This study aimed to set up a basic direction for hosting the 2011 Geumsan World Ginseng Expo and examine its overall feasibility as an international event. We drew up a basic concept of the project and analyzed its feasibility and economic benefits.
The major contents of the research are real conditions and the outlook of the ginseng industry including both domestic and international ones, venue conditions, the basic concept of the expo, the estimation of number of visitors, the analysis of feasibility, and benefits to the local economy and the ginseng industry.
The opening period and circumstantial changes were taken into account to estimate the number of projected visitors of the 2011 ginseng expo based on visitors of 2006. A benefit-cost (B/C) analysis was conducted to analyze the financial feasibility of the expo. In order to estimate the direct and indirect impacts of the expo, we analyzed its impact on the whole country and the province of Chungnam by using a multi-regional input-output model.
Since the mid-2000s, the number of ginseng-cultivating farm households as well as cultivation area and production volume have been on a rising trend due to increasing the demand for healthy functional foods such as ginseng. The public interests in health and well being have escalated and it is thought that this trend will continue in the future.
However, the Korean ginseng has been losing its ground in world markets due to Chinese market flooding with low-price Chinese ginseng. In the midst of this trend, the government has set the goal of achieving 10 billion U.S. dollars in agro-food exports in 2012. Of this amount, it has set aside 200 million dollars for the export of ginseng as a major export item.
The 2011 Geumsan World Ginseng Expo is evaluated to be a good opportunity to revitalize the local economy by stimulating domestic and international demands of ginseng and to put the Korean ginseng industry on a new energy for growth.
The Geumsan ginseng expo is an industrial expo to be held under the theme of 'Ginseng, the Root of Life.' In order to make the event succeed, it is necessary to redress the problems that have surfaced during the previous event and make improvements to suit the changes in the environment. For determining the opening dates and duration of the expo, it was analyzed that holding the event for 32 days from September 2 to October 3, 2011 would be most appropriate.
To estimate the number of projected visitors to the expo, several factors were taken into account: duration of the event, day-to-day visit patterns, and environmental changes in the demand for ginseng and overall business climate of the tourism industry. According to our estimation, there will be about 2.54 million visitors including 36,000 foreigners.
A financial feasibility study showed that the expo will be profitable with the B/C ratio standing at 1.27. In a sensitivity test of the impact of changes in major variables, we found that the expo will be profitable even if external conditions change. The B/C ratio was 1.23 when the number of visitors decreased by 20% and 1.07 even if subsidies decreased by 20%.
The direct impact on the local economy was estimated to reach 521.3 billion won including about 400 billion-won sales of ginseng products. Unlike the event-driven expos held under the themes of tourism or festivity, Ginseng Expo, an industrial expo themed after ginseng, holds a special place since it is distinguishable from other expos in terms of impact on local economy and its durability. The ginseng expo is analyzed to have the following economic benefits: production inducement of 901.4 billion won nationwide (667.9 billion won in the province of Chungnam); creation of value-added worth 471 billion won nationwide (366.7 billion won in Chungnam); and job creation worth 20,868 men nationwide (18,924 men in Chungnam).
As a whole, the 2011 Geumsan World Ginseng Expo is evaluated to be economically viable. For successful hosting of the event, a detailed plan with an aggressive marketing plan should be drawn up. Especially given the fact that there is not enough time to prepare, it is necessary to draft an exhaustive plan by making the best use of past experience.