Wed, Jun 05, 2002 page19

• Empty seats worry S Korean, Japanese firms

  Of the eight matches held in South Korea and Japan in the first three days since Friday's kickoff, 92,932 seats were empty, or 23 percent of the total. Those vacant spots have some wondering if the World Cup will infuse the countries with the cash that they were hoping for

  • BLOOMBERG
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  The World Cup's opening ceremony in Seoul on Friday featured models wrapped in flowing silk gowns, dancers sporting flat-screen headdresses -- and 7,000 empty seats.

  "It was a great ceremony," said Kim Jung-min, a manager at flat-screen maker Samsung Electronics Co, who attended the ceremony. "But I was surprised to see so many empty seats."

  South Korea blamed the ticketing mixup on Byrom Consultants Ltd, a UK company in charge of ticket sales that also drew fire in Japan for missed deadlines and double-ticketing.

  

  A Brazilian fan gets a smile from a security policeman as he playfully offers a replica of the World Cup trophy in Ulsan's Munsu Football Stadium, Monday. Behind him are some of the thousands of empty seats that have plagued the Cup since it opened, worrying both South Korean and Japanese sponsors.

  PHOTO: AFP

  It wasn't an auspicious start for an event that South Korea and co-host Japan hope will spur spending and burnish their overseas images. South Korea lost 800 million won (US$650,000) on the first-day extravaganza, Maeil Business Daily reported.

  South Korea has been keen to show off its progress in the 14 years since 1988, when it hosted the Olympic Games. Dancers at Asia's largest soccer stadium wore 100 thin flat-panel displays, valued at about 1 billion won. Donated by Samsung and LG Philips LCD Co, the screens displayed different scenes and underlined South Korea's grip on two fifths of the world flat panel market.

  To prepare for the first World Cup in Asia since the tournament's inception in 1930, South Korea spent more than US$2 billion to build 10 soccer stadiums, including the 200 billion won it spent on the Seoul World Cup Stadium, which seats 64,640 people.

  So far, however, South Korea and Japan have attracted fewer visitors than anticipated. About 48,000 people a day entered South Korea through Incheon International Airport in May, down from 56,000 in April. In Japan, about 40,000 entered per day, 10,000 fewer than officials had expected.

  Of the eight matches held in South Korea and Japan in the first three days since Friday's kickoff, 92,932 seats were empty, or 23 percent of the total, according to the Chosun Ilbo newspaper.

  Slack demand raises questions about whether South Korea will gain as much benefit from the global tournaments as economists and other planners expected. An estimated influx of 400,000 overseas visitors was expected to inject US$604 million into the local economy, the state-run South Korea Development Institute estimated earlier this year.

  "Because the games are being played in 20 different locations, it's the locals who have to pick up the slack," said Hong Namki, South Korea strategist at Morgan Stanley Dean Witter & Co.

  "More South Koreans need to get out to attend the games and spend money."

  At best, the games will help boost South Korea's economy by 0.1 percentage point in the second quarter from the first quarter, according to Lim Jiwon, an economist at J.P. Morgan Chase & Co in Seoul. South Korea's economy grew 1.8 percent in the first quarter from the previous, the fastest pace in 1.5 years.

  "I don't expect the World Cup effect to be as rosy as South Korea had hoped," Lim said.

  "The effect will also be less because the games are being co-hosted by two countries."

  Many hotels complain of empty rooms.

  "Because the World Cup is held both in South Korea and Japan, Japanese tourists, who account for as many as 70 percent of tourists in Busan, aren't coming to South Korea," said Kim Suk-kyung, an official at the Hotel Lotte Busan, part of South Korea's largest chain of luxury hotels.

  South Koreans are also refraining from traveling to other cities.

  "Compared with a year ago, reservations fell about 30 percent because people are staying home watching TV," said Lim Joung-sim, an official at the Jeju Palace Hotel.

  Again, hotel operators say Byrom, the UK contractor, is at least partly to blame.

  Byrom, which has a contract with 213 South Korean hotels, canceled more than two thirds of 796,158 rooms covered in its first pact last month, saying it overestimated the number of visitors. That left hotels with empty rooms and little time to fill them.

  South Korea's organizing committee for the World Cup plans to protest to FIFA, soccer's governing body, and seek compensation from Byrom for losses caused by unsold seats and ticket distribution problems, Yonhap News reported.

  Travel agencies also say they're unhappy.

  "Our outbound travel sales could have been higher by about 20 percent if it weren't for World Cup games," said Won Kwang-cheol, a manager at Hana Tour Service Inc, South Korea's largest travel agency. "Inbound traveling is also not as high as everyone expected."

  The South Korea Association of Travel Agents said it estimates only about 40,000 visitors from China. That's half its earlier estimate because of expensive accommodation and flight tickets.

  South Koreans regained some confidence after the national team unexpectedly beat Scotland 4-1 and drew with England in recent friendly matches.

  South Koreans are hoping their national team will make it as far as the second round of the finals for the first time.

  History hasn't been kind to the South Korean team.

  Though South Korea qualified for more FIFA World Cup finals than any other Asian country, it played in five previous tournaments without winning a single game.
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