German hotel operator Kempinski AG will become the first Western brand to manage a hotel in North Korea next year. Nicknamed the ‘Hotel of Doom’, the Ryugyong Hotel in Pyongyang is expected to partially open in summer 2013 after 26 years in development, becoming the tallest hotel in the world.
“This pyramid monster hotel will monopolise all the business in the city,” said Kempinski chief executive Reto Wittwer in November 2012. “I said to myself: we have to get this hotel if there is ever a chance, because this will become a money-printing machine if North Korea opens up.”
Tourism growth in North Korea is expected to be “positive but limited”, according to an October 2012 report from London-based market research agency Euromonitor. The country is actively seeking foreign investment to generate both the capital and infrastructure to support tourism, which is a key facet of the government’s strategy to bounce back from economic depression.
Chinese travellers – the biggest inbound market for North Korea – fell by 70% from 2010 to 2011 due to the country’s notorious restrictions on tourists. In June 2011, Chinese visitors gained consent to tour the country independently – a precedent for the destination. US citizens were granted permission to visit North Korea in 2010, but Western tourists account for just 1,500 visits annually.
Changing consumer perception will be key to driving tourism to North Korea. Read more about how destinations can shift their brand identities in Branding Cities.