Asia-Pacific Economic Cooperation building in BusanSEOUL, South Korea — Just as South Korea was taking a few steps forward in realizing its ambition to become a global tourist destination, last month's saber-rattling by nuclear-armed North Korea threatened to set back those aspirations.

South Korea's conundrum could not have been revealed more clearly in November. The month started off with Seoul basking in the world spotlight as host of the Group of 20 summit, affirming the country's status as an emerging economic force in Asia.

But by month's end, that status had been overshadowed once again when North Korea opened fire on a South Korean island. The escalating tensions reminded the world how fragile relations remain on this divided peninsula.

"When North Korea threatens to turn Seoul into a sea of fire or sinks a ship, it's in the back of people's minds" when they are thinking about booking a trip, said tour operator Walter Keats, president of Asia Pacific Travel.

In March, North Korea reportedly torpedoed a South Korean warship, killing 46 sailors (North Korea still disputes the claims). And in June, North Korea, reportedly frustrated with ongoing propaganda campaigns out of the South, threatened to turn Seoul into a "sea of flame," according to news reports.

In the most recent incident, artillery exchange on Nov. 23 resulted in the deaths of two South Korean marines and two civilians on the island of Yeonpyeong.

"If they would have peace in the peninsula, I think it would allow a lot of things to go more smoothly," Keats said. "It's not something that's a great promotional statement for tourism."

Between sharing a peninsula with North Korea, competing with China and Japan for attention and the prospect of a long-haul flight to get there, South Korea has its fair share of obstacles as far as vacation destinations go.

Yet despite the odds, the buzz about South Korea keeps growing louder as an increasing number of Americans come here to experience bustling Seoul, relax in resort areas, explore ancient temples and, yes, visit the Demilitarized Zone and perhaps even venture into North Korea. (See a slideshow of photos from Korea here.) 
Bruce Lazarus, vice president of marketing for Remote Lands Inc., a luxury operator, said he sees Seoul as "the new Tokyo."

Alluding to Seoul's designation by the International Council of Societies of Industrial Design as the World Design Capital, a biennially bestowed honor, Lazarus said, "It's the 2010 design capital of the world. It has a fantastic emerging contemporary art scene, music scene. And like Tokyo, they're a little behind closed doors."

Lazarus said that two years ago, Remote Lands didn't have any clients booking Korea. Since then, the company has assembled at least six high-end bookings, often including bespoke trips into North Korea, which recently relaxed restrictions on visitors.

A site for sophisticated travelers

"It's an incredible opportunity to see both sides of the coin," he said. "South Korea is an economically booming place, [and] culturally it's booming. Our clients are well traveled, and many of them have been [to Asia] and they come to us seeking something new. I would call it a sophisticated choice for a traveler."

Entrance to a royal tomb at GyeongjuThe U.S. is Korea's third-largest inbound market, and while most of those visitors are still primarily business travelers or people visiting friends and family, the Korea Tourism Organization said that 320,000 American leisure travelers visited South Korea in the first half of 2010, a 6.7% increase over the first half of 2009.

The U.S. Office of Travel and Tourism Industries reports that South Korea is the fourth most visited East Asian destination by U.S. citizens after Japan, mainland China and Hong Kong, and its market share is growing.

In 2008, 608,000 Americans traveled to South Korea, accounting for 9.5% of all American travelers to Asia. Last year, that number grew 10.3%, to 652,000, while many other Asian destinations saw a year-over-year decrease in visitors.

To be sure, South Korea has a long way to go to catch up with other Asian countries in terms of tourism.

For instance, the destination doesn't represent big annual sales figures for FIT operator Travel Bound; it hovers around $100,000, whereas China, Hong Kong and Japan bring in annual sales of between $400,000 and $700,000.

But South Korea has had the highest growth in bookings for 2010 over 2009 among all Asia destinations. Travel Bound's South Korea bookings increased 46.8% in 2010, while China jumped 35.8%, Japan grew 19.5% and Hong Kong increased 11.8%.

Hotel development plans

At the same time, demand is starting to put pressure on supply. In early November, as South Korea was preparing to host the G-20 summit, the English-language newspaper the Korea Herald reported that Minister of Culture, Sports and Tourism Yu In-chon revealed a plan to boost the number of hotel rooms in this city to 30,000 by 2012.

He said Seoul hotels were reporting an 85% to 90% occupancy rate and were almost fully booked until the end of the year, which he worried could lead to an accommodation shortfall as visitation to Seoul increases.

Jagalchi fish marketKorea's growth in popularity is being fueled by several factors converging at once, from its growing importance as the world's 15th largest economy with the success of major global corporations such as LG, Samsung and Hyundai, to the diffusion of Korean culture around the world in the form of everything from barbecue to movies and "K-pop," or Korean pop music.

Another draw is airlift, with the country's two main carriers, Korean Air and Asiana Airlines, offering improved and more attractively priced international air connections to Asia through Seoul.

"Popularity has increased due to its being a great stopover destination on long-haul trips," said Wendy Wu, founder of Wendy Wu Tours, an Asia specialist operator that launched in the U.S. this year. Wu said she has seen a 20% increase in the number of passengers visiting Korea, though the majority have been for short stays rather than longer tours.

South Korea is hoping that despite its challenges, it can attract 10 million international tourists annually by 2012. As part of that strategy, the KTO this year launched a new campaign message, "Korea, Be Inspired," to boost leisure visits from the U.S. The campaign includes advertising on TV, in travel magazines and even on screens in New York's Times Square.

Beyond Seoul
About 80% of U.S. travelers visit Seoul, according to the KTO, and thus the organization is actively trying to promote destinations beyond this city. In a recent interview, Min Hong Min, executive director of the KTO, offered five alternative experiences to Seoul: Jeju Island, medical tourism, shopping, a temple stay and the Demilitarized Zone.

But the reality remains that "most Americans are going to visit Seoul, and if they're lucky, they're going to Gyeongju," Keats said. "A lot of it is just ignorance."

He said a common misconception about South Korea is that "there isn't as much to see there" because people think that after the Korean War, "there was a hell of a lot of destruction."

Rock pagodas atBulguksa temple in GyeongjuLast month, most of a four-day press trip to South Korea hosted by the KTO took place outside of Seoul, consisting of visits to the volcanic island of Jeju off the southern tip of the Korean peninsula; Korea's second-largest city, Busan; and the historical city of Gyeongju, which was the capital of the Silla Kingdom during the dynasty's 1,000-year reign (see Michelle Baran's first-person accounts of the trip here). 

While Seoul is certainly a worthy attraction unto itself, there is no shortage of interesting natural, historical and cultural experiences to be had in the rest of the country.

In fact, nine natural attractions on Jeju were recently added to Unesco's list of world geoparks, including Mount Halla, Cheonjiyeon Waterfall and the lava dome at Mount Sanbang. The island is hoping the classification will aid in both preservation and promotion of the sites.

The attraction of South Korea as a destination is augmented by the fact that its tourism infrastructure is well developed. Many of the hotels and resort properties meet upscale Western standards, whether they are Korean hotels, like the resorts on Jeju Island such as Hotel Lotte Jeju and the Shilla Jeju, or Western chains like the Westin in Busan or the Hilton in Gyeongju.

New hoteliers are entering the market, as well. The luxury group Banyan Hotels and Resorts opened its first South Korea property, the Banyan Tree Club & Spa Seoul, in June.

As for transportation, getting around the country has been facilitated by easy-to-follow roads, a high-speed rail system and convenient domestic air connections.

Most important, South Korea possesses key elements of an emotional destination: interesting and exotic cuisine, unique entertainment such as karaoke and variety shows, a culture of relaxation in its sauna-filled spas, striking scenery and history that ties together centuries of interaction with China, Japan, Mongolia and Russia.

As a consequence, said Wendy Wu, "South Korea is becoming increasingly popular as travelers become aware of the different areas and experiences available."

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