The government has announced its goal of attracting 40 million foreign tourists, significantly raising its initial target of 30 million. Plans include constructing large arenas and hosting massive festivals to draw more visitors to South Korea. However, as the target for tourist numbers rises, there is little clarity on how to secure accommodations for these visitors.
Next December, the Seoul Arena in Changdong and KINTEX in Goyang will host the inaugural K-culture festival, 'FANOMENON.' This event, akin to a Korean version of Coachella, will feature K-pop concerts, award ceremonies, and showcases of film, drama, gaming, webtoons, fashion, and beauty. The Cultural Exchange Committee anticipates that 520,000 attendees, including 200,000 foreign tourists, will generate over 1 trillion won in economic impact. The 18,269-seat Seoul Arena is also set to open next year.
Looking at the trend of increasing foreign visitors, the outlook is not merely optimistic. In the first half of this year, 10.71 million foreign tourists visited South Korea, a 21.3% increase compared to the same period last year. In June alone, 1.99 million people traveled to Korea. Following last year's record of 18.94 million visitors, the growth trend continues.
The challenge lies in accommodating these tourists.
Concerns about the supply of accommodation have emerged. The Board of Audit and Inspection pointed out deficiencies in the accommodation supply analysis conducted by some local governments during a regular audit of the Ministry of Culture, Sports and Tourism last year. The Seoul city government calculated the growth rate of available rooms at 1%, instead of the 4.79% increase in the number of businesses, and the ministry approved this without proper verification, according to the audit.
Forecasts from the Seoul city government and the ministry differ. The city predicts that there will be enough accommodation for foreign visitors by 2026, while the ministry believes there will be a shortage. The audit recalculated the figures, indicating that if foreign visitors reach 19.11 million, there will be a shortfall of hotel rooms in Seoul. Given that last year's visitor count was already 18.94 million, the need for expanding accommodation cannot be delayed any longer.
In response, the Seoul city government is taking steps to increase hotel supply. It has designated 63 areas, including major hubs like Myeongdong, as tourism accommodation zones and plans to relax floor area ratio regulations for qualifying facilities by up to 1.3 times. In general commercial areas, the floor area ratio could be increased from 800% to a maximum of 1,040%.
Policies are also in place to encourage tourists to visit regional areas. The strategy includes expanding international routes from regional airports and creating a 'Golden Route' for inbound tourism. In the first half of this year, the number of foreign visitors arriving at regional airports reached approximately 1.96 million, a 42.1% increase compared to the same period last year, significantly outpacing the 17.3% growth rate at metropolitan airports. The regional visitation rate for foreign tourists in the second quarter also rose to 34.2%, an increase of 2.8 percentage points from the previous year.
Distributing tourists to regional areas is essential. Attracting 40 million visitors concentrated in Myeongdong, Hongdae, and Seongsu-dong will not foster a true tourism powerhouse or invigorate local tourism. However, simply dispersing tourists will not resolve Seoul's accommodation issues, as the city remains a key destination for first-time visitors.
Many large cultural events, including FANOMENON and K-pop concerts, are also concentrated in the metropolitan area. Yet, building hotels indiscriminately is not a solution. The process of acquiring land, obtaining permits, and constructing hotels can take years, making it difficult to meet the rapidly increasing demand for tourism. This highlights the need to adapt the shared accommodation system to current realities.
The current foreign tourist city lodging business allows urban residents to offer accommodation services to foreign tourists in their homes. As of May, there were over 9,800 such establishments nationwide, according to the Ministry of the Interior and Safety. Recently, the government has initiated a plan to require mandatory disaster liability insurance, which compensates up to 150 million won per person for injuries and up to 1 billion won for property damage in the event of fires, explosions, or collapses, to enhance safety measures.
This does not mean opening the floodgates without restrictions. Noise, littering, and parking issues in residential areas must be strictly controlled, and establishments that do not meet safety standards for fire and evacuation must be rigorously managed. Fairness with existing hotels, which bear taxes and various regulations, must also be maintained.
The key is to manage and utilize accommodations properly within the regulatory framework. Clear standards for business registration, safety facilities, insurance coverage, tax payments, and resident conflict resolution must be established, allowing compliant accommodations to serve as lodging for tourists. Illegal accommodations should be strictly regulated, but there is no need to confine compliant establishments within outdated regulatory frameworks.
Attracting tourists is not the entirety of tourism policy. Equally important is where they stay and how comfortably they travel. To turn the goal of 40 million tourists into reality, the necessary accommodation infrastructure must be established to match this target.
* This article has been translated by AI.
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