Registration Standards for Travel Industry Lowered and Consumer Protection Strengthened... Tourism Promotion Act Amendment Bill Proposed

[Asia Economy Reporter Choi Dong-hyun] The registered capital requirement for general travel agencies will be lowered from 100 million KRW to 50 million KRW. Additionally, the industry classification will change from general travel agencies to comprehensive travel agencies, and from overseas travel agencies to domestic and overseas travel agencies, thereby expanding the scope of business. This aims to broaden the operational scope of tourism and travel companies struggling due to the impact of the novel coronavirus disease (COVID-19) and seek ways to revitalize the industry.

The Ministry of Culture, Sports and Tourism announced on the 27th that it will publicly notify the amendment of the Enforcement Decree and Enforcement Rules of the Tourism Promotion Act containing these details.

According to the current Tourism Promotion Act, travel agencies are classified by registered capital into general travel agencies for both foreigners and Koreans (100 million KRW), overseas travel agencies for Koreans (30 million KRW), and domestic travel agencies for Koreans (15 million KRW). However, once the amendment is implemented, general travel agencies will be changed to comprehensive travel agencies with a lowered registered capital requirement of 50 million KRW. Also, currently, to register both overseas and domestic travel agencies, a total of 45 million KRW must be paid, including 30 million KRW for overseas travel agency registration capital and 15 million KRW for domestic travel agency registration capital. Going forward, with the reclassification of overseas travel agencies to domestic and overseas travel agencies, only the 30 million KRW registration capital for the domestic and overseas travel agency will be required. A Ministry of Culture, Sports and Tourism official stated, "As overseas travel has become difficult due to the prolonged COVID-19 pandemic, we are opening domestic travel opportunities to overseas travel agencies," adding, "Since the registered capital requirement is also lowered, it is expected to provide some relief to the travel industry facing difficulties."

The Ministry will also amend the Enforcement Rules of the Tourism Promotion Act to resolve the supply-demand imbalance of tourist guides and strengthen their capabilities. A temporary tourist guide certificate valid for three years will be introduced, exempting some written exam parts in the qualification tests for tourist guides in certain languages such as Thai and Vietnamese, which have been somewhat difficult to supply. However, with the introduction of this temporary certificate, the passing scores for some foreign languages like Thai and Vietnamese, which had been lowered to maintain supply-demand balance, will be raised to the level of other foreign languages. The evaluation method for the Korean history subject in the qualification exam will also be replaced from the existing written test to the ‘Korean History Proficiency Test’ conducted by the National Institute of Korean History.

Furthermore, in accordance with the partial amendment of the Tourism Promotion Act passed by the 20th National Assembly, the Enforcement Rules will be revised to strengthen disqualification criteria for travel agencies. Practical regulatory provisions will be established to allow local governments to verify whether applicants for travel agency registration, changes, or succession have disqualifications such as fraud, embezzlement, or breach of trust under criminal law. This aims to prevent individuals sentenced to imprisonment or higher from entering the travel industry in advance, thereby reducing the possibility of consumer damage related to travel contracts.

Shin Yong-sik, Director of the Tourism Infrastructure Division at the Ministry of Culture, Sports and Tourism, said, “This amendment will somewhat ease entry into the travel industry and resolve the supply-demand imbalance of tourist guides, providing some help to the industry struggling due to COVID-19,” adding, “Moreover, it holds significance as preparation for the post-COVID era.”