Wednesday, April 20, 2016

Korea as global tourism destination

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International tourism has rapidly expanded over the past 60 years to become one of the fastest growing sectors of the world economy. The year 2015 was yet another record-breaking year for global tourism.

The U.N. World Tourism Organization (UNWTO) reported that international tourist arrivals grew by 4.4 percent in 2015 to reach a whopping 1,184 million. The total impact of the tourism sector on the world economy in 2014 was approximately $7,580 billion, or 9.8 percent of world GDP. As the economic outlook for the near future remains bleak, the robust performance of the tourism sector provides the global economy with much-needed vitality and thus greatly contributes to worldwide economic growth and job creation.

Reflecting the worldwide trend, Korea's tourism industry has experienced a boom of its own in recent years. Between 2009 and 2014, the number of foreign visitors nearly doubled from 7.8 million to 14.2 million. The impact of the thriving tourism industry on the Korean economy is palpable. In 2015, the travel and tourism sector made up 5.1percent of national GDP and directly generated 561,000 jobs, or 2.2 percent of total employment.

In spite of the rapid rise of inbound tourists, Korea still lags far behind other Asia-Pacific countries. Compared to Korea's 14.2 million visitors (2014), Hong Kong drew 27.8 million arrivals while Thailand and Singapore registered 24.8 million and 15 million visitors each. As a whole, the Asia-Pacific region recorded a year-on-year increase of 13 million international tourists in 2015, reaching a total of 277 million visitors.

Worryingly, international visitors to Korea declined for the first time in 12 years in 2015. This slump was mostly due to the outbreak of the Middle East Respiratory Syndrome (MERS) _ the massive cancellations of flights and hotels in June and July of last year were a hard hit for tourism-related revenues. Although the sector has bounced back relatively fast, it is clear that the domestic tourism industry is vulnerable to external conditions such as the deteriorating global economic situation, the slowing of the Chinese economy, the spread of epidemics, and the increasingly fierce competition with other travel destinations in the region.

The growth potential for Korea's tourism sector is still very high, and there are many initiatives that could help put Korea more firmly on the map of international destinations. Creating a more diverse range of tourism programs, boosting Korea's advantage as a business and leisure travel destination, and promoting niche sectors such as medical tourism are some of the steps that might enhance Korea's competitiveness.

For one, the Korean tourism sector should make an effort to develop differentiated tourism products that attract repeat-visitors with diverse needs and expectations. A standard sightseeing program focusing on shopping and gastronomy in cosmopolitan Seoul? This will definitely be attractive for, say, a group of young female tourists in their 20s and 30s. But what about other types of travelers, such as senior citizens who prioritize rest, intrepid adventure travelers seeking new challenges, or families with children who would prefer a farm holiday close to nature? A well-focused effort on developing a wide range of tourism programs will strengthen the base of Korea's tourism industry. Additionally, it may help to attract more tourists in the low winter season, and encourage more visits to the heretofore rather than neglected provinces and small towns.

Another field of strategic growth potential is the meeting, incentives, conventions and exhibitions/events industry. Since the late 2000s, the Korean government has actively pursued a policy of promoting this industry by hosting a variety of international events and supporting the growth of the sector. In 2014, 636 international meetings were held in Korea, thus making it the fourth hosting country for these kinds of events according to the Union of International Associations. Korea's superb transport infrastructure, world-class readiness, and high-quality cultural resources all make it a very competitive destination for today's business travelers. Nowadays, a rising segment of business travelers have flexible schedules and thus look to add leisure days onto business trips. Offering this group just the right mix of business and leisure could considerably boost tourism revenues.

Recently, Korea has also experienced rapid growth in medical tourism, a fast-expanding sector with a continuous and significant growth potential. Ever-longer life expectancy, rising healthcare costs in developed countries, and globalization of modern medicine all contribute to the rise of patients willing to travel for healthcare. In the case of Korea, what initially started with cosmetic surgery driven by the K-wave boom has now expanded into a wide range of medical procedures. The potential for further growth is still high in Korea, given the world-class quality and price competitiveness of domestic medical care. The government can further boost the medical tourism market by promoting innovation in the medical industry, strengthening the legal framework for practices in medical tourism, and attracting more foreign investment in medical infrastructure.

Without a question, today's tourism industry is an economic powerhouse that acts as a major driving force for economic development. In these times of economic uncertainty and high unemployment, the Korean government should take the necessary steps to create a strong high value-added tourism industry by maximizing the country's cultural and natural resources and creating new resources by innovation. The implementation of a coherent long-term growth strategy for tourism, together with a strong drive to improve cultural contents such as K-pop, TV series and movies, will go a long way toward consolidating Korea's status as a global destination.

By Park Hee-kwon

Park Hee-kwon is ambassador to the Kingdom of Spain and Permanent Representative to the United Nations World Tourism Organization (UNWTO).

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