Tag Archive | "tourism"

Is Trouble Bubbling Under the Surface of South Korea’s Tourism Boom?

By Jenna Gibson

Walking down one of Seoul’s many shopping streets, sandwiched between food carts and two-story portraits of the latest k-pop phenom, store clerks hover, calling out to the crowds as they pass by in various foreign languages. “Ohayo gozaimasu! Nihao! Hello! Come in! Big sale today!”

They know their audience – tourists in South Korea, especially those from nearby Japan and China, are spending a huge chunk of their time – and money – stocking up on popular Korean products. According to new numbers from the Korea Culture and Tourism Institute, tourists visiting South Korea spent 5.5 trillion won (around $4.8 billion) on shopping in 2015. That’s 52.8 percent of the total 10.4 trillion won foreigners spent on travel in Korea last year. This was followed by lodging at 23 percent, food at 8 percent, and medical at 3.9 percent.

Korea Tourists Graph

Interest in Korean products, especially in the cosmetics industry, can be directly attributed to the popularity of the popular actors and singers who smile out from nearly every shop window. According to a recent survey of foreigners in Seoul’s busiest shopping neighborhoods, more than two thirds said they became interested in Korean cosmetics products after “getting to know Korean dramas or K-pop stars.” This led the study’s author to conclude that “Interest and affection for Korean culture, or hallyu, has a direct correlation to growth in the cosmetics industry.”

According to the Gangnam District Office, which oversees the k-pop mecca of Seoul, use of Chinese UnionPay cards in the Cheongdam-dong neighborhood jumped from 5.2 billion won in 2012 to 26.3 billion won in 2014, a five-fold increase.

In a more shocking example, after a Korean boy band member mentioned Ryeo Shampoo on a Chinese reality program, the brand’s sales skyrocketed 630 percent. The shampoo’s domestic sales also increased by 300 percent at the time – its manufacturer, AmorePacific, attributed this increase to Chinese tourists stocking up while in Seoul.

But this reliance on the whims of hallyu fans, coupled with some recent scandals about shoddy tour services, indicate that trouble may be bubbling under the surface for the Korean tourism boom.

Doubling Down on Hallyu

To fully capitalize on the influx of k-culture fans visiting South Korea, the government is trying to introduce new ways to connect with their favorite songs and TV shows – and spend more tourist dollars in the process.

Gangnam, a neighborhood in southern Seoul, is leading the charge. Gangnam’s Cheongdam-dong area is home to the headquarters of many of the major entertainment companies, and is notorious among for hallyu fans for celebrity spotting. “This place is packed from morning to night with foreigners who want to spot K-pop stars,” a worker at a Cheongdam-dong café told the Korea Joongang Daily.

The Gangnam District Office aims to capitalize on this interest through several new projects – from renaming a major street “K-Star Road” to unveiling a gargantuan statue in the shape of Psy’s hands that automatically plays “Gangnam Style” when visitors walk by.

All of this is about bringing hallyu tourists – and their wallets – to Gangnam. “Every fourth Friday of the month we plan to block a part of 79 Apgujeong Road that passes the JYP Entertainment building to host K-pop concerts and souvenir pop-up stores, developing the region into a ‘K-pop special economic zone,’” Park Hee-soo, head of the tourist industry department at the Gangnam District Office, told the Korea Joongang Daily.

Gangnam is not alone. Paju, a city north of Seoul, has announced that they will be turning Camp Greaves, a former U.S. military facility where parts of the ultra-popular drama “Descendants of the Sun” was filmed, into a tourist destination. This move is likely trying to repeat the success of Namiseom, a small island that experienced a spike in visits after being featured in the k-drama classic “Winter Sonata.” Even now, more than a decade after the show aired, the island gets 3 million visitors a year (up from 270,000 in 2001, prior to the Winter Sonata craze).

Quality over Quantity?

But some have been overzealous in their efforts to attract tourists. A recent scandal exposed the background of some Korean travel agencies that target Chinese tourists. Because of the intense competition to serve the increasing number of Chinese visiting Korea each year, some agencies have resorted to paying Chinese travel agencies a commission to secure customers while slashing prices. This results in tour packages that include cheap hotels, low-quality restaurants…and plenty of trips to the mall.

To make up for lost costs from tour packages, these tour companies make deals with shop owners to get a commission from sales. In some cases, the Joongang Daily discovered, Chinese tourists were brought to six shopping malls in just two days.

These issues have the serious potential of souring Korea’s reputation as a tourist destination. One local newspaper in China covered the issue in an article titled “Korean tourism Ends up Being Pathetic,” telling the story of a travel guide who wouldn’t let the tour bus leave a shopping center because the passengers didn’t spend enough money.

“The cheap group tours are not only unprofitable but also hamper the national image, which could cause damage in the long-term. We have to change the tourism paradigm to focus on value-added programs,” an official from the culture ministry told Yonhap News.

The Korean government is working to address this issue. The Ministry of Culture, Sports and Tourism has started cracking down on these tour package programs, dealing with 6,175 complaints in 2015 and revoking the license of 68 tour operators for “offering unreasonably cheap tour programs and hiring unqualified tour guides.”

It’s possible the industry can ride high on the Korean Wave for quite some time – skeptics have been predicting the death of hallyu almost since its inception and it has only continued gaining strength. However, rather than investing so much in a potentially fleeting trend, the Korean government needs to take a serious look at diversification. As Lee Hun, a professor at Hanyang University, told Yonhap News, “It is time for the tourism industry to shift priority from quantity to quality.”

Jenna Gibson is the Director of Communications at the Korea Economic Institute of America. The views expressed here are the author’s alone.

Photo from Rolf Venema’s photostream on flickr Creative Commons.

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North Korea Allows Internet Access (For Foreigners)

By Chad O’Carroll

On Friday the Associated Press Pyongyang bureau reported that North Korean authorities will allow foreign visitors to access the internet using cellular devices from March 01. Predictably, the news was published with the caveat that access conditions will not change for local citizens, who will remain cut off from internet access and remain unable to make calls to foreign countries for the foreseeable future. As such, the news triggered skepticism in some quarters that the step was undertaken simply to encourage tourism and increase revenue for the North Korean government. But even if that is the case, there are nevertheless several reasons why we should be encouraging the relaxation in North Korean telecommunications.

Just four weeks ago, rules that prevented tourists bringing their cell phones in to North Korea were finally relaxed, a development that meant foreigners would no longer have to surrender their devices upon arrival in Pyongyang. Coming just weeks after Google Chairman Eric Schmidt’s recent trip to North Korea, many may now be wondering if his visit was behind the cellphone and internet access developments. But while some might see the recent news as evidence that Pyongyang took heed of Schmidt’s pronouncements, comments made by Orascom staff to Xinhua News suggest these changes had been long planned and were not consequently related to the Google trip.

Over the past four years Egypt’s Orascom Telecom Company has been working closely with North Korea to develop and expand the KoryoLink cell phone network. Run as a joint venture based on 75% Orascom and 25% North Korean ownership, the Cairo based tech firm put a strong focus on ensuring the DPRK cell network would use the latest 3G cell tower technology from the outset. As a result of this step, the North Korean network was always going to be ready for internet access, provided of course there was sufficient political will in Pyongyang. Now, with 92.9% of population areas covered by KoryoLink’s network, as a result of today’s news it seems that foreigners should be able to access the net wherever they go.

While only 30,000 tourists visit North Korea per year, their potential to access the internet could prove to be the first step towards a gradual opening up of the DPRK telecommunications infrastructure. North Koreans already comprise some two million KoryoLink subscribers, though currently they can only use their devices to communicate internally. However, some of these subscribers can already access limited domestic data services, to find weather reports or local news, for example. Looking to the medium to long-term future, it’s therefore quite possible that this latest move could pave the way for North Korea to roll out a limited internet service (perhaps similar to Iran) to its own citizens as a logical next step.  The same thing has already happened in Cuba, where tourist based access paved the way for increasing domestic access and even the emergence of blogs written by Cubans, but published via USB keys passed to foreigners who have net access in international class hotels.

Another benefit of foreigners being able to access the internet while in North Korea is that it could seriously catalyze the speed at which important world news gets to the country. While those coming into regular contact with foreigners tend to come from the top tiers of North Korean society, that foreigners will now theoretically be able to spread news as it happens means the development will lead to a new and credible addition to the country’s infamous “bush telegraph”. And though little is known about how the North Korean government intends to prevent local citizens from ever using approved devices to access the internet, we can bet that some will find a way. To be sure this will be a tiny fraction of people, but given North Korea’s history of an impermeable iron curtain, it is meaningful in any case.

It will be particularly interesting if foreigners will be able to access South Korean news and information websites through the KoryoLink infrastructure. Even if these and other websites do turn out to be blocked, it won’t take long for crafty visitors to get around the rules using VPN and other IP proxy technologies. As such, the only way Orascom will really ever be able to assure its North Korean hosts of absolute control will be to shut off access for everyone, completely.  Such a move can’t be discounted, with cell usage having been dramatically curtailed in a u-turn policy change on made by Pyongyang in 2004, the year an explosion took place allegedly near to Kim Jong Il’s passing train.

Another benefit of the move will be that it will be easier for visitors to share with the world the reality of life in North Korea. With photography having long been restricted and visitors subject to random photo deletions by over-zealous border guards, the latest development should theoretically allow foreigners to upload pictures straight to the internet, as quickly as they take them. Naturally, it is likely that access will be monitored to some degree, but the more widespread access becomes, the harder it will be for DPRK authorities to track use.

One potential hurdle to the above advantages relates to costs.  To date foreign residents and business people have been able to access the internet access using satellite technology, but the costs have been so exorbitant that it has significantly reduced the potential for the internet to have many of the positive effects described above.  Unfortunately, figures obtained by the Wall Street Journal suggest that for its part, the new mobile internet service will not be cheap, with a set up fee of around 150 EUROS for the SIM card, then data fees of around 150 euros for 2GB of bandwidth. Prices this high mean it will be expensive for people to get the type of access required to create the various impacts detailed above, but it’s a start nonetheless. And while the high fees reflect that access is currently aimed more at long term residents than tourists, a KoryoLink technician said that his team was working to persuade the North Korean government to get permission to introduce cheaper and short-term tourist focused services. Time will tell how significant Friday’s development is, but it seems clear that any opening, no matter how small, should be welcomed and encouraged vigorously.

Chad 0′Carroll is the Director of Communications for the Korea Economic Institute. The views expressed here are his own.

Photo from djking’s photostream on flickr Creative Commons.

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Selling Korea

By Ben Hancock

South Korea made an appearance in this past Sunday’s New York Times list of 45 must-visit travel destinations for a surprising reason — golf courses. No one could quibble with the fact that Korea has churned out more than its fair share of club-wielding pros (Pak Se-ri and K.J. Choi come quickly to mind). But is playing 18 holes in Songdo New City really the nation’s hottest selling point for 2012, the final year of its official “Visit Korea” campaign? Especially for U.S. readers, for whom a trip to the peninsula involves a long-haul flight of anywhere from nine to 13 hours, I can’t imagine that has much appeal.

Korea has long had trouble putting a finger on how to sell itself to Westerners — a fact that has been embodied by its frequent slogan changes (“Dynamic Korea,” “Korea Sparkling,” and the latest, “Korea: Be Inspired”). This fortunately doesn’t appear to have stopped a steady inflow of travelers from the West. My analysis of figures from the Korea Tourism Office shows that in the prime vacation months of July and August, Korea enjoyed year-on-year growth in 2010 of 2.84 percent in visitors from the United States who said their primary reason for visiting was tourism. That number increased in 2011 by 3.85 percent to 83,500 summer visitors from the U.S. The story is even brighter when one looks to Europe — growth from summer 2009 to 2010 of 13.44 percent, with notably weaker but still impressive growth in 2011 of 6.01 percent.

But we should ask whether it could do better. The “2010-2012 Visit Korea Year” — which is inexplicably three years long — doesn’t seem to have brought exceptional tourism growth from the West, for example. Looking at full years in terms of tourism-oriented trips (as opposed to business travel or official visits), the growth in visitors from the U.S. has been moderate: roughly 444,000 in 2009; 476,000 in 2010; and 451,000 between January and November of last year.

By comparison, the growth from China has been remarkable, though we should take into account some conflicting factors — it is of course much closer in proximity, but does not have a visa exemption agreement with Korea (which the U.S. has). China also obviously is much larger population-wise than the U.S. All that in mind, the numbers are still surprising. Tourists from China nearly doubled in 2010 to 1.01 million from 581,000. This figure appears on track for even more growth; in the first 11 months of last year, there were 1.2 million visitors from China.

The reasons other Asians visit Korea are different than those for Westerners. While visitors from China or Japan are likely to focus on shopping, an American may be more interested in doing a temple stay or seeing the DMZ. The boom in Kpop’s popularity Stateside may finally mean that the “Korean Wave” is now a common attraction in both Asia and the West. But for the large majority of Westerners, Korea has fallen down in distinguishing itself from its neighbors. And getting back to my original point, I think luxury golf is probably the wrong way to go.

Coming up with the right selling point for Korea is not an easy proposition. Korea has gorgeous and unique temples, striking mountains, and metropolises that become awash in neon at night. And so do China and Japan. It’s perhaps not surprising that many travelers from the West I have talked to tack visits to Korea onto longer journeys that also hit Tokyo or Hong Kong.

Korean food is something the tourism authorities have rightly latched onto, but I would argue that this is not enough to really bring travelers in droves. The “Peace & Life Zone (PLZ)”– a nature trail that takes its name from the adjacent DMZ — is another interesting idea as green tourism becomes increasingly popular. In order to really become a nation that even the uninitiated will want to visit, however, Korea needs to promote what is probably most difficult to wrap one’s hands around: its history and culture. It needs to be an idea. Instead of trying to contrive one aspect or another as the reason to visit Korea, tourism promoters should approach the task holistically.

There are many ways to do this. One idea would be to promote homestay or exchange experiences for high-school and college students in the U.S. Levying for more Korean language teachers in schools or private academies is yet another possibility that could increase cultural interchange. Helping to plan more Kpop concerts (like the one last fall) or working with publishers to translate potentially attractive Korean novels are still more ideas. Of course, these are not the end goals in and themselves, but instead are methods aimed at slowly raising the profile of Korea in the West — giving it gravity as a destination.

Ben Hancock is a journalist who has studied Korean language and culture since 2004, and who lived in Korea most recently from 2008 to 2010. His views are his own.

Photo from Jongho Won’s photostream on flickr Creative Commons.

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Seeing What I Could See in North Korea

By Nicholas Hamisevicz

In late August, I joined a tourist group led by the Young Pioneer Tours company on a one week trip to the Democratic People’s Republic of Korea (or North Korea). Visits to Pyongyang, Mount Paektu, Samjiyon, Chongjin, and Wonsan attracted adventure tourists, some of whom had been to other places like Iran, Burma, and Bosnia, as well as Korea and China analysts like me.  Although it was only my first time to North Korea and without any meetings with government officials, four things stood out about policy toward North Korea: connections with China, small cracks in the North Korean system and story, direct evidence of the third generation leadership transition in North Korea, and that unification will be a significant financial burden for South Korea. Granted, these are not huge revelations, but they are apparent as one travels by bus and plane for a week throughout North Korea.

First, the connections with China are easily visible. Chinese tourists abound, from our hotels in Pyongyang to the Be Dae Bong Hotel near Samjiyon and Mount Paektu. Gift shops and book stores seemed more comfortable using Chinese Yuan than Euros, which the government run Korea International Travel Company had suggested for our group, giving Yuan back as change rather Euros. Further evidence of China-North Korea connections were on full display during the Arirang Mass Games performance held at the May Day Stadium in Pyongyang. The second to last scene celebrated the friendship and history of China and North Korea, with dancing pandas, flags of the two countries, and Korean and Chinese characters being flashed on the placards.

Second, in a recent episode of KEI’s Korean Kontext podcast, Curtis Melvin, author of the North Korea Econ Watch blog, mentioned that one can see “cracks” in the North Korean system and story when they visit. Some of these cracks could be seen on our trip.  Hot water was only available from 7:00AM to 8:000AM at the Be Dae Bong Hotel and in our Wonsan hotel; moreover, we had no running water at our hotel in Chongjin. As other visitors have reported, there is a lot of construction happening in Pyongyang and other cities, yet few pieces of heavy machinery that could aid in the construction, such as cranes and bulldozers, are visible on the construction sites. Heavy machinery was also absent from the fields of corn alongside the road from Orang airport to Chongjin.

Nowhere was the fear of the revelation of the cracks in the North Korean system more evident than when we traveled to the port city of Chongjin. As mentioned, our hotel had no running water. The original permission to take pictures of anything not related to the military and checkpoints was now gone, and we had to ask for permission for every photo we wanted to take.  Our North Korean tour guides seemed more nervous and hesitant. A tour guide from Chongjin joined us, and if you were looking for someone who might be in one of the Chongjin gangs described in Barbara Demick’s book, Nothing to Envy, he’d be it.

It was clear the North Koreans didn’t like us being in Chongjin and wanted us out quickly.  Our itinerary had scheduled a guided bus tour of the city. Also, because we were in this seaside city and had yet to see any water, many in the group wanted to see the port of Chongjin. However, after a visit to a preschool, the North Koreans drove us directly out of Chongjin. We were fortunate to realize this before we were too far out of the city, and somehow, we convinced the guides to take us back to the city and to the port. We drove straight back up the main street, past our hotel, directly to the port.  The bus then hastily turned around in a hotel with a People’s Republic of China flag raised atop its flagpole, and we were immediately back on the route out of Chongjin.  The tour guides explained that Chinese sailors visiting Chongjin port stay at that hotel.

But it was hard to tell if these cracks were large enough for change to break through from the inside or where policy prescriptions from the outside could infiltrate and induce reform. As North Korea watchers know, the country has been incredibly resilient and predictions of its imminent demise usually end in error.

North Korea is trying to prevent the predicted collapse scenarios by cultivating a smooth transition from the Kim Jong-il regime. Kim Jong-il appears to have positioned his third son, Kim Jong-un to be his successor. Since being promoted to a four-star general and appointed as a Vice Chairman of the Central Military Committee in North Korea last year, North Korean watchers have been following Kim Jong-un to see if he will be able to handle this transition. Recent travelers to North Korea, including my colleagueAbraham Kim, have noticed a set of three propaganda banners that suggest the transition to Kim Jong-un. The signs, “Suryeongbok” and “Janggunbok,” are “typical congratulations” for having the good fortune or happiness to be led by Kim Il-sung and Kim Jong-il, while the third phrase, “Daejangbok,” signifies “people enjoy the happiness (bok) of having general (daejang) Kim Jong-un.” Most of these signs have been spotted in and around Pyongyang by visitors; however, the banners were displayed on the outside of a building near the main square in Chongjin.

Lastly, the costs of unification will be significant.  Again, it is not an Earth-shattering revelation, but a factor that becomes even clearer when driving on unpaved roads that connect major cities and areas of the country. The new construction of buildings, while probably being done in preparation for the start of North Korea’s effort to become a strong and prosperous nation, might not be up to the current safety and construction standards of those in South Korea.  Numerous other signs like wood-burning trucks, unheated food at some buffet meals, and unlit areas of functioning museums and buildings all suggest unification will be a costly process.

While these aren’t relatively new insights into North Korea, these are issues that the Korean policy community needs to understand and constantly follow. The connections with China, the cracks in the system, succession issues, and the costs of unification are all factors that impact policies toward North Korea. As a Korea analyst, I was fortunate to see these firsthand, and I would definitely want to go back to North Korea to see what else I can see.

Nicholas Hamisevicz is the Director of Research and Academic Affairs for the Korea Economic Institute. His views are his own.

Photo courtesy of NK News – a North Korean news source.

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KEI’s NK Couple Picture Gets Top Billing

The September 15 KEI-Woodrow Wilson Center program on my trip to North Korea with Charles Armstrong (Columbia University) and James Person (Wilson Center) received much Korean media attention.  The program showed over a hundred photos from the group’s 4000-5000 pictures taken of daily life in Pyongyang and other citiesin North Korea. Below are links to some of the coverage. According to one of the sites, the stylish North Korean couple holding hands photo which was circulated by Yonhap News made it to the top ten news item for the day.  Reading some of the netizens’ comments, some believe the picture was staged.  I assure you it was not!












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Discovering North Korea

On June 8 – 18, KEI Vice President, Abraham Kim, visited North Korea with a group of American Asia experts.  The purpose of the trip was to analyze the efficacy of sanctions, conditions in the cities/countryside, the integration of technology, the prevalance of cell phones and political conditions.  The slide presentation were shown at the GRS Annual Conference in July 2011 and a forum at Wilson Center in September 2011.

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The Peninsula blog is a project of the Korea Economic Institute. It is designed to provide a wide ranging forum for discussion of the foreign policy, economic, and social issues that impact the Korean peninsula. The views expressed on The Peninsula are those of the authors alone, and should not be taken to represent the views of either the editors or the Korea Economic Institute. For questions, comments, or to submit a post to The Peninsula, please contact us at ts@keia.org.