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Q&A: Korea’s Tourism Industry Turns Crisis into Opportunity

Thalif Deen Interviews SAMUEL KOO, president and CEO of the Seoul Tourism Organisation

UNITED NATIONS, May 28 2009 (IPS) - The global financial crisis, which has had a devastating impact on trade, finance and industry, is threatening to unleash its destructive power on one of the vibrant economic lifelines in the Asia-Pacific region: tourism.

Samuel Koo Credit: Seoul Tourism Organisation

Samuel Koo Credit: Seoul Tourism Organisation

The Madrid-based U.N. World Tourism Organisation (UNWTO) says the demand for international tourism has deteriorated – and continues to deteriorate – due to the spreading economic recession.

The impact is felt heavily in the Asia-Pacific region, described as “one of the fastest growing tourism regions in the world”, with tourist arrivals declining in Hong Kong, Thailand, Singapore, Macao and China.

The only exception is South Korea where the sharp depreciation of the country’s currency, the won, has triggered a dramatic increase in incoming tourists.

“A sharply depreciated Korean won has turned South Korea into a bargain destination for overseas travelers,” says Samuel Koo, president and chief executive officer of the Seoul Tourism Organisation.

“All Seoul hotels in the top categories are solidly booked, and the spillover effect is sending tourists to other destinations in Korea,” he said.

In an interview with U.N. Bureau Chief Thalif Deen, Koo said nearly seven million foreign visitors came to Korea last year.

“And barring unforeseen developments, the number is expected to grow to almost eight million this year,” he pointed out, on the eve of an international conference on tourism in Seoul next week.

The conference, scheduled to take place Jun. 2-5, is hosted by the Seoul Metropolitan Government and organised by the Seoul Tourism Organisation based in the Korean capital.

Excerpts from the interview follow.

IPS: The UNWTO says international tourism demand has deteriorated due to the impact of the global economic recession. How severe is the impact on Asia and the Pacific? SAMUEL KOO: The global economic downturn is causing a serious and direct influence on the world’s tourism industry – for example, Egypt’s tourism is down 20 percent since the crisis began last year – and Asia overall is no exception. Singapore, Thailand, Hong Kong and Macao, which all count tourism as major sources of national income, have been particularly hard hit.

Japanese travel industry leaders reported at a meeting in Tokyo last week a continuing drop in both inbound and outbound tourists. The construction of new convention facilities, hotels and resorts is being pushed back for the lack of funding and other related reasons.

South Korea on the other hand is seeing a dramatic increase in incoming tourists. Japanese tourists are up by some 50 percent this year over the same period last year, Hong Kong tourists about 15 percent and Chinese more than five percent. The reason? A sharply depreciated Korean won.

IPS: What role has tourism played in the South Korean economy? And what are your hopes of survival in a recession-struck industry? SK: Until recently, Korea has not been among the preferred tourist destinations in Asia. But with vigorous efforts by the central and local governments, backed by private sector initiatives, Korea has been adding tourist attractions and mounting aggressive overseas marketing.

And now Korea, and Seoul in particular, are beginning to appear on international media lists of desirable tourism destinations. International media like MSN.COM, the Denmark newspaper REJSELIV, the U.S. tourism magazine, Global Traveller, and the Cosmopolitan magazine continue to feature Korea and Seoul in their articles.

In 2008, the tourism industry accounted for 6.8 percent of the country’s total gross domestic product (GDP), and there appears to be a wide recognition that the number will grow, thanks to strong government efforts.

IPS: Has the global economic crisis been aggravated by the influenza threat curtailing tourism in the Asia-Pacific region. How best can this new threat be overcome? SK: Fewer than half a dozen reported swine flu cases in Korea have caused substantial cancellation of inbound Korea tours by Japanese. The flu fears have similarly dampened the travel throughout East Asia despite repeated assurances from health authorities that the flu is under control.

Because of the small number of new cases since the first case was reported over a month ago, South Korea is considered a safe destination, and the Seoul Tourism Organization has been stressing this point in its overseas promotional meetings in Japan and China.

IPS: Since tourism has always showed remarkable resilience during other crises in Asia and the Pacific, how confident are you of the ability of countries in the region to survive the current crisis? SK: We are confident East Asian tourism powerhouses will recover from the current recession in two or three years, especially because Chinese tourists continue to travel in great numbers. Inevitably, there will be some setbacks and delays in the planned new constructions through the region, but our expectation is that, too, will be rather short-lived.

In Korea, the tourism industry is actually turning the crisis into an opportunity to strengthen its inbound tourism and to mount vigorous overseas marketing. We are determined to keep the upward momentum even after the effects of the devalued Korean Won disappear.

Seoul, selected as the World Design Capital 2010, has embarked on a mammoth effort to make Seoul more attractive through bold renovation and new construction such as the Han River and Namsan Mountain Renaissance projects. Seoul is also being reborn as a green city. Its air is much cleaner now, with city buses running on natural gas.

IPS: Is the tourism industry in Korea seeking stimulus measures from the government in order to mitigate the effects of the current crisis? SK: Not because of the crisis, but the Korea Tourism Organization and the Seoul Tourism Organization, with the support of the central government, have an on-going project helping the tourism industry in various ways including tax cuts for hotels, as part of the general tourism promotion effort.

Another example is convention marketing. The Korea Convention Bureau and the Seoul Convention Bureau are taking stimulus measures to host international conventions and exhibitions.

For instance, the Seoul Tourism Organization offers up to 60 million won (just under 50,000 dollars) in financial assistance for each international convention or an exhibition attracted to Seoul (other cities offer similar programmes with varying amounts).

Seoul already ranks second after Singapore in the number of international conventions attracted in 2008 (according to the International Congress & Convention Association).

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