S. Korea Opens Door Outward for Its Tourists : With Business Booming at Home, Curbs on Foreign Trips by Own Citizens Ease

At Global Tours Corp., the excitement these days is not about the Olympic Games, which open here Saturday, but about its plans for its first overseas honeymoon excursions for Korean couples and its new tours to China.

Although the Olympics are being called a “turning point” for South Korea’s tourist industry, tourism to this nation has posted such ever-increasing gains that a post-Olympics letdown is expected to cause hardly a hiccup.

Meanwhile, the government, which until 1983 banned overseas pleasure trips by its citizens, will lift the last of its restrictions next Jan. 1, opening foreign travel for Korean tourists in their 20s, the marrying age, for the first time. The restrictions were the result of worries about foreign currency depletion at a time when the foreign debt was rising but those worries have now eased.

“We’ll start advertising our honeymoon tours in October,” said Shim Kwang Jo, Global’s overseas travel manager.

Shim, who expects his tour company’s business to triple, is also looking forward to another opening--to China. On Sept. 27, Global’s first tour--for 30 executives who will combine business and pleasure in a two-week visit--will leave for five Chinese cities, he said. Two more China tours are planned this year.

Next year, China will start accepting ordinary tourists from South Korea, Lew Hwan Kyu, director of the international activities division of the Korea National Tourism Corp., said in an interview.

Although China was allied with Communist North Korea in the 1950-53 war with South Korea and maintains diplomatic relations with the North but not with the South, Beijing officials have visited the government tourism corporation in Seoul twice to explain their new policy.

Inadequate facilities in China will force Beijing authorities to set a tourist quota for South Korea, Lew added.

Winning the right to host the Olympics, he said, “was a turning point” for South Korea’s image, lifting it above the old memories of the Korean War and ugly political strife. Now, he said, foreigners recognize the merits of the country in political, social, economic and cultural fields.

Just two decades ago, Seoul was a backwater outpost seldom included on Asian tours. In 1965, the entire country had only 2,648 tourist hotel rooms and only 33,464 foreigners visited it that year. Not until 1978 did visitors exceed the 1 million mark.

This year, 2.2 million visitors are expected, Lew said--and only in part because of the Olympics.

The Bank of Korea estimated that because of the Olympics 240,000 visitors will come here this month. and 210,000 next month, only slightly above the monthly average of 190,000 visitors so far this year.

Hotels Booked Solid

Olympics tourism revenue, officials at the central bank said, was expected to amount to about $150 million, a small fraction of the $3 billion that visitors are expected to spend here in 1988.

Top hotels, which raised normal rates by around 50% for the Olympics period--to more than $250 a night--are booked solid through the first half of the Summer Games, with the overflow being handled by yogwan, Korean-style inns.

Yang Hyung Ho, head of the Transportation Ministry’s tourism facilities section, said the government placed a cap on hotel building by limiting construction permits to meet only the expected demand in slack seasons, rather than at peak times. It did allow a 26% expansion this year--to 34,500 tourist hotel rooms throughout the country. But in each of the next three years, he said, the annual growth in the number of rooms will be only about 9%.

Since 1986, Lew noted, “there have been periods when there were utterly no hotel rooms available in Seoul,” and the extra capacity to be provided after the Olympics by the 3,500 rooms in the capital that were built for the games is not expected to meet the growing need for long.

By next year “we will be short of rooms once again, at least in the peak seasons,” Lew said.

Indeed, he said, rooms may be hard to book even in the next two months. The Lotte, Hilton and Chosun hotels confirmed that they already are about 90% filled for that period.

Officially, the government has made estimates of demand only until 1991, when the number of visitors is expected to surpass 3 million. Lew said, however, that the forecast did not take into account the likely negative impact on tourism of the growing strength of South Korea’s currency, the won, which has been picking up speed as the nation’s trade surpluses continue to grow.

The depreciation of the dollar relative to the won, he said, has already slowed the growth rate of the number of visitors from the United States, but that slack has been more than filled by an explosion of visitors from Japan. Flush with their strong yen, which only recently has begun to lose a portion of its value against the won, Japanese now make up nearly half of South Korea’s visitors. Americans make up slightly more than one-sixth.

Japanese are attracted to South Korea’s cultural sites, cuisine, shopping bargains and its proximity, Lew said. They also come for gambling at the foreigners-only casinos in Seoul, Pusan and on Cheju Island. Chinese from Hong Kong, although far less numerous, he added, are the most intense gamblers and the biggest spenders.

For Americans, shopping is No. 1, followed by tours of historical and cultural sites, Lew said.

South Korea’s booming economy and its rising trade surpluses, which are bringing in so much foreign currency that an increase in the money supply is beginning to stir up inflation after six years of stable prices, spurred the impending liberalization of foreign travel by Koreans.

“A few years ago, the U.S. dollar was so important to (government officials), they didn’t understand the benefits of mutual travel,” said Global Tours’ Shim. Now, after a current accounts surplus that reached $9.9 billion last year and is still climbing, “the government is desperately trying to find ways to spend the dollars.”

The strict regulations have curtailed overseas travel by Koreans to an annual level of about 500,000--less than 1% of whom left the country on pleasure trips--for the last six years.

“We could arrange pleasure tours,” Shim said. “But we had to create the pretext of some kind of international conference.”

Will Lift Limits

The government’s lowering of the minimum age required for overseas tourist travel to 40 (which began Jan. 1) and to 30 (starting July 1) already promises to raise the number of Koreans traveling abroad this year to around 700,000, according to Lee Chan Jae, the Transportation Ministry’s international tourism section chief.

Next year, the limits on age and on the funds that can be taken abroad, now $5,000 a trip, will be lifted. The government is also expected to start issuing passports good for several years, rather than for just a single trip.

Problems in obtaining visas from understaffed U.S. consulate offices here promise to deflect much of the expected explosion in overseas travel next year away from U.S. destinations, both Shim and Lew said.

The visa snarl generates so many headaches--including a requirement for a personal interview for all first-time visitors and a minimum two-week wait--that “no tourist firm in South Korea actively promotes travel to the United States,” Shim said, even though they do organize American tours.

Widespread forgery of documents by Koreans trying to illegally obtain visas to reside in the United States, combined with inadequate budgets to staff the consular offices here, have caused the crunch.

Predictions on the impact of relaxed restrictions on overseas travel range wildly--from an increase of only 100,000 to a burst of 500,000 new Korean travelers next year.

“Koreans between 30 and 50 are the ones most interested in travel overseas, and they have the money to do it,” Shim said. “People in their 20s will have to rely on someone else to pay for their trips.”

Already, a rush of Korean tourists is making an impact on Asian cities, such as Taipei, Bangkok and Hong Kong.