Korean government subsidizes hotel bills to boost tourism | HaB Korea.net

Korean government subsidizes hotel bills to boost tourism

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The government will begin offering discount coupons for hotels, resorts, guest houses and motels across the nation on Friday, as part of its large-scale projects to revitalize the tourism industry hit hard by the COVID-19 pandemic.


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The projects are also aimed at helping citizens recover from mental fatigue caused by the prolonged public health crisis that has created many changes in daily life.

The government decided to launch the projects on May 26 during a meeting presided over by Prime Minister Chung Sye-kyun and participated in by relevant ministries, provincial governments, and travel agencies.

The Ministry of Culture, Sports and Tourism and the Korea Tourism Organization (KTO) said governments of many other countries have already implemented a variety of projects to support the virus-hit tourism industry. For example, Japan launched the Go to Travel campaign that subsidizes people’s expenses for hotels, transportation, and tourist attractions, among others, to promote domestic tourism.

The ministry and the KTO said 29 billion won ($25 million) has been allocated for the program providing citizens with discount coupons for accommodations. Citizens can get one discount coupon per person when they book accommodations via 27 online travel agencies including Yanolja, Interpark, Gmarket, 11st, and Myrealtrip.

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One million discount coupons are distributed ― 200,000 coupons that offer 30,000 won discounts for accommodations not exceeding 70,000 won, and 800,000 coupons that offer 40,000 won discounts for those over 70,000 won.

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The coupons are available for expenses in September and October, the KTO said, noting that this will help create demand for travel during the off-peak season.

The summer peak season is usually between July and August in Korea. For their part, online travel agencies participating in the program have come up with a variety of their own promotions, including special discount events in partnership with credit card companies, to offer more benefits to customers along with the discount coupons.

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The KTO has prepared various support programs as well, including one helping people with disabilities who face difficulties in enjoying travel.

“We have encouraged small and medium-sized travel agencies to participate in the program, and will actively support their accommodation fee discount in cooperation with 11st,” said Kim Seok who is in charge of tourism and welfare at the KTO. “The KTO, travel agencies, and accommodations are working in unison to overcome the difficult period.” The government expects the distribution of 1 million discount coupons for accommodations to help demand for travel rebound and boost domestic consumption for the survival of the tourism industry.

The culture ministry estimates the amount of damage the industry has suffered following the COVID-19 outbreak at about 5.9 trillion won. But some officials from travel agencies are raising skepticism over the government’s rosy prospects, saying the discount coupon program will not be that helpful for them to survive the crisis. “Our internal analysis shows that our participation in the program will bring about a deficit,” an official from a Seoul-based online travel agency said on condition of anonymity.

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The skepticism comes as travel agencies participating in the program are required to shoulder 10,000 won per coupon.

For example, when a 30,000 won discount coupon is issued, the government bears 20,000 won of the cost, while the company shoulders the remaining 10,000 won. Despite the added costs, travel agencies have no choice but to participate in the program as domestic travelers are the only hope for their survival, for now, the official added. According to data issued by the KTO, the number of foreign visitors who traveled to Korea slumped 97.5 percent year-on-year in June due to the pandemic.

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The number of foreign nationals who visited the country came in at 36,943 in June, compared with 1.48 million in the same month last year.

Regarding the issue, a culture ministry official explained, “There are four times as many discount coupons for accommodation over 70,000 won than for those under 70,000 won,” noting that this will lighten the burden of travel agencies. The official added the program is expected to stimulate consumption worth about 567 billion won.

Source: The Korea Times

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