Unlocking K-Tourism: How to Overcome 14-Year-Old Regulations and Boost Local Travel
Daniel Kim Views
▲ Song Min-gyu, reporter
Seventy-nine percent of foreign tourists who visit Korea say they want to travel outside Seoul, yet 66% actually spend most of their trip in the capital. Thirty-four percent of potential Millennial and Gen Z travelers told Airbnb they would reconsider visiting Korea if they couldn’t find suitable lodging, according to a March survey of 4,500 people across nine countries. Foreign visitors want to go to the regions, and rural areas are full of vacant homes — but a 14-year-old regulation on city homestays for foreign tourists continues to block that potential.
Last year inbound arrivals hit a record 18.93 million, but profitability has deteriorated. Per-visitor spending ($1,155.80) fell below 2019 levels, and duty-free sales to foreign customers plunged from $17.8 billion to $6.56 billion. The tourism account ran an annual deficit of $10.76 billion, marking the third straight year with deficits above $10 billion.
By contrast, high-value medical-tourism spending has grown 5.3 times since 2019, and demand for longer-stay, experience-driven travel has surged. To capture that spending — rather than relying on outdated group-shopping tourism — Korea must modernize its lodging infrastructure. That reform is key to improving tourism revenue.
The city homestay system introduced in 2011 was meant as a workaround to expand room supply. At the time it was tied to social concerns and came with strict limits: a ban on domestic guests and a requirement that hosts reside on-site. Fourteen years on, the market has shifted toward standalone rentals rather than shared living, but the rules remain frozen in the past. With roughly 60,000 unregistered illegal operations versus 3,059 registered businesses, the law clearly fails to meet market demand.
Major tourism countries manage short-term rentals by operating days and location, not by guest nationality. Japan’s 2018 Private Lodging Business Act allows up to 180 operating days per year while letting local ordinances set area limits. Paris tightened short-rental limits from 120 days to 90 days starting in 2025. Those measures are aimed at protecting housing in large cities; restricting rentals by guest nationality is rare worldwide. Domestically, Seoul has proposed allowing nationals and renaming the system “city lodging,” and the government plans to revise the law in 2026 and implement the new framework nationwide in 2027.
Rural and depopulating areas now have more than 57,000 vacant houses. It’s time to abandon the outdated nationality test. Cities should manage operating days to protect residents’ housing rights, while regions in need of lodging should relax rules to attract longer-stay visitors — a policy of regional differentiation. Only by removing the 14-year-old regulatory shackles can Korea reverse regional decline and become a genuine K-tourism powerhouse.
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