A Study on the North-East Asian Tour using Railway Network. KORAIL, Deajeon, Korea

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1 A Study on the North-East Asian Tour using Railway Network 1 Yang, You Kyung, 2 Park, Sun Min, Park, Eun Kyung KORAIL, Deajeon, Korea Abstract Recently, the cooperation between railway operators has been increased to maximize the efficiency of Asian railway network, and International tourists, especially tourists to Asian region grow rapidly. But the cooperation in the rail tourism and leisure field has not yet been promoted. Therefore, this study was designed to propose a development strategy for rail tourism industry in Asia. It discusses mainly 3 Northeast Asian countries, Korea, China and Japan, which are very important area as the 3 rd world trade market and high rate of personal exchange. Korea-Japan joint railroad ticket, Korea-China joint railroad ticket, and Rail-Ferry connection tickets have been developed to provide Asian tourists convenience, but it was not widely used. The poor performance of these product resulted from the feeble cooperation system and efforts of Northeast Asian tourism industry. It is the time when the strategy plan for Asian tourism industry is needed. The most important thing is to convince world tourists that Northeast Asia is a single tour zone as Europe and Southeast Asia recognized. These countries are not known as one category of tour region because of the difficulty of free and convenient movement within three countries. Northeast Asian countries are geographically separated by oceans, but three countries agreed to build a stronger partnership to make Northeast Asia recognized as a one tour zone. For example, the operating plan of Triangle Shuttle Air Services connecting 3 big cities of Northeast Asia was concreted in If the triangle shuttle air service between Korea, China and Japan can perform its role of connecting a country to another, it is important to provide free movement inside the countries in order to show its attainability as a single tour zone. To attain this goal, it is necessary to develop joint transport products to travel three countries and close cooperation between transport industries. To make Northeast Asia recognized as a one tour zone, traffic network to comply with various needs and safe movement of low fair has to be provided. The development and publicity of 3 country rail tour service will have an important role to make Northeast tour zone. This study suggests the development of 3 country rail tour service, especially the development of Asian Rail Pass like Eurail pass and InterRail pass. The development of Asian rail pass can be an effective method to attract many tourists both inside and outside of Asia. Three-country rail tour service will proceed rapidly by an agreement and cooperation of related organizations when there are common concerns. The development of Asian rail pass has to get active organization for marketing and promotion different from former joint tickets. This study will publicize the necessity of joint rail tour product in Asia. 1. Introduction Recently, the cooperation between railway operators has been increased to maximize the efficiency of Asian railway network. In October 2006, 1st Asian Railway Summit was held in Seoul, Korea, and in November 2006, the Trans-Asian Railway (TAR) network was signed at UNESCAP ministerial transport conference held in Busan, Korea. But the cooperation in the rail tourism and leisure fields has not yet been promoted. Therefore, this study is intended to propose a development strategy for Asian rail tourism industry. It is the time when the strategic plan for new profit is desperately needed by cooperating in tourism and leisure fields by railway tour agencies, developing joint tour products of Asian countries which are connected by railway trips and tours, and creating new tour demands. 1

2 UN World Tourism Organization (WTO) announces approximately 400 million, 1 out of 4, people will visit Asia and the Pacific region by year International tourists to Asia region grow but it is not invigorated by rail specialized tour products. Therefore, this study presents a cooperation plan of railway tour between Asian countries and the development of international railway tour products which provide Asian rail tour service. Main research activities are centered on the development of Asian rail tour products especially, Asian rail pass. It discusses mainly 3 Northeast Asian countries, Korea-China-Japan, which are very important area as the 3 rd world trade market and high personal exchanges. It will be easy tasks to relate with south-east Asia which is already recognized as one tourist region if the rail tour products are developed in Northeast Asia and can be thought global rail services in cooperation with Europe and Russian railways. The development and operation of Asian rail tour service will lead to the increase of rail tour demand, long-term benefits and the promotion of Asia rail cooperation. Also this service will have a role for the connection of Asia rail missing link project and the unification of Asia railway. This study will publicize the necessity of rail tour service development. 2. Basic study on the North-East Asian Rail Tour As a basic study on the Northeast Asian rail tour, this chapter outlined the necessity of cooperation among Northeast Asian countries by studying the scale of world tourism market and the present status of tourism cooperation in Northeast Asia. The status of Northeast Asian Tourism Market Tourism Highlights 2007 edition of UNWTO summarizes that international tourist arrivals in Northeast Asia were 94million in 2006, which is 11.1% of international tourist arrivals and 56.2% of Asia and the Pacific area. And, it also shows the specific percentages of each country in Northeast Asia, that is China 49.6million(52.8%), Hong Kong(China) 15.8million(16.8%), Macao(China) 10.7million(11.4%), Japan 7.3million(7.8%), South Korea 6.2million(6.6%), Taiwan(pr. of China) 3.5million(3.7%) in high-ranked order. International tourist arrivals in the Northeast Asia region had recorded 8.3% of average growth rate over the period , compared to the world average of 3.6%, which is very high growth rate. When we consider the fact that intraregional travelers account for over 80% of international tourists, and the fact that South Korea, China, and Japan are in the international tourism top ten spenders, the high growth of international travel arrivals in Northeast Asia is mainly caused by the increase of tourism among Northeast Asian countries. Also, data released by KNTO(Korea National Tourism Organization), CNTA(Chinese National Tourism Organization),and JNTO(Japanese National Tourist Organization) shows that the majority of international tourists have been generated from three countries. Northeast Asian countries are the largest foreign tourist market to each other, and the market of these countries is expected to enlarge its scale continuously. On the other hand, the number of long-haul travelers who visit Northeast Asia is expected to increase. UNWTO Tourism 2020 Vision forecasts that the ratio between intraregional and longhaul travel will shift from around 82:18 in 1995 to 76:24 in From this figures, it is plain to see that there is the need for tourism industries in Northeast Asian countries to cooperate with each other. If it is possible to meet the growing number of long-haul travelers from Americas and Europe and absorb intraregional travelers into inside the region, Northeast Asia will be the best tourism destination superior to Americas and Europe. To achieve this, it is necessary for three countries in Northeast Asia to keep close cooperation. 2

3 International Tourist Arrivals Market Share (millions) (%) World Asia and the Pacific % North-East Asia % 56.2% 100 China % 29.7% 52.8% Hong Kong(China) % 9.4% 16.8% Japan % 4.4% 7.8% Korea % 3.7% 6.6% Macao(China) % 6.4% 11.4% Taiwan % 2.1% 3.7% South-East Asia % 32.2% - Oceania % 6.3% - South Asia % 5.3% - Europe % - - Americas % - - Africa % - - Middle East % - - Table 1: International Tourist Arrivals by regions The Present Status of Tourism Cooperation in Northeast Asia Although Korea, China, and Japan are ranked high in exchange of tourist each other, it is hard to say that there are active efforts for tourism cooperation among three countries. The Association of Tourism Promotion was established between South Korea and Japan in 1986, between South Korea and China in 1995, and operated by government officials and tourism industry representatives of both countries. But, it was a kind of regular cooperation between countries, so it had limits to look for ways of efficient cooperation. Fortunately, the cooperation among these three countries is being strengthened recently to promote intraregional travel, and even to absorb Asian long-haul travelers willing to go out of Asia region. In 2006, the fundamental policy between Korea and Japan governments was determined at the 1 st Tourism Minister s Meeting held in Japan. Following the Meeting, the 1 st Korea-Japan Tourism Cooperation Conference (2006) was held under the Korea FKI (Federation of Korean Industries) and Nihon Keidanren(Japan Business Federation). Both sides agreed to build a stronger Korea-Japan-China private partnership for making Northeast Asian Tourism Zone. And the agreement of its 2 nd conference (2007) includes the specific scheme about the Triangle Shuttle Air Services connecting 3 big cities of Northeast Asia (Gimpo-Haneda, Gimpo-Hongqiao, Haneda-Hongqiao). The Necessity of Improving Traffic networks between 3 countries For developing the tourism industry in North-East Asia, the most important purpose is to convince that people it is one tourist zone similar to Europe and South-East Asia. For this, the major premise is expanding and improving traffic networks between Korea, China and Japan. As mentioned above, if the triangle shuttle air service between Korea, China and Japan can perform its role properly, it is important to allow free movement inside the countries in order to show its attainability as a tourist zone. To attain this goal, it is necessary to develop joint transport products to travel in three countries and close cooperation between transport industries. 3

4 3. The Status of North-East Asian Rail Tour and the Prospect The Present condition of Rail Tour cooperation Korea-Japan joint railroad ticket: on operation Korea-Japan run joint tickets, Korea-Japan joint railroad ticket (Korea railroad Ship Japan railroad), in Korea named Korea-Japan joint railroad ticket, in Japan named Japan-Korea joint railroad ticket. Korea-Japan joint railroad ticket started running to meet the transportation demands of tourists from Japan because of the 1988 Seoul Olympic game. At the beginning, only JR West and JR Kyushu participated but before 1990, the rest of JR companies (JR East, JR Central, JR Hokkaido, JR Shikoku) get involved. In spite of the fact it was guaranteed by mania customers in Japan, JR Hokkaido, JR Central terminated their services in 2006 because of constant reduction of sales figure. Rail Ferry Rail (KTX) (Adjustant ferry) (Shinkansen, Second line) Route Seoul-Busan Busan-Shimonoseki Shimonoseki-Destination Deajeon-Busan Dong Deagu-Busan Busan-Fukuoka Fukuoka-Destination Note 1 : The price is various according to departure and destination Note 2 : In Japan, 2 times stopover is allowed Table 2: Travel Route of Korea-Japan Joint Railroad Ticket Rail Ferry Rail (Shinkansen, Second line) (Beetle, Sparrow) (KTX, Second line) Route Departue-Shimonoseki Shimonoseki-Busan Busan-(Kyungju)-Seoul Departure-Fukuoka Fukuoka-Busan Note 1 : The price is various according to departure Note 2 : In Korea, 2 times stopover is allowed Note 3 : Ferry could be not included Table 3: Travel Route of Japan-Korea Joint Railroad Ticket Each transport operation companies (KORAIL, JRs, Pukwan Ferry, Kampu Ferry, JR Kyushu Jet Ferry) specify the service routes and the prices for the joint ticket. That said, there are many restrictions to use the ticket compare with rail pass. The price is confirmed by customers choice in all sections which have different prices. Operation companies give discount services from 9~30%. Approximately 4,500 customers used Korea-Japan joint railroad ticket a year. Korea-China joint railroad ticket: provisional suspension Korea-China joint railroad ticket composed by services provided by Korea National Railroad (Pusan, Dong Daegu, Daejeon, Kyoungju Seoul), Chinese Railways (Tianjin Beijing, Beijing Shenyang.Shanghai, Shanghai Hangzhou) and Jinchon Ferry (Incheon Tianjin). This Ticket service started in year 2000 but has been canceled temporarily by the bankruptcy of Chinese cooperate agency. 4

5 The present condition of joint railroad ticket is discouraged, though 3 countries of Northeast Asia try to vitalize it. Because of the limitation of route, failure of marketing strategy, less incentive, lack of general sales agents and distributors. Especially the Incheon Tianjin ferry line, which takes 18 hours per one-way trip. So it is difficult to promote its commercialization. Cheering Train to the Beijing Olympics: will run The two Koreas agreed to transport the joint cheering team to the Beijing Olympics using the Gyeongui railway across the western side of the demilitarized zone during the 2 nd Inter-Korean Summit held in Oct South Korea, North Korea and China will cooperate to run this train. This is a remarkable achievement, because train goes from South Korea to China via North Korea for the first time after Korean War. It will extend the mutual cooperation between three countries and increase attainability of the train operation using TKR & TCR, which make it easy to attain private capital for the operation of international train in this region. The Beijing Olympic Cheering Train is expected to be developed into the regular international rail products of Northeast Asia. It is an important opportunity for the two Koreas and China to promote personal exchange through international passenger trains. If there is a close cooperation and will among the 3 countries, it will be a successful business. [1] The Limitation and Prospect of North-East Asia Rail tour Cooperation The main reasons of the poor result of rail tour products are regarded as feeble cooperation system and efforts of Northeast Asian tourism industry. Conversely, the main reasons of week cooperation system are the limitation of rail operation between three countries. Rail can t be the main transportation because of the geographical separation by ocean and the political situation of two Koreas. However, 3 countries try to revitalize passenger transport service ties to tourism recently as it is mentioned at chapter 2 of this paper. Korea-China-Japan signed the project of Triangle Shuttle Air Services at the Tourism Minister s Meeting 2007 and the realization schemes were discussed at the 2 nd Tourism Cooperation Conference As the progress of Triangle Shuttle Air Service among 3 countries, new rail-flight tourist products can be developed and Korea-China regular train service can be concreted following Beijing Olympic Cheering train. In Korea-Japan connection, the service of ferries (Kobee, Bettle ect.) constantly increases and is getting competitive power in market place. Also, it shows possibility and necessity of Northeast Asia rail unification by sustainable discussions about a Korea-Japan Submarine Tunnel, a Korea-China Submarine Tunnel. Now the Northeast Asia rail is segmented but there is certain possibility of unification. Though railway infrastructures are not completed among 3 countries, it is still possible to develop rail tour products. 4. Development and revitalization plan of Northeast rail tour service New Rail Tour Services for a single tour zone Austria, Germany, and Switzerland of Europe have similar language and life style, and they got mutual tour network by the connection of between rail and road network. Belgium, Netherland, and Luxemburg have cooperation promotions by vicinity location and various cultures. [2] Northeast three countries have mutual economic basis and cultural basis (Confucianism, Buddhism and cultural area of Chinese character), but these three countries aren t known as one category of tour region because of the difficulty of free and convenient movement within three countries. The development and publicity of three-country rail tour service will have an important role to make one tour zone of Northeast Asia. 5

6 To develop Northeast Asian rail tour service, it needs to make a rail tour discussion group between Korea, China, and Japan. By building a network of rail tour industry, new tour products can be developed and tour demands can be produced. It is possible to have cooperative marketing plan about Korea-China border tour rail service, new train service among Busan~Pyongyang~Beijing, specialized train service (for example, night view train, wine train, ski train), and Asian rail pass products like Eurail pass. All Asian region (including Russia, Mongolia, and Southeast Asia) can be a one tour zone. The Necessity of Asian rail pass To make Northeast Asia recognized as a one tour zone, traffic network to comply with various needs (short visit, long stay, and local tourists) and safe movement of low fair has to be provided. Eurail pass and Inter rail pass are good cases. European 13 countries rail company made Eurail Community cooperation institute, and they began to sell Eurail pass in Eurail pass was developed to expand European rail tour market according to the increase of Europe travel of North American tourists. The first Eurail pass provided unlimited usage of 13 countries first class trains for 2 months, and the service area of this pass (now Eurail Global Pass) expanded to 20 countries and the period of this pass was changed to 3 months from 15 days. Also its product range was increased by including new passes and country combination. 5,000 Eurail pass were sold out in the first year, but 445,813 pass were sold out in year 2006 by various price system and tour programs. Eurail pass was sold to non-european only, InterRail pass was developed in 1972 for European inhabitants. First InterRail pass was for less than 21 year-old young tourists, and tourists can travel European 21 countries for 1 month using 2 nd class train. Now tourists can travel 34 countries, but the basic concept maximum travel days and countries for the lowest possible price didn t change. More than 7 million tourists traveled using InterRail service. Northeast Asian area is one of the main worldwide economic zones and attractive tour region. But it needs time and money to visit all three countries (Korea, China, and Japan) at one time. Like Eurail pass and InterRail pass, the development of Asian rail pass can be an effective method to attract many tourists and many tourists can travel easily Korea, China, and Japan. Asian rail pass can get many intraregional tourists as well as long-haul travelers from Europe and America. The number of rail passengers from Asian 3 countries has more than 50 % of that of total Asian passengers. The operation of Asian rail pass for only three countries has no problem in the early period. Development plan of Asian rail pass Korea-Japan joint railroad ticket, Korea-China joint railroad ticket, and Rail-ship connection tickets have already developed to provide Asian tourists convenience, but it was not widely used. There can be many reasons, but most of all the lack of international public relations is the main reason. The development of an Asian rail pass has to get active organization for marketing and promotion different from former joint tickets. These marketing and promotions will be a main item of rail tour discussion group mentioned before, and Asian rail pass group (tentative name) will be developed to Northeast Asian rail tour discussion group. In Europe, Eurail Group G.I.E is responsible for the management, marketing and development for rail pass products both inside and outside of Europe. Among Eurail passes, Regional pass developed in year 2005 and National pass developed in year 2006 are very profitable. These passes were developed according to the result of market research which pointed the fact tourists are in favor of short travel than long travel these days. Eurail group has an agreement with Infosurv (American market research institute) to do marketing research in North America. 6

7 Asian rail pass group has to develop various products through collaborative research. This group has to provide rail, airline and ship service to tourists connecting three countries (Korea, China and Japan) by cooperation with ship and airline companies. Also, this group has to provide various affordable routes so that tourists can select their routes even though tourists can use many transportation methods using Asian rail pass. And tourists can easily select their international tour service through specific schedule. For example, there can be a rail pass tour service such as a three-country (Korea, China and Japan) temple stay tour to get eastern attractive view points and three-country martial arts (Taekwondo, Judo, Kongfu) experience tour to get more western tourists. To develop these kinds of tour service, there has to be continuous efforts for tour resources search and sustainable development with close cooperation among three-country s tour companies or discussion group for Northeast Asia tour service. Also, this discussion group will accelerate three-country governments discussion to eliminate obstacles of tour interchange plan. As one of the operation plan, when Internet portal site for rail tour information which is for the publicity of rail tour business to worldwide tourists will be operated collaboratively, this can get more tour demand to America and Europe. Also regular International exhibition for rail tour service (tentative name) will be possible and this exhibition will lead to the publicity of rail tour products. 5. Conclusion This study proposed Northeast Asian three-country (Korea, China and Japan) rail-based tour service, especially the development of Asian rail pass. Three-country rail tour service will proceed rapidly by an agreement and cooperation of related organizations (three-country rail operation companies, subsidiary companies of rail operation companies related to tour service) when there are common concerns. The development and operation of three-country rail tour service will promote the revitalization of Northeast Asian tour plan, and this three-country tour service will spread out to Southeast Asia, Russia, and Europe, so it is possible to have a global rail tour. The development and operation of Asian rail tour service will lead to the increase of rail tour demand, long-term benefits and the promotion of Asia rail cooperation. Also this service will have a role for the connection of Asia rail missing link project and the unification of Asia railway. This study will publicize the necessity of rail tour service development. References [1] Kim, Seon-ho. International Passenger Train Service in the Corridor between Seoul and Beijing, Hannam Univ, p. 96, (2004)\ [2] Patrick Lavery. "European Destination Marketing", Tourism Marketing and Management Handbook ed. by Stephen F. Witt and Luiz Mountinho, New York: Prentice Hall, pp , (1989) 7

Financing for Regional Economic Integration in NEA: Infrastruct ure, Resources and Capital Mobilization Nihon Univ, Tokyo May 11-12, 2011

Financing for Regional Economic Integration in NEA: Infrastruct ure, Resources and Capital Mobilization Nihon Univ, Tokyo May 11-12, 2011 1 2 3 4 5 6 Background Survey on past research Issues and basic