Asia Times: The Koreas


	June 25, 2002	atimes.com

The Koreas

Co-hosting hurts Korea's World Cup tourism

SEOUL - The unprecedented decision by soccer's governing body, the Federation Internationale de Football Association (FIFA), to allow South Korea and Japan to co-host the 2002 World Cup soccer finals has cost the local tourism industry dearly as Japanese have stayed home in droves.

However, all is not lost. The central Bank of Korea has calculated a rare surplus in the tourism industry's balance of payments, with other foreign tourists largely making up for the dearth of Japanese while Koreans have stayed home instead of spending their won overseas.

Thrilled by the Brazilian, English and other national soccer teams playing in Japan, Japanese soccer fans have stayed hunkered down watching matches in their own land. To the dismay of the local tourism industry, the number of Japanese tourists declined drastically since the beginning of the World Cup soccer finals in Korea on May 31.

Based on figures released by the Ministry of Culture and Tourism, the number of Japanese tourists will drop by about 40 percent to 140,000 in June from 225,000 during the same period a year ago.

"We expect that the total number of foreign tourists visiting the country in June will not exceed 460,000, the level of last June, because of the sharp drop in the number of Japanese visitors who constitute the largest portion of foreign tourists here," a ministry official said.

The official held FIFA's agent for World Cup ticket sales, Byrom PLC, partly responsible for the less-than-expected foreign turnout, saying, "Domestic tourist agencies could not secure enough hotel rooms for [the] marketing of World Cup tour packages because Byrom blocked a large number of hotel rooms and World Cup tickets in advance."

Byrom has been under fire in both South Korea and Japan for canceling reservations of a large number of hotel rooms just before the World Cup events started on May 31 and mishandling the sale of World Cup tickets.

Industry sources said that the average room-occupancy rate for five-star hotels remains at less than 80 percent in June, which is more than 10 percent lower than the rate in June last year.

The comparable number for lower-grade hotels is slightly over 50 percent, the sources said.

Korean Air and Asiana Airlines report 70-80 percent of their seats sold in June, similar to last year's figures. However, occupancy on Korea-Japan routes is just about 53 percent. Increased demand from Europe, the United States, Southeast Asia and China offset the large drop in Japanese passengers.

The situation is the same for tour agencies. Industry insiders said the number of Chinese tourists surged by about 60 percent this month compared with last June, predicting that as many as 60,000 Chinese will visit in June alone.

Tourists from Europe also rose about 40 percent in June from a year earlier, they said.

"We see no World Cup boom in the tourism industry," an industry source said. "We no longer anticipate a rise in the number of foreign tourists in the remaining World Cup period toward the end of June and are now moving to develop tour packages for the summer holidays which follow the World Cup events."

The Ministry of Culture and Tourism recently lowered the anticipated number of foreign visitors in June to 460,000 from the original target of 640,000, because of the adverse market conditions.

"There, however, still exists a World Cup boom in the tourism industry, although the number of foreign visitors did not rise as much as we originally expected," a ministry official said.

"We're pleased visitors from other countries compensated for the reduction in the number of Japanese tourists," he continued. "The market diversification will eventually lead to a steady increase in the number of foreign tourists visiting the country in the near future after the World Cup events."

Ministry officials hope that foreign media's extensive coverage of the World Cup events, including the strong performance of the Korean national soccer team, the spectacular scenes of millions of red-shirt-clad people cheering in streets in an orderly manner and other upgraded images of Korean society, culture and economy will help attract foreign tourists on a mid- and long-term basis.

The local tourism industry, which appears to have missed the much-anticipated World Cup boom, now has to wait and see whether the ministry's hope actually comes true.

The number of outbound Korean tourists halved for the first three weeks in June, according to the BOK, which expects a surplus of US$300 million in the tourism industry for the month. It is the first time since April that the country's balance of payments for the tourism industry will be in the black.

The central bank originally predicted that the tourism industry surplus would reach $570 million but the number shrank because of the sharp decline in the number of Japanese tourists visiting South Korea.

South Korea recorded a $1.29 billion of deficit in the tourism industry balance of payments last year, up from $290 million a year earlier.

(Asia Pulse/Yonhap)