Key Summary
- South Korea’s government plans to curb shopping commissions that have been a major revenue source for low-cost inbound group tours.
- A phased system is being considered: differentiated commission rates by outlet and product category through the end of 2027, followed by a single rate starting in 2028.
- The policy is intended to address the business model often described as “dumping tourism,” where tour prices are set very low and losses are offset through commissions from shopping stops.
- The Ministry of Culture, Sports and Tourism said it would gather industry 의견 at a public forum in Seoul on revisions to enforcement rules under the Tourism Promotion Act.
- The ministry has not yet disclosed the specific commission rates under review.
Main Story
South Korea is preparing to tighten rules on shopping commissions tied to inbound group tours, a revenue channel that has long supported low-priced package tours from overseas markets. According to the government, the planned changes would first allow different commission rates depending on the type of store and the goods sold, before moving to one uniform rate in 2028.
The Ministry of Culture, Sports and Tourism said on the 12th that it would hold a public discussion on November 13 at a hotel in Seoul’s Mapo district to collect industry views on how shopping commission income should be distributed in group tours visiting South Korea. The meeting is part of follow-up measures to a revision of the Tourism Promotion Act promulgated on June 2.
The amended law prohibits designated travel agencies from attracting group tourists at sharply reduced costs while receiving shopping commissions at a certain level that disrupts the travel business order. It also brings into scope practices such as forcing tourists to buy goods, using insulting language toward tourists, and covering expenses for tourism workers through shopping commission income.
The government’s approach is designed to avoid an abrupt shock to the market. Officials said that applying a uniform rule immediately could reduce travel agency revenue too quickly or create confusion when contracts with retailers are changed. Under the draft direction now under review, differentiated rates would remain in place until the end of 2027, after which the same rate would apply regardless of the retailer or product category.
Officials said some package tours sold abroad have been priced below their actual operating costs. In such cases, tourists often choose products without being able to clearly assess the share of time spent shopping, the real cost of the trip, or the commercial terms between overseas sellers and domestic designated agencies. Domestic travel companies, meanwhile, have relied on shopping commissions to cover unavoidable expenses such as lodging, transportation, and meals.
The ministry said it wants to shift the market toward fixed-price products that reflect the actual cost of tourism packages. Industry responses are mixed: some travel companies worry that limiting commissions will cut into revenue, while others argue that the government should help restructure transaction practices so domestic firms can secure operating funds through normal tour pricing and stay costs.
The discussion forum will include a presentation by the Korea Culture & Tourism Institute on improving distribution structures and normalizing the inbound group tour market. The ministry will then explain the proposed rule changes, followed by comments from stakeholders including the Korea Association of Travel Agents, the Korea Duty Free Association, designated travel agencies, and retailers.
After the forum, the ministry plans to prepare a draft revision, then proceed with interagency consultation, advance notice of legislation, and regulatory and legal review procedures.
The ministry has not disclosed the specific shopping commission rates under consideration.
Background
The supplied text provides background on a long-running low-cost inbound tour model in which shopping commissions helped offset tour prices set below operating costs. It also notes that earlier reporting by the same publisher had highlighted structural problems in the market and the need for reform. No additional background was provided beyond these details.
Items Requiring Further Verification
- The exact shopping commission percentages under discussion have not been released.
- The final legal wording and implementation details of the enforcement-rule revision remain pending.
- Industry views are described as divided, but the text does not quantify how many stakeholders support or oppose the change.
- The timing and outcomes of the upcoming consultation, notice, and review steps are prospective and not yet confirmed.