Government Considers Allowing Domestic Shared Accommodation

The government is considering institutionalizing urban homestays (shared accommodation), previously only allowed for foreigners, to be available for domestic use as well. To encourage foreign tourists to visit local regions, two super-wide tourism zones connecting gateway cities with tourism resource-rich linked cities will be selected as leading zones, with package support including financial investment, tourism program development, and regulatory improvements.

Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol stated at the first meeting of the “Service Industry Competitiveness Enhancement Task Force (TF)” held on Oct. 2, “We will improve convenience for domestic and foreign tourists in terms of accommodation, transportation, payment, food, and attractions.” He added, “We will prepare measures to improve the promotion system for the accommodation business to enhance the quality of accommodation facilities.” This suggests that excessive regulations that principally prohibit shared accommodation businesses targeting domestic customers in urban areas such as Seoul may be eased. Shared accommodation business is a form of business where spare rooms in ordinary houses are rented to tourists for a fee. It is known that Korea is the only country among the 220 countries where the shared accommodation app Airbnb operates that prohibits domestic use.

Koo pointed out, “The service industry has a large economic ripple effect and accounts for 60% of our economy’s added value and 70% of employment,” but added, “Compared to advanced countries, productivity is only half the level.” He continued, “It is urgent to achieve qualitative growth as a new growth engine for our economy and to revitalize domestic demand and exports through strengthening competitiveness,” and added, “We have newly formed the ‘Service Industry Competitiveness Enhancement TF,’ a ministerial-level consultative body, together with related ministries and economic organizations.”

At the meeting, the Korea Enterprises Federation delivered 33 policy suggestions to the government, including establishing a data-based tourism policy system, expanding regional tourism transportation networks, and improving foreign-unfriendly certification and payment environments, which were discovered from the tourism industry field.

The government responded positively. The Ministry of Culture, Sports and Tourism and the Korea Tourism Organization will revise the Tourism Promotion Act, including reorganizing the tourism industry sector system currently limited to seven industries. They also plan to establish an infrastructure where scattered domestic tourism data can be easily and quickly utilized by anyone. Cooperation with local governments will be strengthened to steadily increase K-pop concert venues, and improvements to the mobile authentication system will be pursued to allow foreigners to easily authenticate themselves and use simple payment services and delivery apps.

Furthermore, the government will fully implement the “Regional Tourism Leading Project (Inbound Tourism Zone Creation Project)” from next year to foster global-level tourism zones outside of Seoul. The plan is to select about two leading zones and use government support as seed money to attract private investment. A detailed implementation roadmap for this will be prepared and announced by the end of the year.

Lastly, the government also presented plans to revitalize domestic tourism on the occasion of the Asia-Pacific Economic Cooperation (APEC) Summit. A tourism service care team will be formed to inspect major tourist sites, and inconveniences for foreign visitors in transportation, accommodation, shopping, and dining will be improved in cooperation with North Gyeongsang Province and Gyeongju City. After the event, they plan to promote Gyeongju City’s symbolism as a historical, cultural, and international-themed school trip destination and pursue hosting various international events.