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[Editorial] Attracting Rich Foreign Tourists

Posted November. 21, 2009 09:39,   


The Culture and Tourism Ministry announced yesterday measures to raise the competitiveness of the domestic tourism industry, including changing the observance of national holidays and visa-free entry for Chinese tourists. President Lee Myung-bak said, “The number (of foreign tourists) is important but quality also needs to be raised.” The measures, however, fail to mention raising the added value of tourism services such as in the medical tourism and international convention sectors.

To overcome the 1997 Asian financial crisis, Thailand invested in medical tourism. The country in 2007 drew 1.54 million medical tourists and 1.6 trillion won (1.38 billion U.S. dollars) in revenue. This was possible because the Southeast Asian country allowed for-profit hospitals and opened up its medical market. Despite its high level of technical competitiveness, Korea’s medical industry is lagging behind due to excessive regulations. Seoul’s plan released Thursday to expand new growth engines through deregulation say nothing on medical sector deregulation, either. The government still views as evil the profit motive in the public sectors of education and health care. This view is both anachronistic and hypocritical.

Medical school is popular because many want the security and prestige of a high-paying career. Public education has long lost ground to private education, which has gained competitiveness through seeking profits. Under these circumstances, the government should allow for-profit hospitals and open up its education market to draw more foreigners and stem the outflow of dollars. This will truly serve the national interest. In other words, when the service industry significantly grows, the country can expand the basis of domestic demand and boost its economic fundamentals. By doing so, foreign tourists with deep pockets will come to Korea.

The government should find raise the added value of the medical industry while maintaining the industry’s public function. By allowing for-profit entities to enter the sector, the government can better support the socially vulnerable financially. Therefore, for-profit clinics of dermatology and plastic surgery should be the first ones allowed.

To attract rich foreign tourists, quality lodging and leisure facilities are needed. In 2002, Macau’s per capita income was 14,000 dollars, similar to that of Jeju (12,000 dollars). The figure for the Chinese city has since soared to 36,500 dollars in 2007 thanks to a flood of tourists, while that of Jeju has dropped to 10,000 dollars. Macau has expanded high-end hotels and casinos to draw more foreign tourists.

President Lee often says, “Job creation doesn’t follow economic growth. That is the problem.” The tourism industry can solve this problem, however. To do so, policymakers must first take a flexible approach via deregulation. The Culture Ministry has presented measures to improve mid and low-level lodging facilities. Much more needs to be done, however, to attract high-end foreign tourists.