Now Todd Thacker will give us the details on why JTO is shutting down its Duty Free Shop in the Jeju Myths and History Theme Park.

The Jeju Tourism Organization will shutter its off-airport duty free shop in the Jeju Myths and History Theme Park.
Governor Won Heeryong made the announcement recently after the province reviewed the plan at a meeting of the Provincial Council.

Recording
Won Hee-ryong / Governor
The duty free shop has failed to adapt to changing circumstances and survive competition. It has been in the red for years. The JTO has accumulated an unmanageable deficit at the taxpayers' expense. Therefore, my office is drawing up plans to close down the business.
<싱크 : 원희룡 / 제주도지사>
"시내면세점이 당시 출범할 때 상황과 목표, 그리고 경쟁 환경을 이겨내지 못하고 사실상 좌초하게 되면서 (제주관광공사) 적자가 많이 쌓인 것입니다. 우리 도민들의 세금으로 계속 적자를 메꾸는 것은 감당하기 힘들다. 그래서 현재 철수를 전제로 대책을 세우고 있습니다."

[slug] Deficit snowballing with fewer tourists and fierce competition
The duty free shop in the Jeju Myths and History Theme Park, where non-Koreans can shop, has seen fewer tourists, mainly Chinese visitors, since an international row due to Seoul’s installation of an anti-missile system that China objected to.
Moreover, with fierce local competition the JTO’s duty free shop in the theme park has been in the red for years.

Since opening in 2016, a net loss of over 4 billion won per year has been recorded.
This year that amount stands at 2.5 billion won.


Yearly Net Loss at JTO DFS (KRW)
Source: Jeju Provincial Tourism Association
4.5B     4.0B   4.1B   2.5B
2016   2017   2018   Jan.~Oct. 2019


<타가>
The total net loss is about 15 billion won.

\15B in losses

[slug] Profits from DFS for domestic travelers, public funds make up for loss
To cover the huge losses, profits made at JTO's duty free shop for domestic travelers, as well as public money, have been poured into the business in deficit.
But the current extent of the losses has reached a breaking point.

[slug] JTO set up emergency task force in April
In April, the JTO formed a task force to examine its financial standing and come up with plans for a breakthrough to its financial problems. However, it has failed to find solutions.
The JTO’s CEO Park Hong-bae said that the organization will concentrate its manpower and budget on its DFS for domestic travelers. It will close its operation in the Jeju Myths and History Theme Park to improve the company’s overall financial standing.

The provincial government opened up the island’s duty free market to increase revenue in the tourism sector and prevent capital outflow.
The JTO was the first local public corporation to have opened a duty free shop.

[Reporter] Todd Thacker
[Camera] Kim Yong-min
[CG] Park Hye-jin

However, after a four year battle in the duty free business, the JTO has raised a white flag in the face of growing criticism that taxpayers have had enough.

Todd Thacker, KCTV