Korea
Tourism is a significant driver of economic growth in Korea. In 2018, it accounted for 4.7% of GDP and is estimated to support 1.4 million jobs, representing 5.3% of total employment. Travel exports represented 15.5% of total service exports in 2018.
International visit arrivals increased by 15.1% to 15.3 million in 2018. The largest visitor flows are from neighbouring countries, including China (up 14.9% over 2017) and Japan (up 27.6% over 2017). Together, these two inbound markets generated 50.4% of total international arrivals to Korea. Chinese Taipei outnumbered the United States for the first time as the third major source market.
Increased volumes were reflected in solid expenditure growth in 2018, with international visitor expenditure up 14.6% to KRW 16.7 trillion. Expenditure by Chinese visitors, now Korea’s leading market by value as well as volume, amounted to KRW 6.2 trillion in 2018. Other large markets showing strong growth included the United States (KRW 1.9 trillion) and Japan (KRW 1.7 trillion).
Total domestic trips totalled 311.2 million, an increase of 9.2% on 2017. Same day trips decreased by 14.1% to 147.9 million, while overnight travel rose by 44.7% to 163.2 million. The number of nights spent by domestic visitors in collective accommodation establishments totalled 408.9 million in 2018.
Chaired by the Prime Minister, the national tourism strategy meeting was established in December 2017. The meeting brings together not only the tourism minister but also related Ministers including those for foreign affairs, transport, law and justice, and maritime. In April 2019, the third meeting discussed ways to attract more international tourists and boost domestic travel to stimulate regional economies.
The Ministry of Culture, Sports and Tourism works closely with the Korea Tourism Organisation, which is the publicly funded and responsible for marketing and promotion of Korea domestically and abroad. The organisation has recently reformed its structure by further strengthening key departments and aligning these closely to the Government’s tourism policy priorities. These include tourism welfare, supporting the growth of tourism enterprises, safety management, international co-operation and the application of big data technologies to tourism.
As of August 2018, tourism became the responsibility of the Second Vice Minister within the Ministry of Culture, Sports and Tourism (MCST) with two main directorates:
Tourism Policy Bureau, encompassing separate divisions for Policy, Domestic Tourism Promotion, International Tourism and Tourism Service Enhancement.
Tourism Industry Policy Bureau, comprising divisions for Tourism Industry Policy, Convergence of the Tourism Industry and Tourism Development.
The Tourism Promotion and Development Fund supports tourism under the Framework Act of Tourism. In 2018, the total expenditure of the Fund was approximately KRW 811 billion, including KRW 97 billion for tourism industry promotion, as well as tourism infrastructure and other projects to attract foreign tourists.
Source: OECD, adapted from the Ministry of Culture, Sports and Tourism, 2020.
Korea’s Tourism Innovation Strategy announced in April 2019 was the result of the third national tourism strategy meeting. It has guided the tourism industry through a period of impressive growth in visits and expenditure. Nonetheless, the industry faces a range of challenges to ensure that the pace of growth can continue in a sustainable way. Key challenges include:
Securing continued growth of inbound tourists and higher yielding tourists by enhancing visa facilitation.
Strengthening the competitiveness of tourism SMEs in response to future tourism trends (Box 2.5).
Increasing the dispersal of visitors to less visited regions.
Enhancing the attractiveness and quality of tourism products and services.
Under the auspices of the Tourism 2020 Strategy, Korea is pursuing a range of policy responses to address these challenges. First, the government will ease visa rules to draw more visitors from China, Vietnam, the Philippines, Indonesia and India. Second, four local municipalities will be developed into regional tourism hubs, and tour programmes will embrace more cultural content, including K-pop, to attract foreign fans of Korean pop culture. The government will also increase subsidies for tourism to a level similar to that allocated to manufacturing industry. It will provide tourism ventures with up to KRW 198 billion.
To encourage foreign tourists to travel to other destinations within Korea, the government and the tourism industry have developed several measures. One specific policy is to extend multiple entry visas to Chinese nationals that reside in the country’s more economically prosperous cities. Currently the visas – which allow for unlimited entry and exit to and from Korea during a certain period of time – are only available to residents of Beijing, Shanghai, Guangzhou and Shenzhen.
In addition to more aggressive marketing of Korean pop culture, another proposal being advanced by the government is expanding tourism to include the Demilitarised Zone, a border area of tourist interest which is around 250 kilometres long and about 4 kilometres miles wide.
Other policy initiatives include:
Life cycle tourism programmes tailored to all age groups from children to seniors. Plans are also dedicated to attract and support underprivileged groups.
Customised tourism content, promotion, and marketing strategies for each major source market.
A dedicated online platform and improved digital marketing strategies to enhance the experience for independent travellers. Recommended tour itineraries have been developed with an opportunity to purchase products.