Culture Ministry announces progress on financial aid for tourism sector hit by COVID-19 outbreak

The Ministry of Culture, Sports and Tourism provided an update Tuesday on the progress of efforts to assist the tourism industry as it struggles to cope with the COVID-19 pandemic.

Since February, the ministry has announced 21 different plans to assist the tourism industry.

The government said it tried to reflect the industry’s needs when drawing up the support programs. The ministry said it had received 78 suggestions from the industry and that 59 were reflected in its programs.

“We will further strengthen our communication with the tourism industry and provide support that can quickly resolve the difficulties that they face,” Culture Ministry official Choi Bo-geun said in a statement.

Through one program, the ministry will inject 100 billion won ($82.24 million) in the form of unsecured loans for tourism companies. According to the ministry, from Feb. 19 to April 10, a total of 1,421 companies applied for loans worth 82.85 billion won under the program. So far, 702 businesses have received 37.85 billion won and the ministry expects the 100 billion won earmarked for the loans to run out by mid-May.

In response to complaints that it took too long to receive the special loans, the government has allocated more manpower to the program. On April 9, the Culture Ministry hired an additional 290 people to assist companies applying for special loans.

From Feb. 17 to April 10, the government also allowed 682 businesses to postpone repayment of existing loans, totaling around 153.9 billion won, for a year.

The hotel industry was the primary beneficiary of this program, with 472 hotel business operators having delayed repayments worth around 134.3 billion won so far, the ministry said. The Culture Ministry’s initial plan called for 200 billion won for this program.

The government also began providing around 525 billion won in regular loans last month, with some 61.79 billion won worth of loans issued from March 2 to April 10.

Additionally, the ministry said it would provide money specifically earmarked for labor costs for hotels and travel agencies to prevent layoffs. A total of 4,919 companies have applied for this assistance.

Local governments have been asked to cooperate by cutting taxes for tourism businesses, the government said.

Information on government assistance programs can be found at the ministry’s website (https://www.mcst.go.kr/kor/s_policy/covid19/covid19.jsp) and that of the Korea Tourism Organization (http://www.tourbiz.or.kr). The information is updated weekly.

By Song Seung-hyun (ssh@heraldcorp.com)