The Korea Tourism Organization (KTO) faces questions about its role in the tourism sector. On August 5, during a report on the Ministry of Culture, Sports and Tourism, President Lee Jae-myung inquired about the functions of KTO's overseas offices. KTO President Park Seong-hyeok responded that these offices are responsible for attracting foreign tourists and conducting local marketing. The president immediately countered, asking, "Isn't that the job of travel agencies?" He then directed Minister of Culture, Sports and Tourism Choi Hwi-young to submit performance reports for each overseas office.
This question is understandable from an administrative perspective. If a public institution operates overseas offices performing tasks similar to those of the private sector, it raises the question of why taxpayer money is being used to fund them. Given the government's stance on thoroughly reviewing the functions and scale of public institutions, it is natural for the 30 overseas offices to be scrutinized.
However, the tourism industry cannot be simplified to just the term 'attraction.' Park explained that the tourism ecosystem is complex. Travel agencies sell travel products directly, while KTO creates the foundation for these products to enter the market. The primary function of the overseas offices is not to directly recruit tourists but to establish markets and distribution networks that allow the private sector to attract tourists.
This is where the necessity of overseas offices becomes clear. They serve as hubs for expanding overseas markets, connecting local travel agencies, airlines, and online travel platforms (OTAs) with the domestic tourism industry, while also relaying consumer preferences and market changes back to Korea. When local governments launch new tourism products, the overseas offices help tailor and promote these offerings by linking them with travel agencies, airlines, and distribution networks. The perception that KTO competes with travel agencies is inaccurate; if travel agencies are the players on the field, KTO is more akin to the organizers of the event.
The government's emphasis on revitalizing local tourism aligns with this role. Just having excellent tourism resources in a region does not guarantee that foreigners will visit. These resources must be developed into quality products and distributed in overseas markets, supported by integrated transportation, accommodation, and logistics networks. While the government can set policy directions, markets do not form spontaneously.
Incentive tours and meetings, incentives, conferences, and exhibitions (MICE) are areas that most clearly demonstrate the need for overseas offices. Large events involving thousands, sometimes tens of thousands, of participants are not decided right before they occur. Building trust with local businesses, associations, event planners, and airlines takes years before Korea can be considered a candidate to host such events. This is why consistent management of overseas operations is essential.
Many domestic tourism businesses struggle to establish their own overseas sales networks, particularly local tourism companies, small businesses, and tourism ventures. Overseas offices provide these entities with information, networks, and support for joint marketing, helping them connect with local markets. This is not about replacing the sales efforts of specific companies but enhancing the overall competitiveness of the tourism industry.
That said, the current structure of overseas offices is not necessarily the best solution. Public institutions must demonstrate their value through results. The same applies to overseas offices. They must continuously assess their performance in various markets, determine whether a local presence is still necessary, and identify areas where the private sector can adequately perform tasks. If an organization fails to adapt to changing times, it should be restructured. Merging underperforming offices and concentrating resources in high-potential markets is a rational approach.
The performance data requested by the president is significant in this context. However, evaluating overseas offices solely based on the number of visitors is limited. It is essential to examine factors such as the contribution to the international expansion of regional tourism products, success in attracting corporate meetings and MICE events, the role in expanding airline routes, and the support for domestic tourism companies entering foreign markets. This comprehensive analysis will help distinguish areas that need restructuring from those that should be further developed.
Notably, during the exchange, the president and KTO provided different questions and answers. The president asked 'why'—why should a public institution take on this role? KTO explained 'what' it does. It would not have been easy to fully justify the necessity of overseas offices in such a brief Q&A. Nevertheless, the question of 'why should the public sector be involved?' remains unanswered.
This question is likely not limited to KTO alone. Other public institutions under the government will also face similar inquiries. They must prove why the government should operate these organizations, what differentiates them from the private sector, and whether they create enough public value to justify their funding with taxpayer money.
KTO must provide not only performance reports for each overseas office but also an answer to why these responsibilities should fall to the public sector. That answer will be articulated through results and data, not just justification.
* This article has been translated by AI.
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