China Group Tours to See 'Shopping Commissions' Overhauled... Single Rate Planned From 2028

The Ministry of Culture, Sports and Tourism to Hold Public Hearing on Tourism Promotion Act Rule Revision on November 13

Different Rates by Store and Item Through 2027, Then Unified

Aimed at Reforming Dumping Tours; Concerns Over Lower Trave

The government is moving to curb shopping commissions, a key source of revenue for low-cost group tours to Korea. It plans to apply different commission rates depending on the store and items purchased through the end of next year, then adopt a single rate starting in 2028. The move aims to reform the chronic revenue model of so-called "dumping tours," in which tour products are sold at rock-bottom prices and losses are made up through shopping commissions.

Last month, around 60 Chinese tourists on a group tour were left stranded on the streets of Seoul's Dongdaemun area after their tour bus service was suspended. The incident occurred when a local travel agency, which had not received the agreed travel expenses, halted bus operations. It exposed the vulnerability of the business model behind low-cost group tours, which rely on shopping commissions. To address these structural issues, the Ministry of Culture, Sports and Tourism will hold a public forum on proposed amendments to the Enforcement Rule of the Tourism Promotion Act on the 13th.

Reporter Kim Heeyoon

The Ministry of Culture, Sports and Tourism said on the 12th that it will hold a public forum on the proposed revision to the Enforcement Rules of the Tourism Promotion Act at the Seoul Garden Hotel in Mapo-gu, Seoul, on the 13th, to gather industry views on standards for distributing shopping commissions from group tours to Korea.

The revision to the enforcement rules is a follow-up measure to the amendment to the Tourism Promotion Act promulgated on June 2. The amended law prohibits designated travel agencies from significantly undercutting the cost of attracting group tourists and receiving shopping commissions above a certain rate in ways that disrupt order in the travel industry. It also regulates forcing tourists to buy products, making insulting remarks or otherwise acting disrespectfully toward them, and covering expenses payable to tourism workers with shopping commissions.

The government is considering a phased approach to restricting commissions. Through the end of 2027, it would apply different rates to reflect the characteristics of each store and type of purchase. Starting in 2028, it plans to standardize the rate regardless of the store or item. The phased approach takes into account the possibility that an abrupt introduction of the regulations could sharply reduce travel agencies' earnings or cause confusion as they revise contracts with stores.

Some group tour packages to Korea sold overseas have long attracted tourists at prices below the actual operating costs. Tourists often chose packages primarily based on price because it was difficult for them to know the proportion of the itinerary devoted to shopping, the actual costs of their stay, or the terms of transactions between overseas tour operators and designated travel agencies in Korea. Domestic travel agencies struggled to cover essential operating expenses such as accommodation, transportation, and meals with sales revenue alone, perpetuating a vicious cycle of reliance on shopping commissions from stores.

Earlier, The Asia Business Daily highlighted the irrational distribution structure of low-cost group tours to Korea and the problem of excessive shopping commissions in its special report, "Korean Tourism Sold at Rock-Bottom Prices," bringing the need for institutional reform into public discussion. Through the new regulations, the government aims to shift the market toward standard-priced packages that reflect the actual costs of tourism products in their selling prices.

Opinions in the industry are divided over the direction of the regulations. Some travel agencies are concerned that limits on shopping commissions will reduce their earnings. Others argue that the government should support a transition in the transaction structure so domestic travel agencies can cover operating costs through fair prices for tourism products and proper transactions for tourists' stay expenses.

At the forum, the Korea Culture and Tourism Institute will present on "Improving the Distribution Structure and Promoting a Healthy Market for Group Tours to Korea." The Ministry of Culture, Sports and Tourism will then explain the direction of the proposed revision to the enforcement rules, followed by a discussion among stakeholders, including the Korea Travel Agents Association, the Korea Duty Free Shops Association, designated travel agencies, and stores.

The ministry plans to draft the proposed revision to the enforcement rules based on feedback gathered at the forum, then proceed with follow-up steps, including consultations with relevant organizations, a legislative notice, and regulatory and legal reviews. The specific shopping commission rates have not yet been made public.

"Some dumping tours have operated by relying on excessive shopping commission structures, disrupting order in the tourism industry and leaving visitors deeply disappointed," said Kang Jeongwon, director general of tourism policy at the Ministry of Culture, Sports and Tourism. "Restrictions on shopping commissions will be an essential turning point in establishing a fair market order and bringing qualitative growth to inbound tourism."

This content was produced with the assistance of AI translation services.