Lotte plans visit to N.K. to push for tourism deal

Posted on : 2007-03-19 14:30 KST Modified on : 2019-10-19 20:29 KST
Visit part of Lotte Tour’s battle with Hyundai Asan over who will lead Gaeseong tours

Sources confirmed on March 18 that Lotte Tour is trying to visit with North Korean authorities next week, part of the tourist company’s ongoing fight with Hyundai Asan over the business rights for the tours of Gaeseong (Kaesong) in North Korea, which was the capital of the Goryeo Dynasty (918-1392 AD).

The management of Lotte Tours, including its chairman Kim Ki-byung, has submitted applications for a March 25-31 visit to North Korea through the Ministry of Unification’s Web site. On the application, Lotte Tour wrote that the purpose of its visit is to "discuss the Gaeseong historical site tours."

Lotte Tour is an affiliate of Lotte Group, one of Korea’s large-scale conglomerates.

An officer of Lotte Tour who wished to remain unidentified said, "We want to bring our professional tour operation know-how into the Gaeseong tour business, if opportunity allows."

The Ministry is set to decide whether to grant approval for the visit in a matter of days.

Lotte Tour had already requested the Ministry to allow them to visit the North in early July last year, but the company withdrew their application because of worsened North-South relations following Pyongyang’s missle tests early that month.

Observers cite several reasons Lotte Tour would make its second attempt to visit the North at this time.

First, North Korean authorities recently denied a January 2007 South Korean news report which said that the North had made up its mind to give the Gaeseong tour rights to Hyundai Asan.

Some South Korean government officials cautiously brought up the proposal that Lotte Tour and Hyundai Asan may seek a joint venture for the tour rights, citing that the North authorities showed reluctance to make a deal with Hyundai Asan. Experts say that this situation has given Lotte Tour more motivation to try again to forge a deal with the North.

Meanwhile, the South Korean government continues to hold the attitude that Hyundai Asan is entitled to the tour rights based on the following facts: Hyundai Asan had made a deal with the North for the rights in 2000; Hyun Jung-eun, chairwoman of Hyundai Asan, met with North Korean leader Kim Jong-il in 2005; and Hyundai Asan has already ran three test tours to Gaeseong. Under current law, the government has the right to block a joint venture between a South Korean business and the North when it is likely to cause severe competition or legal fighting between businesses in the South.

In addition, the Hyundai Asan-North Korea relationship was recently put under strain when Pyongyang-favored Kim Yun-kyu, the ex-vice chairman of Hyundai Asan, was expelled from the company in August 2005 for allegations of illicit financial activities. When the relationship between Hyundai Asan and Pyongyang worsened, North Korea’s Chosun Asia-Pacific Peace Committee announced it had never granted any exclusive rights for the Gaeseong tours and hinted at being interested in other South Korean companies to bid on these rights, including Lotte Tour.

Hyundai Asan currently runs tours at North Korea’s Mt. Geumgang (Kumkang) resort.

Please direct questions or comments to [englishhani@hani.co.kr]

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