The Korean government is expanding support for the tourism industry as concerns grow over a slowdown in travel demand triggered by high oil prices. To ease the industry's liquidity strain, authorities will increase loans from the Tourism Promotion and Development Fund and have established a separate loan program for early-stage tourism companies.
According to the Ministry of Culture, Sports and Tourism on Wednesday, the government will inject an additional 100 billion won ($73 million) in the first half, out of the 200 billion won in tourism fund loans allocated through the supplementary budget. As a result, tourism fund loans for the first half of this year will expand from the initial 337.5 billion won to 437.5 billion won.
The ministry determined that the tourism industry is among the sectors hit first by the recent rise in international oil prices stemming from the Middle East conflict, and decided to accelerate liquidity support for the industry. Officials concluded that travel demand is increasingly likely to contract as airfare and travel cost burdens grow heavier.
The supplementary budget also newly includes dedicated loan support for tourism startups. The government has separately earmarked 30 billion won for "Tourism Business Startup Loans" to support early-stage tourism enterprises. Eligible recipients are small and medium-sized tourism businesses that have been in operation for less than seven years. The program provides up to 3 billion won for new construction, up to 1 billion won for renovations and up to 300 million won for operating funds. Applications can be submitted through the Tourism Fund Loan Support Center.
The ministry also plans to expand loan support in the second half. The original 300 billion won will be supplemented by the remaining 70 billion won from the supplementary budget, bringing the total to 370 billion won.
