and 23
Busan 2,171,302 1,399,615 64.5 2,204,212 1,380,492 62.6 businesses in the resort complex segment.
Daegu 638,902 354,181 55.4 611,357 308,666 50.5
Incheon 1,217,028 981,939 80.7 1,226,500 903,770 73.7
Number of tourist facilities
(Unit: No. of businesses)
Gwangju 458,194 226,645 49.5 399,115 200,043 50.1
Daejeon 482,754 262,778 54.4 437,846 240,954 55.0 Special Performing Souvenir shops
Resort Auto camping
City / Region recreation Cruise tour arts center for exclusively for
complexes park facilities
Ulsan 274,866 162,890 59.3 273,385 164,322 60.1 services tourists foreign tourists
Gyeonggi Province 1,810,532 1,163,246 64.2 1,843,930 1,170,313 63.5 Seoul - 1 - 1 3 99
Gangwon Province 1,493,050 654,796 43.9 1,396,501 632,888 45.3 Busan 1 1 - 4 1 23
North Chungcheong Province 504,524 183,247 36.3 561,810 204,893 36.5 Daegu - 1 - - 1 1
South Chungcheong Province 324,353 147,763 45.6 341,836 183,909 53.8 Incheon 1 - 3 5 - 13
North Jeolla Province 476,233 176,989 37.2 571,900 209,889 36.7 Gwangju - - - - - -
South Jeolla Province 420,717 183,749 43.7 549,393 249,529 45.4 Daejeon - - - - - -
North Gyeongsang Province 1,433,307 662,456 46.2 1,387,202 611,263 44.1 Ulsan - - - - - -
South Gyeongsang Province 959,221 462,150 48.2 1,009,773 456,148 45.2 Sejong - - - - - -
Jeju Island 2,182,330 1,707,343 78.2 2,259,721 1,741,927 77.1 Gyeonggi Province 8 3 10 - - 24
Total 22,656,626 14,907,633 65.8 22,767,519 14,387,155 63.2 Gangwon Province 2 8 7 2 - -
* Source: 2013 Annual Tourism Report (Ministry of Culture, Sports and Tourism, August, 2014) North Chungcheong
3 1 1 - - -
Province
South Chungcheong
According to an analysis of hotel demand and supply in Seoul and Jeju Island, which are Province
5 2 6 3 - -
expected to face a growing shortage of hotel rooms, the daily demand for hotel rooms is North Jeolla Province 1 1 4 6 1 -
estimated at 41,301 in Seoul in 2017, outpacing the daily supply of 33,864 rooms and leading to South Jeolla Province 1 2 7 5 - -

a shortage of 7,437 rooms. North Gyeongsang

4 - 5 - - 5
Province
South Gyeongsang
- 3 4 5 - -
Meanwhile, the demand and supply analysis shows that the daily demand for hotel rooms on Province
Jeju Island 31 - 3 7 2 40
Jeju Island should amount to 16,106 in 2017, outpacing the daily supply of 12,904 rooms and
Total 57 23 50 38 8 205
leading to a shortage of 3,203 rooms.
* Source: 2013 Annual Tourism Report (Ministry of Culture, Sports and Tourism, August, 2014)

Analysis of hotel room demand and supply in Seoul

(Unit: No. of rooms)

Demand & Supply 2014 2015 2016 2017

Demand (a) 31,205 34,212 37,561 41,301
Supply (b) 27,129 29,659 31,362 33,864
Supply-Demand (b-a) △4,076 △4,553 △6,199 △7,437
* Source: Demand and Supply Analysis of Tourist Hotels (Korea Culture & Tourism Institute, 2014)
14 TOURISM & LEISURE 01 INDUSTRY OVERVIEW 15

Attendees of international conferences go shopping and take tours during their stay, making Number of camping parks in 2013
economic contributions to the transportation, airline, lodging and entertainment industries. Total
City No. of Public facilities Private facilities
% of total
camping parks
According to the Union of International Associations (UIA), a total of 635 international
Seoul 32 1.6 4 28
conferences were held in Korea in 2013, making it the world’s third-largest host country. The
Busan 10 0.5 0 10
number of international conference facilities and conference rooms stood at 820 and 4,450, Daegu 7 0.4 4 3
respectively, in Korea in 2013. Incheon 54 2.8 9 45
Gwangju 2 0.1 1 1

Number of international conference facilities Daejeon 5 0.3 2 3

Ulsan 19 1.0 3 16
Type of facility No. of facilities No. of conference rooms
Sejong City 4 0.2 3 1
Specialized conference facilities 12 254
Gyeonggi Province 652 33.2 46 606
Semi-conference facilities 143 1,194
Gangwon Province 402 20.5 72 330
Small to mid conference facilities 257 810
North Chungcheong Province 127 6.5 35 92
Hotel (deluxe 1st - class hotel) 76 574
South Chungcheong Province 135 6.9 31 104
Hotel (deluxe 2nd - class hotel) 82 397
North Jeolla Province 74 3.8 27 47
Hotel (1st class) 109 325
South Jeolla Province 90 4.6 34 56
Resort condominium 141 896
North Gyeongsang Province 171 8.7 52 119
Total 820 4,450
South Gyeongsang Province 132 6.7 43 89
* Source: 2013 Annual Tourism Report (Ministry of Culture, Sports and Tourism, August, 2014) Jeju Island 47 2.4 13 34
Total 1,963 100.0 379 1,584
A total of 17 casino businesses operated in Korea in 2013. Of these casino businesses, only
* Source: Establishment of Legal Framework on Camping Park Business (Korea Culture & Tourism Institute, 2013)
Kangwon Land Casino is open to Korean nationals.

Number of casino businesses in Korea

City No. of casino businesses Note
Seoul 3
Busan 2
Incheon 1
Gangwon Province 2 Including 1 casino open to Korean nationals
Daegu 1
Jeju Island 8
Total 17
* Source: 2013 Annual Tourism Report (Ministry of Culture, Sports and Tourism, August, 2014)

Demand for camping has continued to rise as Korean families have spent more time together
with the spread of five-day workweeks. Camping is considered a popular leisure activity.

In 2013, there were 1,963 camping parks, 379 (19.3%) of which were public facilities, and 1,584
(80.7%) were private facilities.
16 TOURISM & LEISURE 02 REGIONAL TOURISM DEVELOPMENT STRATEGIES 17

The Korean government has drawn seven tourism zones across the country, enabling regional
Tourism
REGIONAL TOURISM
authorities to devise their own tourism development plans.
development
planning Each regional authority has established and pursued strategies to achieve their own vision and

DEVELOPMENT goals for tourism development.

STRATEGIES Tourism zones

Zone Regional authorities
Seoul Metropolitan Government, Incheon Metropolitan City,
Seoul Capital Area
Gyeonggi Province
Daejeon Metropolitan City, North Chungcheong Province,
Chungcheong Province Zone
South Chungcheong Province
Gwangju Metropolitan City, North Jeolla Province, South Jeolla
Jeolla Province Zone
Province
Daegu and North Gyeongsang Province Zone Daegu Metropolitan City, North Gyeongsang Province
Busan Metropolitan City, Ulsan Metropolitan City, South
Busan, Ulsan and South Gyeongsang Province Zone
Gyeongsang Province
Gangwon Province Zone Gangwon Province
Jeju Island Zone Jeju Island Special Self-Governing Province
* Source: Third Basic Plan for Tourism Development (2012 - 2021) (Ministry of Culture, Sports and Tourism, August, 2011)

Regional tourism zones

Gangwon Province

Seoul Capital Area

Chungcheong
Province Daegu and North
Gyeongsang
Province

Busan, Ulsan and

Jeolla Province South Gyeongsang
Province

Jeju Island
 18 TOURISM & LEISURE
Seoul Metropolitan Government
Tourism
development •Vision: To be the most attractive city for international tourists
plan by •Goal: To join the top 15 cities in terms of global tourism competitiveness
region: Seoul •Strategy: To focus on openness, attractiveness, tourist satisfaction and vitality
•Tourism demand estimate for 2016: 110,883,000 tourists total (53,068,000 Korean tourists and
57,815,000 inbound foreign tourists)
Incheon Metropolitan City
•Vision: To be a global center of creative marine tourism with the catchphrase, “Creative Marine
Tourist City with World”
•Goal: Creative tourism, environment-friendly marine tourism, a global center of tourism exchange
•Strategy: To promote unique and creative tourism; develop environment-friendly marine and
islet tourism; foster cultural tourism and related industries; expand domestic and international
tourism exchange and networks; overhaul tourism transportation & information system and
marketing activities; enhance tourism business planning and job creation
•Tourism demand estimate for 2016: 21,753,000 tourists total (20,046,000 Korean tourists and
1,707,000 inbound foreign tourists)
Gyeonggi Province
•Vision: To be a creative tourism environment that will raise Gyeonggi Province’s profile in the
global tourism market and promote related businesses
•Goal: To envision tourism that reflects diversity and accentuates Gyeonggi Province’s regional
flavor; enhance Gyeonggi Province’s role as a gateway to the Seoul Capital Area and a national
tourist attraction; design tourism businesses to sharpen its competitiveness in Northeast Asia;
develop creative tourism to meet market trends; establish an effective tourism system
•Strategy: Differentiate Gyeonggi Province by presenting a coherent image as a tourist
destination through thematic storytelling about regional resources; create various leisure sites
that can serve as “breathing room”; enhance competitiveness in response to the expansion of
the East Asian economy and the fast rise of the Chinese tourism market; strategically promote
emerging tourism industries to deliver creative cultural tourism; enhance infrastructures
through institutional reform and various facilities; and establish an effective implementation
system by prioritizing more viable tourism development projects
•Tourism demand estimate for 2016: 91,960,000 tourists total (90,207,000 Korean tourists and
1,753,000 inbound foreign tourists)
02 REGIONAL TOURISM DEVELOPMENT STRATEGIES 19
Daejeon Metropolitan City
Chungcheong
Province •Vision: To become a green science and tourism city that leads health-conscious and creative tourism
Zone •Goal: Focus on being a green and health-conscious tourism city, a creative and science tourism
city and a cultural experience tourism city
•Strategy: To establish an experience-oriented green tourism environment; create a health-
conscious tourism environment; develop tourism products related to historic heritage and
culture; promote high-tech medical tourism; promote city tour programs focused on a “healing
belt”; establish the Yuseong hot spring tourism belt, a high-tech science and tourism theme
park and a tourism complex in Seongbuk district; increase shopping and entertainment
facilities; and enhance tourism promotion and information services
•Tourism demand estimate for 2016: 9,934,000 tourists total (9,605,000 Korean tourists and
329,000 inbound foreign tourists)
North Chungcheong Province
•Vision: To be a center of the Baekdudaegan trail and the hidden jewel of inland Korea
•Goal: To position North Chungcheong Province as a center of green tourism in the 21st century
and a more competitive tourist destination for Korean and foreign tourists with the development
of creative tourism products and establishment of an effective support system
•Strategy: To establish a thematic eco-friendly tourism system; promote tourism magnets within
the zone; and develop unique tourism resources and products; establish an effective tourism
support system
•Tourism demand estimate for 2016: 23,541,000 tourists total (23,038,000 Korean tourists and
503,000 inbound foreign tourists)
South Chungcheong Province
•Vision: To be the heart of Korea, one that gives its residents and visitors hope
•Goal: To be a favorite national destination that attracts tourists from across the country; welfare
tourism (tourism for all), resort tourism with global tourist attractions and industrial tourism
with balanced regional development
•Strategy: To foster tourism city centers; establish networks across tourism zones; develop
national tourist attractions and promote tourism routes; pursue fair travel (solidarity tourism)
with a focus on communication, engagement and universal tourism, which is affordable for all
social classes; promote the tourism business across the region; foster international resorts and
tourist attractions; develop and advertise unique intangible and tangible tourism products;
promote the green tourism industry by tapping into regional tourism resources; and pursue a
regional identity based on sustainable tourism
•Tourism demand estimate for 2016: 39,521,000 tourists total (39,138,000 Korean tourists and
383,000 inbound foreign tourists)
 20 TOURISM & LEISURE
Gwangju Metropolitan City
Jeolla
Province Zone •Vision: To be a city of art, culture and tourism that is close to the heart
•Goal: To create an environment for international art, culture and tourism; attract 300,000
international inbound tourists; establish tourism center cities in the Jeolla Province Zone; and
establish a tourism promotion system
•Strategy: To develop major attractions for city tourists; develop green, eco, culture tourism
resources in suburban areas; establish city tour “trail” connecting tourist attractions; develop art
performance, exhibition tourism programs; promote festivals and MICE industries; attract
tourists and promote tourism marketing and hotel, culinary and shopping tourism; build
tourism networks across the region; establish a tourism promotion governance system; focus
on fair travel and job creation; and establish tourism statistics and related database systems
•Tourism demand estimate for 2016: 9,640,000 tourists total (9,548,000 Korean tourists and
91,000 inbound foreign tourists)
North Jeolla Province
•Vision: To be Korea’s tourism capital in the 21 century, the era of Northeast Asia
st
•Goal: To expand the scope of tourism resources; establish world-class tourism infrastructure and
a market-friendly environment; provide more leisure opportunities and better quality of life for
local residents
•Strategy: To expand the tourism market through convergence tourism; enhance core
competence for high value-added tourism; and establish a support system for market-friendly
tourism
•Tourism demand estimate for 2016: 32,906,000 tourists total (32,773,000 Korean tourists and
133,000 inbound foreign tourists)
South Jeolla Province
•Vision: To be an eco and marine tourism center of Northeast Asia
•Goal: To create marine resort tourism belts encompassing coasts, islets and tidal flats; promote
green tourism with a clean environment, culinary experiences (taste of southern Korea), mild
weather, health-conscious tourism through convergence with other industries; and present a
hometown feel, enriching daily lives.
•Strategy: To create resort and leisure zones based on maritime resources and islands; to
specialize in low-carbon green tourism and enhance content offering; build cooperative
networks across regions; promote the regional economy through the convergence of local
resources; and promote historic and cultural resources as tourist attractions
•Tourism demand estimate for 2016: 46,012,000 tourists total (45,934,000 Korean tourists and
78,000 inbound foreign tourists)
02 REGIONAL TOURISM DEVELOPMENT STRATEGIES 21
Daegu Metropolitan City
Daegu
and North •Vision: To be a center of knowledge-based tourism and one of Korea’s three major cultural zones
Gyeongsang •Goal: Regional attractions, greater quality of life, greater sense of cultural pride, creation of
Province added value
Zone •Strategy: Promote Daegu and its neighboring areas as a center of knowledge tourism; maximize
the cultural identity of downtown Daegu; promote Daegu as a key tourist attraction; make
Daegu a better place to live by incorporating tourism into daily life; smart-marketing to enhance
Daegu’s brand power as a tourist attraction; foster the growth of the regional tourism market
through human resource management; create win-win opportunities through cross-regional
cooperation
•Tourism demand estimate for 2016: 16,671,000 tourists total (16,411,000 Korean tourists and
260,000 inbound foreign tourists)
North Gyeongsang Province
•Vision: To be a major cultural tourist attraction of Korea created by tradition, nature and people
•Goal: To develop world-class tourist attractions; promote North Gyeongsang Province as a
tourism brand with wide appeal; create jobs in the tourism sector for higher quality of life;
develop “fun” content converging culture and the environment
•Strategy: To promote Korea’s three major cultural zones as global tourist destinations that make
visitors want to stay longer; renovate tourist parks to meet trends; develop entertaining and
moving tourism content; brand North Gyeongsang Province as a trend-setter in the tourism
sector; enhance a business base for the tourism business converged with regional specialized
industries; and build tourism clusters to position North Gyeongsang Province as a leading
tourist attraction
•Tourism demand estimate for 2016: 43,096,000 tourists total (42,552,000 Korean tourists and
544,000 inbound foreign tourists)
 22 TOURISM & LEISURE
Busan Metropolitan City
Busan, Ulsan
and South •Vision: To be a global marine entertainment & tourism city
Gyeongsang •Goal: To promote Busan as a center of various river and maritime activities; a creative tourism
Province Zone city with industry and content convergence; a global tourist attraction with art and festivals; a
smart U-tourism city
•Strategy: To create a base for “blue tourism” by enhancing water leisure and sports facilities;
build a base for a low-carbon, green, eco-tourism city; establish emerging tourism industries
(video, medical, convention); establish a cultural tourism base through the development of
historic and cultural content; promote leisure and welfare tourism for all; develop and promote
year-round tourism resources and products (shopping, festivals, etc.); enhance the readiness of
the tourism industry in response to new demand, such as for U-tourism; foster a workforce
specializing in the tourism segment; enhance domestic and overseas marketing especially in
target markets
•Tourism demand estimate for 2016: 31,583,000 tourists total (29,601,000 Korean tourists and
1,981,000 inbound foreign tourists)
Ulsan Metropolitan City
•Vision: A new tourism city that presents moving experiences and learning
•Goal: To brand Ulsan as an emerging tourism city, bringing together a natural ecosystem and
industries; promote Ulsan as a tourism city with leading tourism resources; an inviting city
surrounded by mountains and sea, which make visitors want to stay longer; promote it as a
global “smart” tourism attraction with well-established tourism infrastructure
•Strategy: To systematically introduce whale-themed tourism products; build industrial tourism
networks; promote the Taewha River as a green tourism product; enhance the commercial
viability of the existing tourism resources; promote tourist attractions with new narratives and
storytelling; promote the 12 most beautiful views in Ulsan as tourism products; enhance a
global tourism base in the Eastern region; promote hiking tourism in the Yeongnam area;
diversify transportation tourism products; overhaul and establish the lodging system; improve
the tourism system with the start-up of KTX; upgrade the tourism information and promotion
systems; enhance the support system for city tours
•Tourism demand estimate for 2016: 8,758,000 tourists total (7,948,000 Korean tourists and
810,000 inbound foreign tourists)
02 REGIONAL TOURISM DEVELOPMENT STRATEGIES 23
South Gyeongsang Province
•Vision: A year-round resort and tourism center in Northeast Asia
•Goal: To promote South Gyeongsang Province as a global tourist attraction, a must-visit place in
Korea and a vital tourist attraction under the catchphrase of “Only One!”; pursue convergence
between tourism and new industries; enhance the quality of life for local residents through
welfare tourism
•Strategy: To promote South Gyeongsang Province as a tourism center of Northeast Asia;
establish a marine tourism base to promote Hallyeohaesang National Marine Park that
encompasses the most beautiful stretch of Korea's south coast; establish a framework to
promote urban tourism; promote Robot Land as a tourism landmark in the region; and create
more opportunities for local residents to do sports activities
•Tourism demand estimate for 2016: 52,389,000 tourists total (52,010,000 Korean tourists and
379,000 inbound foreign tourists)
Gangwon Province
Gangwon
•Vision: To be a global center for health and life sciences and a tourism and leisure center of
Province Zone
Northeast Asia
•Goal: To establish a development base for revitalization; create values by identifying local
emerging sectors; create a tourism environment focused on regional amenities; enhance global
tourism competitiveness
•Tourism demand estimate for 2016: 71,320,000 tourists total (70,285,000 Korean tourists and
1,035,000 inbound foreign tourists)
Jeju Island Special Self-Governing Province
Jeju Island
•To promote Jeju Island as UNESCO Natural and Cultural Heritage sites and leverage them as a
Zone
global tourist attraction
•To develop tourism content based on Jeju Island’s unique natural environment and culture
•To promote the high value-added tourism industry and convergence with core industries
•To promote gourmet and shopping tourism with a focus on local fisheries and agricultural
products
24 TOURISM & LEISURE 03 GOVERNMENT POLICIES AND RELATED LAWS 25

The number of inbound international tourists increased by 9.3% YoY to a record-high of 12.18
Government million in 2013, after breaking the 10 million mark in 2012. Korea climbed seven positions from
policies 32nd in 2011 to 25th in 2013 in the Travel & Tourism Competitiveness Index (TTCI), released by the
World Economic Forum.

As Korea posted tourism revenue of USD 13.4 billion, attracting about 11 million foreign tourists,
the Ministry of Culture, Sports and Tourism (MCST) hosted the 1st tourism promotion expansion
meeting, which was presided over by Korean President Park Geun-hye on July 17, 2013, to discuss
measures to promote the enhanced quality of Korea’s tourism industry as well. The meeting
provided an opportunity for the MCST to establish an intergovernmental collaboration system for
the development of the tourism industry and listen to the opinions of industry players and the
public. Meanwhile, the MCST conducted a survey on tourism demand and areas of improvement
to devise policy plans to overhaul the institutionary framework to resolve tourist inconveniences
and to promote strategic tourism industries.

To support the establishment of the tourism complexes of leisure, resort and accommodation
facilities, the government plans to allow tourism project owners, including public companies, to
dispose of project sites at acquisition cost, instead of appraisal prices, which is expected to
stimulate pre-sale demand for tourism complex sites.

The MCST has placed a strategic focus on high value-added convergence tourism industries in
order to sharpen Korea’s competiveness in the global tourism market. The government has
pursued institutional reforms and enhanced policy support to promote strategic convergence
tourism industries such as cruises, MICE (meetings, incentives, conferences and events) tours and
medical tourism.

In addition to cross-industry convergence, as the Korean pop culture craze leads to growing

GOVERNMENT interest in the overall Korean culture, the government has pursued the promotion of creative
culture tourism, such as K-POP tourism, culinary tourism and tourism that focuses on historic and

POLICIES AND
traditional cultural experiences using historic palaces, traditional houses and temple stay
programs. In particular, the exploration of food plays an increasingly important role in attracting

RELATED LAWS
international tourists to Korea and serves as a branding element that shapes a national image and
creates cultural experiences. As such, in partnership with the Ministry of Agriculture, Food and
Rural Affairs, the MCST has made an active effort to launch pilot programs in which tourists can
experience generations-old family recipes and traditional food.

Meanwhile, the government sought to increase domestic tourism demand, creating better
traveling conditions, developing competitive tourism content and various programs. First of all,
the government supported various activity programs to increase demand for leisure tourism such
 26 TOURISM & LEISURE
as horse-riding and water sports. In addition, to meet growing interest in hiking trips, the MCST
launched an online service titled Hiking Trails and Trips in Korea (www.koreatrails.or.kr) with the
cooperation of other ministries and government agencies.
In addition, as part of its efforts to strategically promote the Korean tourism market, the
government has enhanced its global online and offline marketing and diversified its marketing
methods in response to a continuous increase in individual tourists. At the same time, to make it
easier for international tourists to visit and travel to Korea, the government has enhanced the
market readiness of the tourism sector, overhauling the visa system, increasing tourist
accommodation facilities and related services and introducing tourism police offers.
The visa system has been significantly improved to attract more international inbound tourists.
Improvement First of all, the government, targeting Chinese tourists, expanded the eligibility of the multiple
of the visa entry visa to include the spouses and underage children of Chinese nationals who already hold a
system multi-entry visa, students at leading Chinese universities, Chinese residents in Beijing and
Shanghai and those who own timeshares in condominium resorts. In addition, the Korean
government eased multiple entry visa requirements and extended the visa validity for 11 countries
in Southeast Asia that are emerging tourism markets. Marking the 2014 - 2015 Korea-Russia
Mutual Visit Year, Korea and Russia entered into an agreement on mutual visa-free travel for 60
days starting in January of 2014.
The government sought to overhaul legal systems to create the medical tourism hotel segment
Sub- and the small hotel segment as sub-categories of the hotel business in order to increase diversity
categorization in the tourism accommodation service segment and foster the high value-added convergence
of the hotel tourism industry amid a steady increase in inbound international tourists. The Amendment to the
business Enforcement Decree of the Tourism Promotion Act 1) specified medical tourism hotel as a sub-
category of the hotel industry to promote medical tourism; 2) created the small hotel business
category to promote hotels, which are small but provide unique and excellent services, such as
boutique hotels; and 3) eased the adjoining road requirements for hotels to be located in
residential areas to promote investments in the small hotel and hostel businesses.
03 GOVERNMENT POLICIES AND RELATED LAWS 27
The tourism industry is regulated by, among others, the Framework Act on Tourism, Tourism
Laws and Promotion Act, Tourism Promotion and Development Fund Act, International Conference Industry
regulations Promotion Act, Special Act on Expansion of Tourism Lodging Facilities and Korea Tourism
applicable to Organization Act. In particular, the aforementioned six acts provide legal grounds for the
investments development and promotion of the tourism industry.
in the tourism
industry Tourism lodging industry
Under the Tourism Promotion Act, the tourism and lodging businesses are classified as hotels and
condominium resorts. The hotel segment includes the tourist hotel business, floating tourist hotel
business, traditional Korean hotel business, family hotel business, hostels, small hotels and medical
tourism hotels.
In preparation for the 20 million+ inbound international tourist era, the Korean government
enacted the Special Act on Expansion of Tourism Lodging Facilities (enactment date: January 26,
2012) as part of an effort to establish institutional frameworks by enhancing tourism lodging
facilities and dramatically sharpening the Korean tourism industry’s competitive edge.
Tourist-use facility business
The tourist-use facility business provides facilities related to sports, entertainment, restaurants
and recreation for tourists. The tourist-use facility business includes special recreation services,
resort complexes, an auto camping site, a tourist cruise and performing arts centers for tourist and
foreigner-only souvenir sales in accordance with Article 2 under the Enforcement Decree of the
Tourism Promotion Act.
International conference business
The international conference business is classified into the international conference facility and
planning businesses. The international conference facility business involves the establishment
and operation of international conferences, which create large-scale tourism demand. The
international conference planning business is to plan, prepare and administer international
conferences, which create large-scale tourism demand, on behalf of conference organizers.
Tourist convenience facilities
Under the Tourism Promotion Act, tourist convenience facilities (as of December 2013) include 11
categories: Tourist entertainment restaurant businesses, performing arts centers for tourists,
entertainment and restaurant businesses exclusively for foreigners, tourism restaurant businesses,
city circle tour businesses, tourist photography businesses, passenger vehicle terminal facility
businesses, tourist pension businesses, rope way ride tour businesses, Hanok (Korean traditional
house) experience businesses and guest house businesses for foreign tourists.
28 TOURISM & LEISURE
Casino
With the amendment of the Tourism Promotion Act, the casino business was designated as a
tourism industry as of August 3, 1994, where the MCST has the authority to oversee, monitor and
regulate. Notwithstanding the foregoing provisions, the Jeju Island Provincial Government has
the authority to oversee the licensing and regulations over casinos on Jeju Island as of July 2006,
in accordance with the Special Act on Jeju Island Special Self-Governing Province.
Pursuant to the Tourism Promotion Act, Korean nationals are not allowed to gamble in Korean
casinos. However, Kangwon Land, which opened in October of 2000 and is set to operate until
2015, is open to Korean nationals to revive the local economy in former mining towns in Gangwon
Province in accordance with the Special Act on the Assistance to the Development of Abandoned
Mines Areas.
The government plans to adopt an open-bidding system to give preliminary approval for the
establishment of foreigner-only casinos to promote the construction of multi-purpose resorts
(comprehensive tourism facilities including lodging, MICE and entertainment).
•Special Act on the Establishment of Jeju Special Self-Governing Province and the Development of Free
International City (Act No. 7849, Enforcement Date: July 1, 2006)
Article 172
To promote foreign investments, foreigner-only casinos shall be approved for qualified applicants, who for
example invest USD 500 million or more in a tourism business on Jeju Island.
•Special Act on the Development of Enterprise Cities (Act No. 7310, Enforcement Date: May 1, 2005)
Article 30
A foreigner-only casino shall be approved if it is reflected in an implementation plan for a tourism and
leisure-type enterprise city and the applicant’s investments in the tourism business amount to KRW 500
billion or more.
•Act on Designation and Management of Free Economic Zones (Act No. 8667, Enforcement Date: June 8,
2008)
Article 23- 3
Foreign investors in a free economic zone can obtain approval for the operation of a foreigner-only casino, if
the total investment amounts to USD 500 million or more in three types of tourism businesses, such as
tourist hotels or international convention facilities.
03 GOVERNMENT POLICIES AND RELATED LAWS 29
Recreational facility business
Recreational facility businesses are divided to recreational complex facilities, general recreational
facilities and other recreational facility business. The recreational complex facility business installs
and operates more than six kinds of amusement rides or devices, which shall be subject to regular
safety inspections, in a large indoor or outdoor site, while the general recreational facility business
installs and operates more than one amusement ride or device, which shall be subject to regular
safety inspections. Other recreational facility businesses install and operate amusement rides,
which are not subject to regular safety inspections. In 2005, the amendment to the Tourism
Promotion Act adopted a system to permit the establishment of a recreational facility business, on
the condition that proper facilities and equipment shall be established within the period
prescribed by the Decree of the MCST.
Horse-riding range business
As of 2005, the horse-riding range business is required to file a report as a sports facility business
with the municipal or Gun or Gu offices, exempted from the registration requirement with
municipal or provincial authorities.
The government abolished the rule, which restricts horse-riding businesses from recruiting more
members in excess of the total capital investments, in 2010 and eased requirements for the horse-
riding range facilities in 2011 (outdoor 3,000 m2, indoor 1,500 m2, more than 10 horses outdoor or
indoor 500 m2 and more than three horses).
Golf business
The government abolished restrictions on the total area of golf courses and club houses in 2005
and drastically lowered regional taxes and comprehensive real estate taxes in 2006.
The Korean government eased or abolished regulations on the establishment of lodging facilities
in the golf ranges in 2009, deregulated the establishment of golf courses and allowed the
establishment of golf courses in areas monitored under the pollution load system in 2010.
30 TOURISM & LEISURE 04 TOURISM BUSINESSES: SERVICE USERS AND TOURISM REVENUE 31

Korean tourism business enterprises reported total sales revenue of KRW 23.2 trillion (USD 21.1
Total tourism billion)* in 2013, and the tourist accommodation segment accounted for the highest share, with
revenue KRW 7.1 trillion.

The total sales revenue of Korean tourism enterprise businesses inched down 1.1% YoY in 2013.
* Currency conversion based on February 17, 2015 rate.

Total annual sales revenue of tourism businesses

(Unit: KRW mn, %)

Segment 2011 2012 2013 % chg

Travel 4,402,134 5,909,063 5,799,802 -1.9
Tourist accommodations 6,140,944 7,056,942 7,085,528 0.4
Tourist facility business 1,725,561 1,901,977 2,166,797 13.9
International conference 2,027,030 2,297,493 2,408,318 4.8
Casino 2,311,664 2,460,353 2,631,044 6.9
Recreational facilities 1,043,514 1,181,948 1,324,103 12.0
Tourist convenience facilities 2,546,204 2,742,202 1,874,445 -31.8
Total 20,197,051 23,549,978 23,289,037 -1.1

* Source: 2013 Basic Statistics of Tourism Businesses (Ministry of Culture, Sports and Tourism, October, 2014)

Korea had a total of 18,441 tourism business enterprises in 2013, 11,722 of which were in the travel
Number service business, accounting for the largest share.
of tourism
business The number of tourism business enterprises declined by 2.6% YoY in 2013.
enterprises
Number of tourism businesses
(Unit: No. of businesses, %)

Segment 2011 2012 2013 % chg

Travel 10,725 12,438 11,722 -5.8
Tourist accommodations 920 1,073 1,074 0.1
Tourist facility business 302 353 385 9.1
International conference 398 485 508 4.7

TOURISM Casino
Recreational facilities
Tourist convenience facilities
16
368
3,415
17
389
4,171
16
358
4,378
-5.9
-8.0
5.0

BUSINESSES: Total 16,144 18,926

* Source: 2013 Basic Statistics of Tourism Businesses (Ministry of Culture, Sports and Tourism, October, 2014)
18,441 -2.6

SERVICE USERS
AND TOURISM
REVENUE
 32 TOURISM & LEISURE 04 TOURISM BUSINESSES: SERVICE USERS AND TOURISM REVENUE 33

Average sales per tourism business enterprise amounted to KRW 1.26 billion in 2013. Total number of visitors to casino by year
Average By segment, the casino segment posted the highest average sales of KRW 164.4 billion per Type No. of users
sales revenue company. Casino 5,727,542
per tourism * Source: 2013 Basic Statistics of Tourism Businesses (Ministry of Culture, Sports and Tourism, October, 2014)
business Average sales revenue per tourism business enterprise
(Unit: KRW mil.)

enterprise Segment 2011 2012 2013 Number of recreational facility service users by year
Travel 410 475 495 Type No. of users
Tourist accommodations 6,675 6,577 6,597 Recreational complex facilities 46,467,699
Tourist facility business 5,714 5,388 5,628 General recreational facilities 36,216,200
International conference 5,093 4,737 4,741 Other recreational facility business 8,149,650
Casino 144,479 144,727 164,440 Total 90,833,549
Recreational facilities 2,836 3,038 3,699
* Source: 2013 Basic Statistics of Tourism Businesses (Ministry of Culture, Sports and Tourism, October, 2014)
Tourist convenience facilities 746 659 428
Total 1,251 1,245 1,263 Number of international conference facility service users by year
* Source: 2013 Basic Statistics of Tourism Businesses (Ministry of Culture, Sports and Tourism, October, 2014)
Type No. of users
International conference facility business 24,609,507
* Source: 2013 Basic Statistics of Tourism Businesses (Ministry of Culture, Sports and Tourism, October, 2014)
Total number of users for Korean travel service companies
Tourism
Total number of travel service users by year
service users
by segment Type No. of users
General travel 20,154,532
International travel 5,119,099
Domestic travel 9,417,624
International & domestic travel 10,847,306
Total 45,538,561
* Source: 2013 Basic Statistics of Tourism Businesses (Ministry of Culture, Sports and Tourism, October, 2014)

Total number of tourist accommodations service users by year

Type No. of users
Tourist hotels 47,826,137
Other hotels 5,405,017
Resort condominiums 46,494,275
Total 99,725,429
* Source: 2013 Basic Statistics of Tourism Businesses (Ministry of Culture, Sports and Tourism, October, 2014)
34 TOURISM & LEISURE 04 TOURISM BUSINESSES: SERVICE USERS AND TOURISM REVENUE 35

Number of tourist convenience facility service users The Korean tourism industry can be divided into Korean tourists and inbound foreign tourists.
Expenditure
The total number of tourist convenience facility service users amounted to 143.21 million in 2013.
of the Korean Korean nationals traveling within Korea spent a total of KRW16.86 trillion in 2010, which breaks
tourism down to food and beverage (37.70%), tour and transportation (25.75%) and accommodations
Number of tourist convenience facility service users by segment
industry (11.50%).
Tourist convenience facility service provider No. of users
Tourist entertainment restaurant 4,433,904
Performing arts centers for tourists 7,964,336
Inbound foreign tourists spent a total of KRW 11.93 trillion in 2010, which breaks down to retail
Entertainment and restaurant business exclusively for foreigners 1,336,263 (34.50%), accommodations (30.5%) and food and beverage (18%).
Tourism restaurants 118,557,370
City circle tour 894,266 Tourism expenditure by Korean and foreign tourists by segment
Tourist photography 31,525
Korean tourist expenditure Foreign tourist expenditure
Passenger vehicle terminal facility 2,970,435 Segment
Share (%) Amount (KRW) Share (%) Amount (KRW)
Tourist pension 1,410,644
Retail (Tourist shopping) 6.87 1,158,267 34.50 4,117,307
Rope way ride tour 4,967,150
Food and beverage 37.70 6,356,135 18.00 2,148,160
Hanok (Korean traditional house) experience 557,165
Accommodations 11.50 1,938,874 30.50 3,639,938
Guest house business for foreign tourists 87,402
Tourist transport 25.75 4,341,392 5.00 596,711
Total 143,210,460
Transport assistance 1.87 315,278 0.00 0
* Source: 2013 Basic Statistics of Tourism Businesses (Ministry of Culture, Sports and Tourism, October, 2014)
Car rental 1.25 210,747 1.75 208,849
Travel 8.50 1,433,081 0.80 95,474
Culture & art performance 2.15 362,485 1.20 143,211
Number of tourist facility business users Sports & sporting events 1.75 295,046 1.00 119,342
The total number of tourist facility business users stood at 69.56 million in 2013. Leisure & entertainment 2.25 379,345 4.50 537,040
Other 0.41 69,125 2.75 328,191
Total 100.0 16,859,774 100.0 11,934,222
Number of tourist facility business users
* Source: Economic Effect Analysis of Tourism Industry (Korea Culture & Tourism Institute, 2011)
Type No. of users
Special recreation services 42,590,404
Auto camping site 838,054
Tourist cruise 2,928,150
Performing arts centers for tourists 1,545,572
Foreigner-only souvenir sales stores 21,662,767
Total 69,564,947
* Source: 2013 Basic Statistics of Tourism Businesses (Ministry of Culture, Sports and Tourism, October, 2014)
36 TOURISM & LEISURE 05 TOURISM INVESTMENT CASES 37

Project concept
East-Busan
To envision Busan as an international film city brimming with vitality and a new leisure space,
Tourism
which enables self-realization and stylish lifestyles; and to build a multi-purpose sustainable
Complex
marine leisure city with year-round activities

Project outline
Location: Daebyeon-ri, Gijang-eup, Gijang-gun, Busan Metropolitan City
Area: 3,662,725.4 m2
Project period: 2005 - 2017
Project scale: KRW 4 trillion (private investment: KRW 2.8 trillion)
Project stage: Foundation construction (75% completed) and investment attraction — as of
December 2013
Project owner: BMC Corp.
Website: BMC Corp. (www.bmc.busan.kr), East BusanTourism Complex (www.ebtc.co.kr, m.ebtc.
co.kr)
Key facilities
•Sports & entertainment facilities: Theme park, family activity park, golf range
•Resort & cultural facilities: National science center, Aqua World, medical town, culture & art
complex, etc.
•Accommodation facilities: Landmark hotel, branded hotel, traditional hotel, holiday
condominium, etc.
•Shopping facilities: Outlet mall, ocean view restaurant, food town, entertainment & shopping
malls, etc.

Progress
Final approval stage: Tourism Complex plans and city management plans are approved
•Facilities that have received investments are in the construction-approval process.

Site procurement: 100% completed (BMC Corp., land condemnation completed in 2008)

TOURISM Investment progress: 19 out of 34 facilities (75% of the total area)

INVESTMENT •Theme park, outlet mall, Aqua World, national science center, golf range, landmark hotel, food
town, etc.

CASES
38 TOURISM & LEISURE 05 TOURISM INVESTMENT CASES 39

Investment method Project concept

Jipo-Unyeo
Acquisition of individual plots or entire sites to build and operate tourism facilities To promote the Jipo-Unyeo Tourism Complex as a center of marine leisure activities and a multi-
Tourism
purpose marine and golf resort that offers easy access to the Seoul Capital Area and various
Complex in
Project characteristics and advantages tourism activities
Anmyeon
Greater flexibility in the development and investment methods: The development of individual Island
Project outline
facilities, openness to creative planning, favorable payment conditions for site acquisition (long-
term installment payment, lease, etc.), real estate investment immigration (Unyeo District)
Location: Nudong-ri and Janggok-ri, Gonam-myeon, Jungjang-ri, Anmyeon-eup, Taean-gun,
Growth of the Gimhae Airport and Busan KTX enhances connectivity to downtown Busan, South Chungcheong Province
its neighboring cities, such as Ulsan and Gyeongju, and the Seoul Capital Area. In addition, Concept: Family-oriented comprehensive marine tourism complex
Busan has strong potential as a tourist attraction thanks to its easy access to densely populated Area: 538,599 m2
destinations such as Taiwan, Hong Kong and Beijing, which are located within 2,000 km. Project period: 2007 - 2016
Project scale: KRW 73.7 billion
The East Busan Tourism Complex is expected to attract tourists and create new tourist demand, Project owner: South Chungcheong Development Co. (www.cndc.kr)
generating synergy with tourist attractions such as the Busan Film Festival, Haeundae Beach, Key facilities
Songjeong Beach, Haedong Yonggungsa Temple, filming locations and ceramic towns and •Recreation and culture facilities: Water park, aquarium, artificial beach, amusement park
tourist events such as the Gijang Anchovy Festival, Conger Festival, Fishing Blessing Ceremony •Accommodations: Condominium, pension park, beach house
and Fishing Town Festival. •Commercial facilities: Themed shopping malls on the beach, water garden shopping centers

East-Busan Tourism Complex (Long-term Planning) Bird's Eye View (Jipo District)
Location: Nudong-ri and Janggok-ri, Gonam-myeon, Jungjang-ri, Anmyeon-eup, Taean-gun,
South Chungcheong Province
Concept: Golf resort tourism complex
Size: 2,363,574 m2
Project period: 2007 - 2016
Project scale: KRW 316.8 billion
Project owner: South Chungcheong Development Co. (www.cndc.kr)
Key facilities
•Leisure & culture facilities: 27-hole golf course
•Accommodations: Fairway Villa, condominium
•Commercial facilities: Themed shopping center

Investment method
Site acquisition for project execution
40 TOURISM & LEISURE 05 TOURISM INVESTMENT CASES 41

Progress Aerial view of the Jipo District of Anmyeon Island (tourism zone)
Final approval stage: Tourism Complex Establishment Plan to be approved in June of 2014 Site
procurement: 97.9% completed
Investment progress
•Public investment: Pending approval
•Private investment: Investment stage

Project characteristics and advantages

97.9% of the project site is public property, which makes it easier to acquire sites and to offer
more competitive prices compared to other sites in neighboring tourism complexes.

The project is designated as a foreign investment zone, where an investor of USD 20 million or
higher is eligible for a corporate tax exemption for up to five years and a 50% corporate tax cut
for the following two years. The government will support infrastructure such as road, water and
sewage, electricity and telecom.
Aerial view of the Unyeo District of Anmyeon Island
The project site is accessible by the West Coast Highway and Route 96. The opening of the
Anmyeon Island-Boryeong Bridge, which connects the islets to the mainland, will further
enhance accessibility.

The project is expected to attract tourists thanks to various international events such as the
Anmyeondo International Flower Fair, Anmyeondo Art Festival, Taean Lotus Festival, Taean
Lily Festival and Yeongmok Port Seafood Festival and local natural tourism resources such as
Anmyeondo Kkotji Beach, Taean Haean National Park and the Taean tidal flats.
 42 TOURISM & LEISURE 05 TOURISM INVESTMENT CASES 43

Project concept Investment method

Southwest To create a world-class eco-friendly resort and leisure city, maximizing the Southwest Coast’s Pre-sale prior to the completion of construction, capital investments (construction investors,
Coast Tourism superb natural and cultural heritage and offering tourism, leisure, residential, education and financial investors, strategic investors)
& Leisure City medical services and industrial opportunities

Progress
Project outline
Guseong District: Final stages for approval (execution plans approved, December 2012)
(Guseong District)
Location: Guseong-ri, Sanggong-ri, Deoksong-ri, Sani-myeon, Haenam-gun, South Jeolla
Sampo District: Stage 1 (F1 race track) construction completed (September 2011), Stage 2
Province
construction execution plans outsourced
Project area: 20,960,000 m2
Project period: 2006 - 2025
Samho District: Final stages for approval
Total project cost: KRW 4.68 trillion
Project owner: Southwest Coast Enterprise City Development Co.
Website: solaseado.go.kr Project characteristics and advantages
Key facilities Easy to purchase land at a competitive price
•Public: School, cultural facilities, park facilities, medical centers, etc.
•Private: Theme park, marine sports center, golf range, etc. Full support from local authorities and immigrant investor program

(Sampo District) Ideal location with growth potential as a global leisure cluster thanks to its excellent natural
Location: Sampo-ri, Samho-eup, Yeongam-gun, South Jeolla Province resources
Project area: 4,289,000 m2
Project period: 2006 - 2021 Positive impact on asset values thanks to the establishment of world-class tourism and leisure
Total project cost: KRW 1.9 trillion cities and ideal residential environment
Project owner: KAVO and South Jeolla Development Co.
Website: solaseado.go.kr Sampo District Samho District Guseong District

Key facilities
•Public: Road, parking lot and park, etc.
•Private: Marina facilities, F1 related facility complex, residential sites, etc.

(Samho District)
Location: Nanjeong-ri, Samho-eup, Yeongam-gun, South Jeolla Province
Project area: 8,661,000 m2
Project period: 2006 - 2025
Total project cost: KRW 1.6 trillion
Project owner: Southwest Coast Leisure Corporation
Website: solaseado.go.kr
Key facilities
•Public: Cultural facilities, public buildings and park, etc.
•Private: Sports complex, resort complex, marina facilities, etc.
44 TOURISM & LEISURE 06 RELATED ORGANIZATIONS AND ASSOCIATIONS 45

The Ministry of Culture, Sports and Tourism actively promotes the tourism industry as one of the
Ministry of national strategic industries in order to enhance Korea’s competitiveness in the global tourism
Culture, Sports market and makes various policy efforts to deliver world-class tourism services and enable
and Tourism sustainable high-quality tourism.
(www.mcst.
go.kr)
The Korea Tourism Organization executes government tourism policies and develops and
Korea Tourism provides various high value-added tourism products, such as medical tourism, cruise tourism
Organization and K-pop culture tourism. The Korea Tourism Organization is pioneering the global tourism
(kto.visitkorea. market backed by its network of 31 overseas offices, which serve as an outpost for global
or.kr) marketing. In addition, the Korea Tourism Organization closely cooperates with local authorities
and regional tourism industries in the marketing and advertising segment.

The Korea Culture & Tourism Institute provides policy suggestions and directions in the tourism
Korea Culture sector by conducting various research projects commissioned by the central and regional
& Tourism governments, tourism-related international organizations and other agencies. In addition, the
Institute Korea Culture & Tourism Institute operates the Knowledge & Information System (www.tour.
(www.kcti. go.kr) to compile and provide information on the tourism industry.
re.kr)

Korea Tourism Association (www.koreatravel.or.kr)

Tourism The Korea Tourism Association represents the Korean tourism industry to promote sound
business industry development and collect and coordinate the opinions of industry representatives.
organizations The Korea Tourism Association cooperates with related organizations in Korea and abroad and
contributes to promoting the tourism industry and the interest and rights of members.

Korea Hotel Association (www.hotelskorea.or.kr)

The Korea Hotel Association was established as an industry organization with the aim of promoting
the sound development of the hotel industry and enhancing the interest and rights of member
RELATED companies. Its key responsibilities include making hotel-grading assessments and grading decisions
on behalf of the government, selecting beneficiaries for the Tourism Promotion Development Fund

ORGANIZATIONS (hotel operating fund), offering policy proposals and consultations for the government to support
the tourism & hotel segment and address pending issues, and training tourist hotel staff.

AND Korea Association of Travel Agents (www.kata.or.kr)

ASSOCIATIONS
The Korea Association of Travel Agents (KATA) was established with the purpose of promoting
the development of the travel industry and the interest and rights of members. The KATA
operates a Tourist Complaint Center to mediate damage claims filed by tourism consumers.
46 TOURISM & LEISURE
Korea Casino Association (www.koreacasino.or.kr)
The Korea Casino Association, as an industry organization, oversees the casino industry to
improve the operation of the casino business, provides greater service quality for users and
conducts research and promotion activities for the development of the casino industry.
The Korean Resort Condominium Management Association (www.condo.or.kr)
The Korean Resort Condominium Management Association, as a representative of the Korean
resort condominium industry, collects and coordinates industry opinions and cooperates with
related organizations in order to promote the sound development and efficient, reasonable
operation of the condominium industry.
Korea Association of Amusement Parks & Attractions (www.kaapa.or.kr)
The Korea Association of Amusement Parks & Attractions, a representative of the recreational
facility business, seeks to promote friendship and the interests of members and actively conducts
research, studies, inspections and promotions to enhance recreational facility safety. As such, the
association was established to promote active cooperation with the government for the sound
development of the recreational facility industry and to enhance and protect the interest and
rights of member companies.
Korea Association of Foreign Tourist Facilities
The Korea Association of Foreign Tourist Facilities is an association representing foreigner-
only entertainment restaurants located near U.S. army bases and port cities. The association
was established to support government tourism promotion policies, promote sound industry
development and enhance the interest and friendly relations of member companies.
Korea MICE Association (www.micekorea.or.kr)
The Korea MICE Association has about 200 MICE-related companies as members. On behalf
of the Korean MICE industry, the association collects and coordinates the opinions of industry
representatives and collaborates with related organizations in Korea and abroad in order to promote
the development of the Korean MICE industry and the rights and interests of member companies.
Furthermore, the association seeks to promote the development of the international conference
industry with the aim of enhancing public good and the rights and interests of the tourism industry.
Korea Association of Professional Congress Organizers (www.kapco.or.kr)
The Korea Association of Professional Congress Organizers represents the interest of member
companies, provides bidding information, promotes PCO and develops related human
resources. The association has 49 registered PCO companies as members, which operate in the
international conference planning business, have a specialized workforce and organization and
meet member qualification requirements.
06 RELATED ORGANIZATIONS AND ASSOCIATIONS 47
Korea Equestrian Federation (kef.sports.or.kr)
The Korea Equestrian Federation has pursued various projects to foster trainers and referees and
enhance the performance of equestrian riders in order to promote the Korean equestrian industry.
Korea Golf Association (www.kgagolf.or.kr)
The Korea Golf Association was established to improve the public’s physical health and promote
the golf industry through greater access to golf sports.
Korea Sailing Federation (www.ksaf.org)
The Korea Sailing Federation was established with the aim of introducing sailing and yacht sports
to the general public and supporting and fostering yacht players and organizations.
Reference 2013 Basic Statistics of Tourism Businesses (Ministry of Culture, Sports and Tourism, 2014)
2013 Survey of Korean Tourists (Ministry of Culture, Sports and Tourism, 2014)
2013 Survey of Inbound International Tourists (Ministry of Culture, Sports and Tourism, 2014)
2013 Annual Report on Tourism (Ministry of Culture, Sports and Tourism, 2014)
2013 Sport Whitepaper (Ministry of Culture, Sports and Tourism, 2014)
Economic Effect Analysis of Tourism Industry (Korea Culture & Tourism Institute, 2011)
Tourism Knowledge & Information System (www.tour.go.kr)
Ministry of Culture, Sports and Tourism (www.mcst.go.kr)
Ministry of Trade, Industry & Energy (www.motie.go.kr)
Investment Prospectus for Southwest Coast Tourism Leisure City (South Jeolla Province, 2013)
Investment Prospectus for Anmyeondo Jipo·Unyeo Tourism Complex Project
(South Chungcheong Development Co., 2013)
Legislation Plan on Camping Site Business (Korea Culture & Tourism Institute, 2013)
The Third Tourism Development Basic Plan (2012 - 2021) (Ministry of Culture, Sports and Tourism,
2011)
The Fifth Tourism Zone Development Basic Plan (2012 - 2016) (Local authorities, 2011)
Korea Tourism Organization (kto.visitkorea.or.kr)
Introduction to Investment in the Korean Tourism Industry (invest.visitkorea.or.kr)
Korea Culture & Tourism Institute (www.kcti.re.kr)
Economic Impact of Travel & Tourism 2014 Annual Update: Summary (WTTC, 2014) World
Tourism Barometer (Vol.12) (UNWTO, June 2014)
48 TOURISM & LEISURE 49

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