Seoul is hurting:
Hawaii feels the pain

With South Korea in economic crisis,
Koreans here are pulling together to help
themselves and the motherland

By Susan Kreifels
Star-Bulletin

From "IMF" lunches to shared office space, Hawaii's 35,000 Koreans are tightening their belts to get themselves and South Korea through the economic crisis that has dried up the Korean tourism market.

An estimated $70 million spent annually by more than 120,000 Korean tourists has virtually vanished since November, leaving many local Koreans out of jobs and businesses barely hanging on. Like their countrymen in the homeland, people here are rallying.

The Camellia Restaurant is offering cheap "IMF" lunches like the kinds showing up in South Korea, named after the International Monetary Fund (IMF), which bailed out the country with a $57 billion loan. Debbie Park, the restaurant's manager, said the lunches are meant to help budget-strapped Koreans here as well as remind them to do what they can for the home country.

"It's not just to boost business; it's to show we care," Park said. "Everybody is having a hard time with their money. They'd rather pack their lunches than come out and eat."

Part of a general economic crisis in Asia, South Korea has seen the value of its won and stock market slashed more than half since last year, although it's starting to make a comeback. But the loss has meant disaster for Hawaii's Korean tourism market.

"The damage is too big. My colleagues in the Korean tour business for a long time have no idea how they can coordinate with each other," said Bernie Park, owner of Bernie Travel Service, which does half its business with Koreans. "We have to survive and fight. If I want to keep this business, I have to change my market."

But tourism generally is flat here, and it's especially tough for the estimated 10,000 first-generation Koreans, the worst-hit by the tourism freeze, to crack other markets because of language problems.

Chong Kuk Kim represents 26 travel agencies as president of the Korean Tourism Agents Association of Hawaii.

"At least half of all Koreans here are hurting," Kim said. "They're tightening belts, trying to cut expenses. It affects their shopping, getting new cars. It will affect all Hawaii business."

Kim now shares space with a tour agency to save money. One of his jobs lately is negotiating with landlords on behalf of members who can't make rent.

"I try to explain the Korean economic situation," Kim said. "I get a pretty good reaction. This unexpected economic crisis came so fast."

Kim estimated 200 to 300 people here have lost jobs, and many have moved to the U.S. mainland, where prospects are better.

While Korean tourists have increased steadily in past years, reaching 122,000 in 1996 (the most recent figure), the state estimates that numbers have dropped by 80 percent since November. Merchants catering solely to Korean tourists say business has dropped by up to 95 percent. Korea's Asiana Airlines stopped flights Jan. 4 and closed its Hawaii office. Korean Air will cut two flights a week this month and fly smaller aircraft.

The U.S. State Department has struck a double-whammy. Instead of easing visa restrictions for Korean tourists, restrictions will get even tighter because of the economic crisis.

Others hurting too

Not only Korean businesses are hurting. Maui Divers Association, a jewelry retailer, has worked seven years to develop the Korean market, which brought the store 45,000 visitors a year and 20 percent of its sales. That business has dropped 90 percent, said Bob Taylor, the company's president. Taylor said he's never seen a market crash so fast.

"This is a very, very sad story," said Taylor, who estimated there are 40 tour operators in the Korean market. Others say there are as many as 65, some one-person operations working out of homes.

"One day they were there, and the next day they were gone," Taylor said about Korean tourists. "I know lots are really suffering."

Taylor said a 1995 analysis showed Korean tourists spent an average $600 here during a visit. With some 120,000 showing up last year, that means they poured $70 million into the economy.

Ted Sturdivant, owner and publisher of the Korean Guide to Hawaii, laid off his two helpers and now delivers the magazine himself -- last quarter's edition, not a new one.

"I'm sticking it out," Sturdivant said. "It was the fastest-growing niche Hawaii had -- the fourth-largest market."

Now Sturdivant is focusing more on the Chinese market. But he adds that "when the (Korean) economy recovers, the tourist market will come back very fast and very strong. Hawaii should plan for it."

The South Korean consul general in Hawaii, Jung Kyung Sung, agrees. Sung hopes state officials will continue to press for fewer visa restrictions for Korean tourists. Although most eventually get them, "it takes a long time," Sung said. "It's an emotional issue. Their pride is hurt."

Helping the homeland

Meanwhile, Korean organizations met last week with Sung about how they can help local Koreans as well as their home country. "We must take care of ourselves to help Korea," said Jennifer Myung Hui Kim, vice president of the United Korean Society of Hawaii.

There are encouraging economic signs already: U.S. banks extended their short-term loans to Koreans, and the stock market there regained roughly half its losses by the end of January. Some businesses here say they'll wait until March before making major decisions to see where the exchange rate goes and to watch the new South Korean president, who takes office later this month.

Many people here expect strong Korean nationalism and a tough survival instinct to pull South Korea through its crisis the same way it did after the Korean War. Already, thousands have donated their gold to the government and kept their dollars in the country. Koreans here say even the still-rich won't travel for fear it would create resentment among their countrymen.

"Koreans are usually good at facing a crisis," Chong Kuk Kim said. "For immigrants everywhere, our major concern is the mother country instead of worrying about ourselves."