Where Success Knows No Limits Index Korea Where Success Knows No Limits 1. Industry Overview 3 2. Status of Korea’s Tourism Industry 11 3. Government Policies 14 4. Status of FDI 16 5. Investment Cases 17 Tourism & Leisure

Global tourism market overview Industry Overview Global tourism market overview The World Travel & Tourism Council (WTTC) reported that travel and tourism industries made a direct contribution of USD 2.2 trillion, up 3.1% YoY, to the global GDP and directly supported 101 million jobs in 2013. Number of inbound international tourists by year receipts Source: Financial Supervisory Service (FSS), as of December 2014

Average sales per tourism company Industry Overview Business status of the industry in 2013 $ Number of Enterprises Revenues KRW 23.29 Trillion Total Total 18,441 Average sales per tourism company Travel services 11,722 KRW 12.63 Billion Dominant business type

Revenues of companies in 2013 Industry Overview Revenues of companies in 2013 (Unit: KRW mn, %) Source: 2013 Basic Statistics of Tourism Businesses (Ministry of Culture, Sports and Tourism, October 2014)

Number of companies in 2013 Industry Overview The number of tourism business enterprises declined by 2.6% YoY in 2013. (Unit: No. of businesses, %) Source: 2013 Basic Statistics of Tourism Businesses (Ministry of Culture, Sports and Tourism, October 2014)

Number of inbound international tourists by year Industry Overview Inbound Korean travelers in 2013 Number of inbound international tourists by year Source: Tourism Knowledge & Information System (www.tour.go.kr)

$ 12.18 Overview of inbound tourists in 2013 Seoul mn people Industry Overview Overview of inbound tourists in 2013 Tourism receipts USD 14,525 million $ 12.18 mn people ↑ 52.5% ↓ 21.9% Most visited area Seoul 8

Key reasons when choosing Korea as a travel destination Industry Overview Inbound Korean travelers in 2013 Key reasons when choosing Korea as a travel destination Shopping 61.0% Culinary & gourmet 41.3% Natural scenery 39.0% Resort & leisure 18.0% Source: Tourism Knowledge & Information System (www.tour.go.kr)

Domestic trips by Koreans Industry Overview Inbound Korean travelers in 2013 Domestic trips by Koreans Unit: No. of people, No. of people/days) Source: Tourism Knowledge & Information System (www.tour.go.kr)

Status of Korea’s Emerging Tourism Industry Overview of tourist hotels The average occupancy rate of tourists 63.2% HOTEL 740 hotels 79,441 rooms

Status of Korea’s Emerging Tourism Industry Outlook for supply and demand of hotels According to an analysis of hotel demand and supply in Seoul, the daily demand for hotel rooms is estimated at 41,301 in 2017, outpacing the daily supply of 33,864 rooms and leading to a shortage of 7,437 rooms. Analysis of hotel room demand and supply in Seoul (Unit: No. of rooms) Demand & Supply 2014 2015 2016 2017 Demand (a) 31,205 34,212 37,561 41,301 Supply (b) 27,129 29,659 31,362 33,864 Supply- Demand (b-a) △4,076 △4,553 △6,199 △7,437 Source: Demand and Supply Analysis of Tourist Hotels (Korea Culture & Tourism Institute, 2014)

Status of Korea’s Emerging Tourism Industry Outlook for supply and demand of hotels The demand and supply analysis shows that the daily demand for hotel rooms on Jeju Island should amount to 16,106 in 2017, outpacing the daily supply of 12,904 rooms and leading to a shortage of 3,203 rooms. Analysis of hotel room demand & supply in Jeju (Unit: No. of rooms) Demand & Supply 2014 2015 2016 2017 Demand (a) 13,195 14,094 15,063 16,106 Supply (b) 10,115 12,208 12,496 12,904 Supply- Demand (b-a) △3,079 △1,886 △2,567 △3,203 Source: Demand and Supply Analysis of Tourist Hotels (Korea Culture & Tourism Institute, 2014)

Government Policies The government… Conducted a survey to resolve tourist inconveniences and promote the tourism industry. Is coming up with ways to support the establishment of tourism complexes. Is developing competitive tourism content and programs and enhancing the market readiness of the tourism sector . Supported the creation of the medical tourism hotel segment and the small hotel segment as sub-categories of the hotel business.

11 countries in Southeast Asia Government Policies Improving the visa system Country Details China Multiple entry visa-related eligibility to include the spouses and underage children of Chinese nationals who already hold a multi-entry visa Students at leading Chinese universities Chinese residents in Beijing and Shanghai and those who own timeshares in condominium resorts 11 countries in Southeast Asia The Korean government eased multiple entry visa requirements and extended the visa validity. Russia Marking the 2014-2015 Korea-Russia Mutual Visit Year, Korea and Russia entered into an agreement on mutual visa-free travel for 60 days starting in January of 2014.

Status of Foreign Direct Investment In 2013, foreign direct investment in tourism-related industries broke down to USD 916 million  in accommodations (23 cases), USD 21 million in food and beverage (104 cases) and USD 24 million in recreational sports (16 cases). Tourism-related FDI in 2013  Industry No. of cases Amount (USD 1,000)  Accommodations 23 916,421 Food and beverage 104 20,714 Recreational sports 16 23,635 Source: Ministry of Trade, Industry & Energy (www.motie.go.kr)

East-Busan Tourism Complex Investment Case East-Busan Tourism Complex Location: Daebyeon-ri, Gijang-eup, Gijang-gun, Busan Metropolitan City Project period: 2005-2017 Total project cost: KRW 4 trillion (Private investment: KRW 2.8 trillion) Project owner: BMC Corp.

Unyeo Tourism Complex in Anmyeon Island Investment cases Unyeo Tourism Complex in Anmyeon Island Location: Nudong-ri and Janggok-ri, Gonam-myeon, Jungjang-ri, Anmyeon-eup, Taean-gun, South Chungcheong Province Project period: 2007-2016 Total project cost: KRW 73.7 billion Project owner: South Chungcheong Development

Southwest Coast Tourism & Leisure City Investment Cases Southwest Coast Tourism & Leisure City Guseong District Location: Guseong-ri, Sanggong-ri, Deoksong-ri, Sani-myeon, Haenam-gun, South Jeolla Province Project period: 2006-2025 Total project cost: KRW 4.68 trillion Project owner: Southwest Coast Enterprise City Development Co.

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