The Ahn Interview: Meeting KTO Chief Executive Officer Jung Chang-Soo

The Moodie Davitt Report is pleased to bring you the latest in a series of articles from Asia Special Projects Editor Ahn Sang Joon, one of the most respected voices in the Asia Pacific airport commercial world. ‘The Ahn Interview’ features discussions with industry leaders right across the travel chain. Here he speaks to Korea Tourism Organization Chief Executive Officer Jung Chang-Soo.

Introduction: Tourism is the growth engine of the national economy and helps uphold the quality of life the citizens of South Korea have enjoyed for several years. Jung Chang-Soo is CEO of state-run Korea Tourism Organization (KTO), where he is leading a campaign to enable ‘tourism for all’ by creating shared value among industry stakeholders, including travel retailers.

Ahn Sang Joon visited Jung at a critical moment for the country’s tourism sector as it reels from the impact of the row with China over US anti-missile system THAAD. The system’s deployment in early 2017 provoked a ferocious backlash by the Chinese authorities, including a ban on group tours from 15 March.  That order prompted a -40% year-on-year fall in Chinese arrivals in March, followed by successive monthly declines of -66.6%, -64.1%, -66.4%, -69.3% , -61.2% and -56.1% from April through September. For the first nine months of 2017, Chinese arrivals decreased by -49.6% to 3,192,248. That represented a 32.1% share of total visitors, a startling drop compared with 46.8% for calendar 2016.

How then is KTO trying to rebalance the country’s over-reliance on Chinese visitors? How is it approaching the upcoming Winter Olympic Games (PyeongChang 2018), a major international sporting festival set to take place from 9 to 25 February 2018 in Pyeongchang County?

Korea Tourism Organization CEO Jung Chang-Soo (left) talks with The Moodie Davitt Report Asia Special Projects Editor Ahn Sang Joon about how the state entity is enabling ‘tourism for all’. Key to achieving that goal is creating shared value among tourism industry stakeholders, including travel retailers.

Ahn Sang Joon: Can you give us an insight into the Korea Tourism Organization, its main agenda, structure and achievements?

Jung-Chang Soo: The Korea Tourism Organization (KTO) was established in 1962 when Korea’s tourism industry was at an early stage. Before privatisation, hotels, travel agencies and even tourist taxies were controlled by KTO [so were airport duty free shops -Ed].  The purpose of our establishment was to build a strong foundation to attract international tourists to our country. The number of inbound tourists to Korea reached 6 million in 2005. This number showed gradual growth with 8 million in 2010, over 10 million in 2012 and jumped to 17.24 million in 2016.

“According to a survey conducted in 2016, 75% of tourists visiting Korea are Free Independent Travellers (including flight+hotel package travellers)”

Currently a quasi-governmental organisation, the KTO implements tourism-related policies such as increasing inbound tourism, promoting and boosting domestic tourism, and improving industrial competitiveness.

Today, KTO’s main office is located in Wonju, Gangwon-do Province. There are nine regional branch offices throughout Korea, and 32 international offices in 21 countries around the world.

What have been the major changes in Korea’s inbound tourism market in light of the recent deterioration in diplomatic relationships between Korea and China?

From 2013 the number of inbound tourists from China had rapidly increased. Last year they accounted for 47% of total inbound tourists to Korea. However, after China announced it would ban all group travel to South Korea as part of its response to South Korea’s decision to deploy the US Terminal High Altitude Area Defence (THAAD) missile system in March of this year, the share dropped to 28% by July.

“We are refocusing on Japanese travellers and diversifying Korea’s tourism market to reach tourists from Russia, Southeast Asian Muslim countries, Hong Kong and Taiwan”

Although this decline in Korea’s inbound tourism market is expected to last for quite some time, the Korean government and the KTO will continue building a safe and enjoyable environment for tourists. These efforts include continuous improvements in tourism infrastructure, for example in transportation and accommodation. But it also includes the creation and development of more appealing tourist content and products. By doing so, we will be better equipped and prepared to welcome inbound tourists once external factors have stabilised.

More importantly, we will secure a sturdier tourism foundation, which was highly dependent on Chinese tourists. We are refocusing on Japanese travellers and diversifying Korea’s tourism market to reach tourists from Russia, Southeast Asian Muslim countries, Hong Kong and Taiwan.

 “We are reaching out to Muslim tourists, who amount to 200 million travellers worldwide, by focusing on improving the Muslim infrastructure”

In order to promote Korean tourism in such markets, we’ve been hosting the Korea Culture and Tourism Festival every year, arranging briefing sessions, attending tourism and travel fairs, and conducting online promotions.  Also, to reach out to Muslim tourists, who amount to 200 million travellers worldwide, we are focusing on improving the Muslim infrastructure. For example, by establishing a Muslim-friendly restaurant/food certification system, and increasing the number of prayer rooms in the country.

In addition, we have created a web portal where tourists can find useful information on tours and also purchase tour packages. We are also working on building an online travel platform where tourists can report inconveniences while travelling, such as difficulty in communication, transportation, food and so on.

Where does Korea stand in the world’s tourism market and how would you sum up its appeal to global tourists?

With 17.24 million arrivals in 2016, the number of international tourists visiting Korea has tripled over the past decade. According to the World Tourism Organization (UNWTO)’s World Tourism Barometer, Korea ranked 20th in inbound tourism. In addition, compared to its 29th place in 2015, this year Korea stands at number 19 in the Travel and Tourism Competitiveness index, a biennial report conducted by the World Economic Forum.

As you know, Korea has become a more attractive and appealing travel destination due to the recent popularity of hallyu, the ‘Korean wave’, which has spread through Korean culture, TV drama, cosmetics, food and K-pop music. And there are still many other areas and aspects of Korean tourism to be improved and introduced to tourists.

With a history of over 5,000 years, Korea has a diverse pool of tourism resources that attract tourists from around the world.  Travellers from Europe and the Americas tend to prefer nature-oriented attractions and traditional experience programmes, while travellers from China, Japan and other Asian and Northeast Asian countries are more interested in trendier city attractions, shopping and hallyu, which has been rapidly spreading beyond Asia to the rest of the world. People in the Middle East, Central Asia, and Russia find Korea attractive as a medical tourism destination.

Can you tell us more about Korea’s popular tour programmes, travel themes and package deals that are most favoured by global tourists?

According to a survey conducted in 2016, 75% of tourists visiting Korea are Free Independent Travellers (including flight+hotel package travellers). This indicates that most inbound tourists to Korea prefer making their own plans and choosing where to go and what to eat according to their tastes rather than following typical tours. Themes and styles of travelling also differ by country and region. For instance, people from Japan enjoy food-themed tours, those from China enjoy shopping, tourists from Southeast Asia focus on hallyu attractions, and those from Europe and the Americas prefer tradition and culture-themed tours.

Since the THAAD furore began, the share of total tourist arrivals represented by Chinese visitors has dropped from 47% in 2016 to just 29.5% in September

 

The KTO has been striving to raise the industry’s competitiveness by diversifying the tourism base away from its reliance on Chinese visitors

What are the most popular items tourists buy in Korea? What would you recommend to those who visit?

Last year the most popular Korean products among international tourists were cosmetics and perfumes, followed by food products and clothes. I think the popularity of Korean cosmetics is due to the recent hallyu phenomenon that is very quickly spreading across the world through K-pop and Korean dramas.

Since 1988, the Organization has been holding the annual Korea Tourist Souvenir Contest to develop better souvenirs for tourists. So far over 1,800 souvenirs have been introduced. Among them, there are many items that well represent Korea’s traditional culture and regional uniqueness. There are also more practical items that were chosen as official souvenirs of the President, to use as gifts while on overseas trips. I think they will be great souvenirs for international tourists in Korea to take back home.

Visitors from Japan enjoy food-themed tours while those from China enjoy shopping. Tourists from Southeast Asia focus on hallyu attractions, and those from Europe and the Americas prefer tradition and culture-themed tours.

What projects are in place to boost domestic tourist demand and increase the average individual purchase by tourists?

In the past, Korea was considered a low-cost tourist destination ideal for shopping. But today, it has grown to become a popular tourist destination due to a boost in the domestic tourism.  The KTO has been focusing on developing various value-added tour products. In May 2017, Korea was included in the Four Seasons Private Jet tour, a high-end travel package (W150 million per person) organised by Four Seasons Hotels and Resorts. And in July, industry agencies and organisations launched the ‘Council for the Promotion of High-Class Premium Tourism Product Development’.  We also endeavour to explore various local tourist attractions through regular consultation with regional tourism organisations.

“The successful bidding for PyeongChang 2018 is a great opportunity for Korea to improve and promote Korea’s tourism industry.”

Also, the KTO continues to cooperate with the government and travel agencies to develop new and innovative tourism content by bidding to host international conferences and corporate incentive travel groups to Korea. We are also developing ‘Medical Wellness’ tour packages that combine Korea’s advanced medical technology with the beauty industry, and developing the ’10 Themed Tours in Korea’ to promote major tourist regions in the country.

What is the biggest task that lies ahead for the KTO and Korean tourism for further growth and improvement?

In order to make Korea an attractive tourist destination, it is necessary to revitalise domestic tourism by creating an environment that locals can enjoy, and by exploring new tour themes.

Jung feels it is important to raise the profile of domestic tourism by improving tourist sites and beneficial local policies

One of the major reasons that Koreans don’t travel much is that they don’t have enough time. South Koreans work the second-longest hours among OECD countries. Therefore, it is crucial to create a social environment where people can use their holidays when desired, and to raise positive awareness that the use of holidays can contribute to boosting domestic tourism.

“KTO has been implementing the K-Smile campaign under the slogan ‘If Korea smiles, the world smiles with you”

It is also important to develop strategies and deals that encourage Koreans to travel more by introducing more tourist sites around the country, and establishing convenient and beneficial policies. For example, travel vouchers distributed by the government and organisations like us to help with travelling expenses of employees.

And in the mid-to-long run, continuous investments need to be made strengthen tourism sector infrastructure. For example by expanding transportation and improving accommodation facilities.

How do you intend to leverage the PyeongChang 2018 Olympic Winter Games in order to increase global awareness of Korea as a tourist destination?

The successful bidding for PyeongChang 2018 is a great opportunity for Korea to improve and promote Korea’s tourism industry.

KTO is improving tourist accommodation and information at the sites for PyeongChang 2018

When travelling abroad, the first impression of a country comes from how much they are welcomed, and that first impression determines whether or not to revisit the country.

Along with the Visit Korea Committee and other organisations, KTO has been implementing the K-Smile campaign under the slogan ‘If Korea smiles, the world smiles with you.’  This campaign aims to bring a smile to everyone and show Korea is a kind and friendly country that everyone wants to return to. We are also placing every effort into creating a favourable tourism environment in regions where the PyeongChang 2018 events will be held, improving accommodation and other facilities, and also providing restaurant menus and street/information signs in other languages.

For international tourists visiting Korea for PyeongChang 2018, we have been developing attractive and convenient tours and packages in cooperation with local communities. I especially recommend the ’10 Tourist Routes for the PyeongChang 2018′, which combines the local features of the provinces — nature, food, festivals, etc.— with traditional culture and history.

“In this fast-changing world, I witnessed plenty of people in the public sector making mistakes due to their deep-rooted stereotypes and rigidity”

In addition, we’re also reaching out to travellers in Europe, the Americas and Southeast Asia by hosting the annual Korea Culture and Tourism Festival in each region, and also participating in major tourism fairs such as FITUR, ITB Berlin, and World Travel Market.  Other efforts include developing various invitational tour programmes for international media and tourism industry personnel.

You are a hugely respected figure in the Korean tourism industry. Are there any words of wisdom you would like to share with those in the sector?

My 40-year career in public service has taught me to never become complacent. In this fast-changing world, I witnessed plenty of people in the public sector making mistakes due to their deep-rooted stereotypes and rigidity, and I have also fallen into such habits sometimes. But what is important is the willingness to change and be able to see things from a new perspective. In order to that, you need to let go of things, and that’s what I believe makes a public employee who truly thinks of and cares for the people.

“In Tongyeong, the view of the sunset glowing on the ocean and the islands created such breath-taking scenery” 

Finally, what has been your most memorable travel experience?

I think it was around 2014 when I was taking some time off from work. We went on a long overdue family trip down to Namhae. Late in the afternoon we took the cable car in Tongyeong, and we watched the sunset. The view of the sunset glowing on the ocean and the islands created such breath-taking scenery.

I can still vividly remember the feeling of seeing such scenery. Tongyeong is often dubbed the ‘Naples of the Orient’, and that was probably one of the reasons.  I think that was the most beautiful seascape I’ve seen in my life.

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