Relaxed visa rules open door to surge in tourism

Jong Min Kang’s South Korean relatives are exactly the kind of travelers American hospitality and retail businesses are yearning for during this time of financial despair -- free-spending foreigners on vacation.

Members of his large family -- there are 70 cousins altogether -- have vacationed in Australia, Cambodia and China. But they’ve never come to the United States because they dreaded the long lines, interminable waits and nosy interviews required to get a visa.

Soon they may be able to skip all that.

The federal government plans to add South Korea and six Eastern European countries to its list of places whose nationals will be allowed to visit the United States without a visa.

The move -- which could go into effect as early as next month -- will give travelers from those areas the same privilege already enjoyed by residents of Britain, France, Spain, Japan and other European and Asian allies.

Backers hope the program will bolster the U.S. tourism industry, which relies increasingly on foreign visitors.

Recent promotional efforts are credited with helping to produce a 10% increase in the number of international visitors to the United States in 2007 over the previous year, growth that continued at least through the first half of 2008. But the volume of tourists from Europe, Asia and other destinations is still down since the terrorist attacks of Sept. 11, 2001. Last year, 24 million overseas travelers visited the U.S., down from 26 million in 2000.

“International travel is absolutely critical to supporting the American economy,” said Geoff Freeman, senior vice president of public affairs for the Travel Industry Assn., which lobbied for the recent expansion of the visa waiver program.

The association says tighter entry procedures since the Sept. 11 attacks have cost the U.S. 46 million overseas visitors and $140 billion in lost spending. Add to that the current global financial crisis, and the number of overseas visitors to the U.S. could actually drop overall next year, from an estimated 25.6 million this year to 24.8 million in 2009, the association said.

U.S. tourism officials hope that easing visa rules will help turn that trend around as soon as 2010.

With a lifting of the visa requirement, the number of South Korean tourists to the U.S. is projected to more than double to 1.8 million annually within the next two or three years from 800,000 in 2007, the association said.

Travelers from the Czech Republic, Hungary, Estonia, Latvia, Lithuania and Slovakia will also be allowed to visit the U.S. for 90 days without visas, and officials hope they generate several hundred thousand more visits in the coming years as they begin to find it easier to come to the United States.

It’s the first time the U.S. has expanded the waiver program since 1999 and could bring to 34 the number of nations whose residents can enter without a visa.

Of course, the slumping worldwide economy has eaten away at foreign wealth along with American wealth. The South Korean currency and stock market have taken steep dives. Lithuania is teetering on recession and the Estonian kroon is losing its value against the U.S. dollar.

“With the financial crisis, people are generally going to be very careful about traveling now,” said Anders Aslund, senior fellow at the Peterson Institute for International Economics. “It’s going to be more expensive because of higher energy prices and the rising U.S. dollar.”

Though this is worrisome to tourism officials, some say any hike in overseas travel is welcome.

“We’re concerned, but the past has shown that international travelers always stay longer and spend more,” said Mark Liberman, president and chief executive of LA Inc., the city’s convention and visitors bureau.

Overseas travelers tend to spend about $4,000 a trip, according to the Washington-based Travel Industry Assn. By comparison, domestic travelers spend an average of $557 a trip, and their ranks have been thinned by the slow economy.

Officials say Southern California will be one of the main beneficiaries of increased South Korean tourism. The region is home to 600,000 Korean Americans and a Koreatown in Los Angeles that some liken to a district of Seoul.

Currently 200,000 South Koreans visit the L.A. area each year. Analysts expect that number to increase by 100,000 in the first 12 to 18 months after the program kicks off.

“Starting from Los Angeles, they will go to Universal Studios, Disneyland and the downtown area,” said Edward Han, director of operations for the Wilshire Plaza Hotel in Koreatown. “They will look at the rest of America from here and realize they can go to San Francisco or Las Vegas and also the Grand Canyon and Yellowstone.”

Han, who has been following developments of the visa deal in the Korean media for months, hopes for a 15% increase in occupancy because of South Korean tourists. He has been in contact with Korean-speaking travel agencies to prepare for the potential influx, making sure his hotel can accommodate more tour groups.

Already, South Korean carrier Asiana Airlines announced that it would reinstate direct flights between Seoul and L.A. in December after a 17-year hiatus. It also plans to add nonstop flights between Seoul and Seattle. Korean Air said it would also increase flights to Los Angeles next spring.

The potential boost in travelers comes at a time when the local tourism industry is showing signs of weakening -- a product of the nation’s economic trouble, analysts say.

“With the acceleration of the financial crisis the last 45 days or so, we’re seeing an increased downturn in travel,” said Bruce Baltin, senior vice president of BKF Consulting Corp., which monitors the hotel industry.

“Right now, it’s more from the corporate segment than leisure segment. . . . International travelers are very valuable to our economy. With the L.A. hotel industry not doing so well, we could obviously use a boost.”

Baltin estimates that occupancy in Los Angeles hotels declined 6% to 8% this month compared with the same time last year, the largest such drop since the post-9/11 slump. A sustained funk could soon jeopardize jobs and force hotels to scale back services such as food and beverages, Baltin said.

Partly in response to national security concerns, the visa requirements will not change until South Korea and the other countries implement an electronic authorization system for outbound tourists so that U.S. officials can vet visitors before they arrive. They must also finalize agreements on sharing law enforcement intelligence and show that their recent visa rejection rates have not exceeded a U.S.-set threshold.

The countries have until Jan. 12 to set up the authorization systems, but U.S. authorities hope that everything will be in place much sooner, perhaps by late November.

The expansion can’t come too soon for businesses such as New Global Travel Service in Koreatown. Revenue has sunk 30% compared with this time last year, the worst since the Sept. 11 attacks, the firm said.

The president of the 33-year-old company plans to fly to South Korea on Wednesday to meet with travel agencies in hopes of signing partnerships to seize on the potential growth in visitors.

“Its been so slow,” said John Park, a sales associate. “We could definitely use the extra business.”

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david.pierson@latimes.com