Tourism Leisure 2015

TOURISM & LEISURE

INVESTMENTOPPORTUNITIESIN KOREA

2 TOURISM & LEISURE

TOURISM & LEISURE

INVESTMENTOPPORTUNITIESIN KOREA

KOREA, Where Success Knows No Limits

Contents

04 Industry overview Global tourism market overview Korean tourism market overview 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

0504 TOURISM & LEISURE

v

INDUSTRY OVERVIEW

The World Travel & Tourism Council (WTTC) reported that travel and tourism industries made a direct contribution of USD 2.2 trillion, up 3.1% YoY, to the global GDP and directly supported 101 million jobs in 2013.

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.)

YearTourist arrivals Tourism receipts

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.

Global tourism market overview

01 INDUSTRY OVERVIEW


The number of inbound international tourists reached 12.18 million in 2013, up 9.3% YoY. The Japanese inbound tourism market contracted as much as 21.9% YoY in 2013, continuing on a downward trend since September of 2012 due to the weak yen and prolonged diplomatic conflicts between Korea and Japan.

In contrast, the Chinese inbound market surged by 52.5% YoY in 2013 on the back of increased shopping, individual tours, cruises and incentive tour groups, making a positive contribution to an increase in the total number of international tourists visiting Korea. China emerged as the largest inbound market in 2013, overtaking Japan.

Number of inbound international tourists by year (Unit: No. of people, %)

Year Number of inbound international tourists Growth rate

2005 6,022,752 3.5

2006 6,155,046 2.2

2007 6,448,240 4.8

2008 6,890,841 6.9

2009 7,817,533 13.4

2010 8,797,658 12.5

2011 9,794,796 11.3

2012 11,140,028 13.7

2013 12,175,550 9.3

* Source: Tourism Knowledge & Information System (www.tour.go.kr)

By purpose of visit to Korea, travel for leisure, recreation and holidays accounted for the largest share of inbound international tourists (48.2%) in 2013, followed by traveling for business and professional purposes (23.4%), shopping (10.6%) and visiting friends and relatives (9.7%).

Inbound tourism by purpose of visit (Unit: %)

Purpose of visit 2011 2012 2013

Leisure, recreation, holidays 42.4 43.9 48.2

Business and professional 31.1 24.5 23.4

Shopping 9.2 11.8 10.6

Visiting friends and relatives 10.6 11.1 9.7

Education 4.6 6.5 5.9

Religious reasons and pilgrimage 0.9 1.1 1.0

Beauty, health, medical treatment 0.3 1.1 1.0

Other 0.5 0.1 0.1

* Source: 2013 Survey of Inbound International Tourists (Ministry of Culture, Sports and Tourism, February, 2014)

When asked about the reason for selecting Korea as a destination, 61% of inbound international tourists said shopping, followed by gourmet and culinary tourism (41.3%) and natural attractions (39.0%) in 2013.

Key reasons when choosing Korea as a destination (Unit: %)

Reason 2011 2012 2013

Shopping 66.6 66.0 61.0

Culinary and gourmet 44.2 44.3 41.3

Natural scenery 23.9 32.1 39.0

Resort and rest 16.5 17.6 18.0

Historic, cultural sites 19.1 21.5 17.7

Culture (e.g. fashion, trends) 14.5 11.1 14.8

Distance 19.0 16.9 11.7

Affordability 14.9 11.5 10.3

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%).

Korean tourism market overview



Tourist destinations in Korea (Unit: %)

Tourist destinations 2011 2012 2013

Myeong-dong 55.3 61.5 58.9

Dongdaemun Market 45.8 49.0 45.8

Palaces 31.8 32.3 31.6

Namdaemun Market 33.7 31.8 26.5

Namsan / N Seoul Tower 29.1 28.9 25.5

Lotte World 20.6 23.3 24.3

Insa-dong 26.1 26.2 23.8

Museums memorials 21.8 22.4 20.4

Sinchon / Hongdae 14.8 16.5 19.6

Itaewon 16.1 17.7 17.5

* 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

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 Province (9.2%).

Areas visited by inbound international tourists (Unit: %)

Areas visited 2011 2012 2013

Seoul 79.7 82.5 80.9

Gyeonggi Province 23.8 21.3 17.9

Incheon 9.0 7.7 7.8

Jeju Island 10.2 12.0 16.7

Gyeongsang Province 19.3 16.1 15.6

Gangwon Province 11.1 9.7 9.2

Chungcheong Province 5.1 4.1 4.0

Jeolla Province 3.9 4.1 3.8

Other 0.7 0.3 0.6

* Source: 2013 Survey of Inbound International Tourists (Ministry of Culture, Sports and Tourism, February, 2014)* Note: Multiple answers allowed.

The number of outbound Korean tourists increased by 8.1% YoY to 14,846,485 in 2013 thanks to the strong won and expectations for global economic recovery. Monthly outbound Korean tourists exceeded 1 million, posting a monthly increase. In particular, more than 1.4 million Koreans traveled overseas in January, July and August, which are vacation and holiday seasons.

Outbound Korean travelers by year (Unit: No. of people, %)

Year Number of outbound travelers Growth rate

2005 10,080,143 14.2

2006 11,609,879 15.2

2007 13,324,977 14.8

2008 11,996,094 -10.0

2009 9,494,111 -20.9

2010 12,488,364 31.5

2011 12,693,733 1.6

2012 13,736,976 8.2

2013 14,846,485 8.1


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.

Annual tourism balance of payment by person

Year Tourism receipt (USD mn)

Tourism expenditure (USD mn)

Tourism balance of payment

(USD mn)

Average tourism receipt per person

(USD)

Average tourism expenditure per

person (USD)

2005 5,793 12,025 -6,232 962 1,193

2006 5,760 14,295 -8,535 936 1,231

2007 6,071 16,932 -10,860 942 1,271

2008 9,696 14,572 -4,876 1,407 1,215

2009 9,767 11,036 -1,269 1,249 1,162

2010 10,291 14,278 -3,987 1,170 1,143

2011 12,347 15,531 -3,184 1,261 1,224

2012 13,357 16,495 -3,138 1,199 1,201

2013 14,525 17,341 -3,611 1,193 1,168


The number of Koreans traveling within Korea increased 2.4% YoY to 37.8 million in 2013 thanks to a 4.8% YoY increase in day trips and a 2.6% YoY increase in overnight travel. The total number of days Koreans spent on domestic trips is based on a sum of overnight travels and day trips from January 1 to December 31. In 2013, the total number of domestic trip days increased by 6.6% YoY to 389,220,312 days.



Domestic trips taken by Koreans (Unit: No. of people, No. of people/days)

YearNo. of Korean domestic tourists No. of domestic trip days

Day trip Overnight trip Day trip Overnight trip

2005 36,888,642 30,003,805 31,225,594 388,836,797 148,649,882 240,186,915

2006 37,666,721 31,975,212 31,817,115 416,982,061 168,373,799 248,608,262

2007 36,443,445 30,472,456 31,226,028 477,372,260 183,033,025 294,339,235

2008 37,391,314 30,461,915 31,350,952 408,026,189 141,017,187 267,009,002

2009 31,201,294 22,739,816 26,408,910 375,340,664 106,693,142 268,647,522

2010 30,916,690 20,012,003 26,047,929 339,607,551 75,974,080 263,633,471

2011 35,013,090 27,651,266 26,233,868 286,947,961 84,971,961 201,976,000

2012 36,914,067 28,649,336 30,277,238 365,282,249 121,179,761 244,102,488

2013 37,800,004 30,011,682 31,058,136 389,220,312 131,368,005 257,852,307

* Source: 2013 Survey of Korean Tourists

In 2013, foreign direct investment in tourism-related industries broke down to USD 916 million in accommodations (23 cases), USD 21 million in food and beverage (104 cases) and USD 24 million in recreational sports (16 cases).

Foreign investment trends

Industry 2010 2011 2012 2013

No. of cases

Amount(USD 1,000)

No. of cases

Amount(USD 1,000)

No. of cases

Amount(USD 1,000)

No. of cases

Amount(USD 1,000)

Accommodations 6 34,484 9 93,571 21 822,965 23 916,421

Food and beverage 299 23,530 181 33,025 223 85,155 104 20,714

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

* Source: Ministry of Trade, Industry & Energy (www.motie.go.kr)

The total number of tourist hotels stood at 740, with 79,441 rooms in Korea, in 2013. By region, the number of rooms was highest in Seoul, followed by Gyeonggi Province, Jeju Island and Busan.

Overview of tourist hotels

Deluxe 1st- class hotel

Deluxe 2nd- class hotel 1st class hotel 2nd class hotel 3rd class hotel Unclassified hotel Total

No. of hotels

No. of Rooms

No. of hotels

No. of Rooms

No. of hotels

No. of Rooms

No. of hotels

No. of Rooms

No. of hotels

No. of Rooms

No. of hotels

No. of Rooms

No. of hotels

No. of Rooms

Seoul 22 10,742 31 6,890 43 5,001 23 1,423 15 739 48 3,808 182 28,603

Busan 7 2,626 4 659 15 1,371 11 487 11 1,519 2 108 50 6,770

Daegu 4 999 5 342 8 406 1 65 1 33 0 0 19 1,845

Incheon 3 1,020 6 1,402 1 94 12 553 12 552 16 736 50 4,357

Gwangju 2 325 2 198 6 344 4 210 0 0 4 157 18 1,234

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 Province 4 1,072 6 1,047 23 1,909 18 933 22 1,226 26 1,376 99 7,563

Gangwon Province 7 1,871 6 1,066 14 896 4 199 2 114 7 630 40 4,776

North Chungcheong Province

1 328 1 180 14 1,017 1 30 4 137 2 77 23 1,769

South Chungcheong Province

0 0 4 568 2 105 8 366 1 50 2 104 17 1,193

North Jeolla Province 1 118 3 459 6 413 9 435 5 189 2 97 26 1,711

South Jeolla Province 3 650 3 256 13 833 3 149 2 122 9 395 33 2,405

North Gyeongsang Province

5 1,627 4 691 14 805 9 484 8 400 8 315 48 4,322

South Gyeongsang Province

2 487 4 478 14 1,100 7 360 3 116 13 559 43 3,100

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)

Foreign direct investment in tourism-related industries

Korea’s promising tourism industries: Overview



The average occupancy rate of tourist hotels stood at 63.2% in 2013, led by Jeju Island (77.1%), Seoul (74.5%), Incheon (73.7%), Gyeonggi Province (63.5%) and Busan (62.6%).

Occupancy rate of tourist hotels in Korea (Unit: No. of rooms, %)

Region2012 2013

No. of rooms available

No. of rooms occupied

Occupancy rate (%)

No. of rooms available

No. of rooms occupied

Occupancy rate (%)

Seoul 7,809,313 6,177,846 79.1 7,693,038 5,728,149 74.5

Busan 2,171,302 1,399,615 64.5 2,204,212 1,380,492 62.6

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

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

Ulsan 274,866 162,890 59.3 273,385 164,322 60.1

Gyeonggi Province 1,810,532 1,163,246 64.2 1,843,930 1,170,313 63.5

Gangwon Province 1,493,050 654,796 43.9 1,396,501 632,888 45.3

North Chungcheong Province 504,524 183,247 36.3 561,810 204,893 36.5

South Chungcheong Province 324,353 147,763 45.6 341,836 183,909 53.8

North Jeolla Province 476,233 176,989 37.2 571,900 209,889 36.7

South Jeolla Province 420,717 183,749 43.7 549,393 249,529 45.4

North Gyeongsang Province 1,433,307 662,456 46.2 1,387,202 611,263 44.1

South Gyeongsang Province 959,221 462,150 48.2 1,009,773 456,148 45.2

Jeju Island 2,182,330 1,707,343 78.2 2,259,721 1,741,927 77.1

Total 22,656,626 14,907,633 65.8 22,767,519 14,387,155 63.2


According to an analysis of hotel demand and supply in Seoul and Jeju Island, which are expected to face a growing shortage of hotel rooms, the daily demand for hotel rooms is estimated at 41,301 in Seoul in 2017, outpacing the daily supply of 33,864 rooms and leading to a shortage of 7,437 rooms.

Meanwhile, the demand and supply analysis shows that the daily demand for hotel rooms on Jeju Island should amount to 16,106 in 2017, outpacing the daily supply of 12,904 rooms and leading to a shortage of 3,203 rooms.

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)

Analysis of hotel room demand and supply in Jeju Island (Unit: No. of rooms)

Demand & Supply 2014 2015 2016 2017

Demand (a) 13,195 14,094 15,063 16,106

Supply (b) 10,115 12,208 12,496 12,904

Supply-Demand (b-a) △3,079 △1,886 △2,567 △3,203

* Source: Demand and Supply Analysis of Tourist Hotels (Korea Culture & Tourism Institute, 2014)

In 2013, a total of 57 businesses operated in the special recreation services segment and 23 businesses in the resort complex segment.

Number of tourist facilities (Unit: No. of businesses)

City / RegionSpecial

recreation services

Resort complexes

Auto camping park facilities Cruise tour

Performing arts center for

tourists

Souvenir shops exclusively for

foreign tourists

Seoul - 1 - 1 3 99

Busan 1 1 - 4 1 23

Daegu - 1 - - 1 1

Incheon 1 - 3 5 - 13

Gwangju - - - - - -

Daejeon - - - - - -

Ulsan - - - - - -

Sejong - - - - - -

Gyeonggi Province 8 3 10 - - 24

Gangwon Province 2 8 7 2 - -

North Chungcheong Province 3 1 1 - - -

South Chungcheong Province 5 2 6 3 - -

North Jeolla Province 1 1 4 6 1 -

South Jeolla Province 1 2 7 5 - -

North Gyeongsang Province 4 - 5 - - 5

South Gyeongsang Province - 3 4 5 - -

Jeju Island 31 - 3 7 2 40

Total 57 23 50 38 8 205




Attendees of international conferences go shopping and take tours during their stay, making economic contributions to the transportation, airline, lodging and entertainment industries.

According to the Union of International Associations (UIA), a total of 635 international conferences were held in Korea in 2013, making it the world’s third-largest host country. The number of international conference facilities and conference rooms stood at 820 and 4,450, respectively, in Korea in 2013.

Number of international conference facilities

Type of facility No. of facilities No. of conference rooms

Specialized conference facilities 12 254

Semi-conference facilities 143 1,194

Small to mid conference facilities 257 810

Hotel (deluxe 1st - class hotel) 76 574

Hotel (deluxe 2nd - class hotel) 82 397

Hotel (1st class) 109 325

Resort condominium 141 896

Total 820 4,450


A total of 17 casino businesses operated in Korea in 2013. Of these casino businesses, only 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


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.

Number of camping parks in 2013

CityTotal

Public facilities Private facilitiesNo. of camping parks % of total

Seoul 32 1.6 4 28

Busan 10 0.5 0 10

Daegu 7 0.4 4 3

Incheon 54 2.8 9 45

Gwangju 2 0.1 1 1

Daejeon 5 0.3 2 3

Ulsan 19 1.0 3 16

Sejong City 4 0.2 3 1

Gyeonggi Province 652 33.2 46 606

Gangwon Province 402 20.5 72 330

North Chungcheong Province 127 6.5 35 92

South Chungcheong Province 135 6.9 31 104

North Jeolla Province 74 3.8 27 47

South Jeolla Province 90 4.6 34 56

North Gyeongsang Province 171 8.7 52 119

South Gyeongsang Province 132 6.7 43 89

Jeju Island 47 2.4 13 34

Total 1,963 100.0 379 1,584

* Source: Establishment of Legal Framework on Camping Park Business (Korea Culture & Tourism Institute, 2013)



The Korean government has drawn seven tourism zones across the country, enabling regional authorities to devise their own tourism development plans.

Each regional authority has established and pursued strategies to achieve their own vision and goals for tourism development.

Tourism zones

Zone Regional authorities

Seoul Capital Area Seoul Metropolitan Government, Incheon Metropolitan City, Gyeonggi Province

Chungcheong Province Zone Daejeon Metropolitan City, North Chungcheong Province, South Chungcheong Province

Jeolla Province Zone Gwangju Metropolitan City, North Jeolla Province, South Jeolla Province

Daegu and North Gyeongsang Province Zone Daegu Metropolitan City, North Gyeongsang Province

Busan, Ulsan and South Gyeongsang Province Zone Busan Metropolitan City, Ulsan Metropolitan City, South 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

REGIONAL TOURISM DEVELOPMENT STRATEGIES

Tourism development planning

02 REGIONAL TOURISM DEVELOPMENT STRATEGIES

Seoul Capital Area

Chungcheong Province

Jeolla Province

Jeju Island

Gangwon Province

Daegu and North Gyeongsang

Province

Busan, Ulsan and South Gyeongsang

Province


Seoul Metropolitan Government

•�Vision: To be the most attractive city for international tourists•�Goal: To join the top 15 cities in terms of global tourism competitiveness •�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


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


Daejeon Metropolitan City

•�Vision: To become a green science and tourism city that leads health-conscious and creative tourism •�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


Tourism development plan by region: Seoul

Chungcheong Province Zone



Gwangju Metropolitan City

•�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


North Jeolla Province

•�Vision: To be Korea’s tourism capital in the 21st century, the era of Northeast Asia •�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


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


Daegu Metropolitan City

•�Vision: To be a center of knowledge-based tourism and one of Korea’s three major cultural zones •�Goal: Regional attractions, greater quality of life, greater sense of cultural pride, creation of

added value •�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


Jeolla Province Zone

Daegu and North Gyeongsang Province Zone



Busan Metropolitan City

•�Vision: To be a global marine entertainment & tourism city •�Goal: To promote Busan as a center of various river and maritime activities; a creative tourism

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


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


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


Gangwon Province

•�Vision: To be a global center for health and life sciences and a tourism and leisure center of 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


Jeju Island Special Self-Governing Province

•�To promote Jeju Island as UNESCO Natural and Cultural Heritage sites and leverage them as a 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

Busan, Ulsan and South Gyeongsang Province Zone

Gangwon Province Zone

Jeju Island Zone



The number of inbound international tourists increased by 9.3% YoY to a record-high of 12.18 million in 2013, after breaking the 10 million mark in 2012. Korea climbed seven positions from 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 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 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 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

GOVERNMENT POLICIES AND

RELATED LAWS

Government policies

03 GOVERNMENT POLICIES AND RELATED LAWS


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. First of all, the government, targeting Chinese tourists, expanded the eligibility of the multiple entry visa to include the spouses and underage children of Chinese nationals who already hold a 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 and the small hotel segment as sub-categories of the hotel business in order to increase diversity in the tourism accommodation service segment and foster the high value-added convergence tourism industry amid a steady increase in inbound international tourists. The Amendment to the 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.

The tourism industry is regulated by, among others, the Framework Act on Tourism, Tourism Promotion Act, Tourism Promotion and Development Fund Act, International Conference Industry Promotion Act, Special Act on Expansion of Tourism Lodging Facilities and Korea Tourism Organization Act. In particular, the aforementioned six acts provide legal grounds for the development and promotion of 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.

Improvement of the visa system

Sub-categorization of the hotel business

Laws and regulations applicable to investments in the tourism industry



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 172To 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 30A 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- 3Foreign 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.

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.



TOURISM BUSINESSES:

SERVICE USERS AND TOURISM

REVENUE

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

The number of tourism business enterprises declined by 2.6% YoY in 2013.

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

Casino 16 17 16 -5.9

Recreational facilities 368 389 358 -8.0

Tourist convenience facilities 3,415 4,171 4,378 5.0

Total 16,144 18,926 18,441 -2.6


Total tourism revenue

Number of tourism business enterprises

04 TOURISM BUSINESSES: SERVICE USERS AND TOURISM REVENUE


Average sales per tourism business enterprise amounted to KRW 1.26 billion in 2013. By segment, the casino segment posted the highest average sales of KRW 164.4 billion per company. Average sales revenue per tourism business enterprise

(Unit: KRW mil.)

Segment 2011 2012 2013

Travel 410 475 495

Tourist accommodations 6,675 6,577 6,597

Tourist facility business 5,714 5,388 5,628

International conference 5,093 4,737 4,741

Casino 144,479 144,727 164,440

Recreational facilities 2,836 3,038 3,699

Tourist convenience facilities 746 659 428

Total 1,251 1,245 1,263


Total number of users for Korean travel service companiesTotal number of travel service users by year

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


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


Total number of visitors to casino by year

Type No. of users

Casino 5,727,542


Number of recreational facility service users by year

Type No. of users

Recreational complex facilities 46,467,699

General recreational facilities 36,216,200

Other recreational facility business 8,149,650

Total 90,833,549


Number of international conference facility service users by year

Type No. of users

International conference facility business 24,609,507


Average sales revenue per tourism business enterprise

Tourism service users by segment



Number of tourist convenience facility service users The total number of tourist convenience facility service users amounted to 143.21 million in 2013.

Number of tourist convenience facility service users by segment

Tourist convenience facility service provider No. of users

Tourist entertainment restaurant 4,433,904

Performing arts centers for tourists 7,964,336

Entertainment and restaurant business exclusively for foreigners 1,336,263

Tourism restaurants 118,557,370

City circle tour 894,266

Tourist photography 31,525

Passenger vehicle terminal facility 2,970,435

Tourist pension 1,410,644

Rope way ride tour 4,967,150

Hanok (Korean traditional house) experience 557,165

Guest house business for foreign tourists 87,402

Total 143,210,460


Number of tourist facility business users The total number of tourist facility business users stood at 69.56 million in 2013.

Number of tourist facility business users

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


The Korean tourism industry can be divided into Korean tourists and inbound foreign tourists.

Korean nationals traveling within Korea spent a total of KRW16.86 trillion in 2010, which breaks down to food and beverage (37.70%), tour and transportation (25.75%) and accommodations (11.50%).

Inbound foreign tourists spent a total of KRW 11.93 trillion in 2010, which breaks down to retail (34.50%), accommodations (30.5%) and food and beverage (18%).

Tourism expenditure by Korean and foreign tourists by segment

SegmentKorean tourist expenditure Foreign tourist expenditure

Share (%) Amount (KRW) Share (%) Amount (KRW)

Retail (Tourist shopping) 6.87 1,158,267 34.50 4,117,307

Food and beverage 37.70 6,356,135 18.00 2,148,160

Accommodations 11.50 1,938,874 30.50 3,639,938

Tourist transport 25.75 4,341,392 5.00 596,711

Transport assistance 1.87 315,278 0.00 0

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

Sports & sporting events 1.75 295,046 1.00 119,342

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

* Source: Economic Effect Analysis of Tourism Industry (Korea Culture & Tourism Institute, 2011)

Expenditure of the Korean tourism industry



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

Project outlineLocation: 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 2013Project 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.

ProgressFinal 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)

Investment progress: 19 out of 34 facilities (75% of the total area)•�Theme park, outlet mall, Aqua World, national science center, golf range, landmark hotel, food

town, etc.

TOURISM INVESTMENT CASES

East-Busan Tourism Complex

05 TOURISM INVESTMENT CASES


Investment methodAcquisition of individual plots or entire sites to build and operate tourism facilities

Project characteristics and advantages Greater flexibility in the development and investment methods: The development of individual facilities, openness to creative planning, favorable payment conditions for site acquisition (long-term installment payment, lease, etc.), real estate investment immigration

Growth of the Gimhae Airport and Busan KTX enhances connectivity to downtown Busan, its neighboring cities, such as Ulsan and Gyeongju, and the Seoul Capital Area. In addition, Busan has strong potential as a tourist attraction thanks to its easy access to densely populated destinations such as Taiwan, Hong Kong and Beijing, which are located within 2,000 km.

The East Busan Tourism Complex is expected to attract tourists and create new tourist demand, generating synergy with tourist attractions such as the Busan Film Festival, Haeundae Beach, Songjeong Beach, Haedong Yonggungsa Temple, filming locations and ceramic towns and tourist events such as the Gijang Anchovy Festival, Conger Festival, Fishing Blessing Ceremony and Fishing Town Festival.

East-Busan Tourism Complex (Long-term Planning) Bird's Eye View

Project conceptTo promote the Jipo-Unyeo Tourism Complex as a center of marine leisure activities and a multi-purpose marine and golf resort that offers easy access to the Seoul Capital Area and various tourism activities

Project outline(Unyeo District)Location: Nudong-ri and Janggok-ri, Gonam-myeon, Jungjang-ri, Anmyeon-eup, Taean-gun, South Chungcheong ProvinceConcept: Family-oriented comprehensive marine tourism complexArea: 538,599 m2

Project period: 2007 - 2016Project scale: KRW 73.7 billion Project owner: South Chungcheong Development Co. (www.cndc.kr)Key facilities•�Recreation and culture facilities: Water park, aquarium, artificial beach, amusement park•�Accommodations: Condominium, pension park, beach house•�Commercial facilities: Themed shopping malls on the beach, water garden shopping centers

(Jipo District)Location: Nudong-ri and Janggok-ri, Gonam-myeon, Jungjang-ri, Anmyeon-eup, Taean-gun, South Chungcheong ProvinceConcept: Golf resort tourism complexSize: 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 methodSite acquisition for project execution

Jipo-Unyeo Tourism Complex in Anmyeon Island



ProgressFinal approval stage: Tourism Complex Establishment Plan to be approved in June of 2014 Site procurement: 97.9% completedInvestment progress •�Public investment: Pending approval •�Private investment: Investment stage

Project characteristics and advantages97.9% 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.

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.


Aerial view of the Jipo District of Anmyeon Island (tourism zone)

Aerial view of the Unyeo District of Anmyeon Island


Project conceptTo create a world-class eco-friendly resort and leisure city, maximizing the Southwest Coast’s superb natural and cultural heritage and offering tourism, leisure, residential, education and medical services and industrial opportunities

Project outline(Guseong District)Location: Guseong-ri, Sanggong-ri, Deoksong-ri, Sani-myeon, Haenam-gun, South Jeolla ProvinceProject area: 20,960,000 m2

Project period: 2006 - 2025Total project cost: KRW 4.68 trillion Project owner: Southwest Coast Enterprise City Development Co. Website: solaseado.go.krKey facilities•�Public: School, cultural facilities, park facilities, medical centers, etc.•�Private: Theme park, marine sports center, golf range, etc.

(Sampo District)Location: Sampo-ri, Samho-eup, Yeongam-gun, South Jeolla ProvinceProject area: 4,289,000 m2

Project period: 2006 - 2021Total project cost: KRW 1.9 trillion Project owner: KAVO and South Jeolla Development Co.Website: solaseado.go.krKey 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 - 2025Total project cost: KRW 1.6 trillion Project owner: Southwest Coast Leisure CorporationWebsite: solaseado.go.krKey facilities•�Public: Cultural facilities, public buildings and park, etc.•�Private: Sports complex, resort complex, marina facilities, etc.

Investment methodPre-sale prior to the completion of construction, capital investments (construction investors, financial investors, strategic investors)

ProgressGuseong District: Final stages for approval (execution plans approved, December 2012)

Sampo District: Stage 1 (F1 race track) construction completed (September 2011), Stage 2 construction execution plans outsourced

Samho District: Final stages for approval

Project characteristics and advantagesEasy to purchase land at a competitive price

Full support from local authorities and immigrant investor program

Ideal location with growth potential as a global leisure cluster thanks to its excellent natural resources

Positive impact on asset values thanks to the establishment of world-class tourism and leisure cities and ideal residential environment

Sampo District Samho District Guseong District

Southwest Coast Tourism & Leisure City



The Ministry of Culture, Sports and Tourism actively promotes the tourism industry as one of the national strategic industries in order to enhance Korea’s competitiveness in the global tourism market and makes various policy efforts to deliver world-class tourism services and enable sustainable high-quality tourism.

The Korea Tourism Organization executes government tourism policies and develops and provides various high value-added tourism products, such as medical tourism, cruise tourism and K-pop culture tourism. The Korea Tourism Organization is pioneering the global tourism market backed by its network of 31 overseas offices, which serve as an outpost for global 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 sector by conducting various research projects commissioned by the central and regional governments, tourism-related international organizations and other agencies. In addition, the Korea Culture & Tourism Institute operates the Knowledge & Information System (www.tour.go.kr) to compile and provide information on the tourism industry.

Korea Tourism Association (www.koreatravel.or.kr)The Korea Tourism Association represents the Korean tourism industry to promote sound industry development and collect and coordinate the opinions of industry representatives. 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 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 (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.

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

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

06 RELATED ORGANIZATIONS AND ASSOCIATIONS


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.

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.

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)

06 RELATED ORGANIZATIONS AND ASSOCIATIONS

Reference


Supporting foreign investors worldwide

Headquarters

Address 13, Heolleung-no, Seocho-gu, Seoul, Republic of Korea

Tel (82-2) 1600-7119 Fax (82-2) 3460-7920

E-mail [email protected]

Homepage www.investkorea.org

NORTH AMERICA

New York, USATel (212) 826-0900E-mail [email protected]

Los Angeles, USATel (323) 954-9500E-mail [email protected]

Chicago, USATel (312) 644-4323E-mail [email protected]

Dallas, USATel (972) 243-9300E-mail [email protected]

Washington D.C., USATel (202) 857-7919E-mail [email protected]

Silicon Valley, USATel (408) 432-5000E-mail [email protected]

Detroit, USATel (248) 619-1601E-mail [email protected]

Vancouver, CanadaTel (604) 683-1820E-mail [email protected]

Toronto, CanadaTel (416) 368-3399E-mail [email protected]

EUROPE

Frankfurt, GermanyTel (49-69) 2429-920/9E-mail [email protected]

Hamburg, GermanyTel (49-40) 3405-740E-mail [email protected]

Munich, GermanyTel (49-89) 2424-2630E-mail [email protected]

Paris, FranceTel (33-1) 5535-8888E-mail [email protected]

Moscow, RussiaTel (7-495) 258-1627-8E-mail [email protected]

London, U.K.Tel (44-20) 7520-5300E-mail [email protected]

Brussels, BelgiumTel (32-2) 205-0088E-mail [email protected]

Milan, ItalyTel (39-02) 79-5813E-mail [email protected]

Zurich, SwitzerlandTel (41-44) 202-1232E-mail [email protected]

Stockholm, SwedenTel (46-8) 30-8090E-mail [email protected]

Copenhagen, DenmarkTel (45) 3347-7221E-mail [email protected]

Amsterdam, NetherlandsTel (31-20) 754-6900E-mail [email protected]

Vienna, AustriaTel (43-1) 586-3876E-mail [email protected]

Madrid, SpainTel (34-91) 556-6241E-mail [email protected]

ASIA & OCEANIA

SingaporeTel (65) 6426-7200E-mail [email protected]

Sydney, AustraliaTel (61-2) 9264-5199E-mail [email protected]

Melbourne, AustraliaTel (61-3) 9860-0500E-mail [email protected]

Tokyo, JapanTel (81-3) 3214-6951E-mail [email protected]

Osaka, JapanTel (81-6) 6262-3831E-mail [email protected]

Nagoya, JapanTel (81-52) 561-3936E-mail [email protected]

Fukuoka, JapanTel (81-92) 473-2005E-mail [email protected]

Beijing, ChinaTel (86-10) 6410-6162E-mail [email protected]

Shanghai, ChinaTel (86-21) 5108-8771/2E-mail [email protected]

Guangzhou, ChinaTel (86-20) 2208-1600E-mail [email protected]

Qingdao, ChinaTel (86-532) 8388-7931/4E-mail [email protected]

Hangzhou, ChinaTel (86-571) 8110-3099E-mail [email protected]

Nanjing, ChinaTel (86-025) 8328-8991E-mail [email protected]

Hong Kong, ChinaTel (852) 2545-9500E-mail [email protected]

Taipei, TaiwanTel (886-2) 2725-2324E-mail [email protected]

Kuala Lumpur, MalaysiaTel (60-3) 2117-7100E-mail [email protected]

Jakarta, IndonesiaTel (62-21) 574-1522E-mail [email protected]

Mumbai, IndiaTel (91-22) 4925-5400E-mail [email protected]

MIDDLE EAST

Dubai, United Arab EmiratesTel (971-4) 450-4360E-mail [email protected]

Invest Korea'sGlobal Network

You want to do business in Korea but don’t know where to start. Where should you turn? Invest Korea.

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investment and post-investment support, with offices located around the world.

Contact the Invest Korea office nearest you.

www.Invest Korea.org

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www.investkorea.org13, Heolleung-no, Seocho-gu, Seoul, Republic of Korea (137-749) Tel (82-2)1600-7119 Fax (82-2)3460-7920

Documents

Tourism Leisure 2015