Jeju Shinhwa World to spend $760 mn to restore vigor

South Korea’s largest resort complex Jeju Shinhwa World, located in the country’s top tourist destination, is preparing to restore its vigor with new condominiums and shopping malls, for which it earmarked 1 trillion won ($760 million).

Jeju Shinhwa World, wholly owned by Hong Kong-based Landing International, opened on Jeju Island in 2018, into which 2.1 trillion won had been injected.

But it occupies just half of the 2.5-million-square-meter land owned by the resort, with the other half left empty.

It is located within the Shinhwa Historic Park in Seogwipo, southern Jeju Island, at the southern tip of the Korean Peninsula.

Jeju Island recently gave the green light to build condominiums and commercial facilities on the other half of the land owned by the resort complex .

With Chinese and other foreign tourists in mind, Jeju Shinhwa World opened a casino, along with 2,000-room accommodations and recreational facilities such as themed and water parks, as well as premium outlet stores.  

But it suffered losses from the first year of its business. Coupled with COVID-19, it took a hit from China’s ban on the imports of South Korean products in retaliation of Seoul’s announcement in 2016 to deploy a US Terminal High Altitude Area Defense System (THAAD) in the country.

LOCAL CUSTOMERS-ORIENTED

To survive the slump, it is now rewriting strategies to cater to local and corporate customers.

“We studied what Korean customers like and drew up new strategies in all areas, including accommodation, leisure, food and beverage,” said Sam Ang in charge of Jeju Shinhwa World.

It also put efforts to woo corporate customers as a platform for meetings, incentives, conferences and exhibitions (MICE) tourism. Last year, a total of 410 MICE events took place at Jeju Shinhwa World, up from 134 events in 2018.

Under the new development, the resort complex will open a large supermarket and other retail stores by the end of 2025. It targets residents in the nearby English Education City, which hosts English language education centers and foreign educational institutes.

Most of the country's large retail companies are expressing interest in opening their stores within the resort, Ang said.

Currently, Shinsegae operates premium outlet stores within the resort in partnership with Simon Property Group of the US.

Still, the 1-trillion-won development is required to go through more procedures, including getting approval from the relevant authorities.

Another hurdle to overcome is winning over Jeju residents, who are weighing the pros and cons of the development.

Jeju Shinhwa World turned to the black in 2021. Last year, its earnings before interest, tax, depreciation and amortization climbed 26% to 65 billion won.

Write to Soo-Jung Ha at Agatha77@hankyung.com
Yeonhee Kim edited this article