High 1 Resort Transforms
into Full-Blown Family Resort

Kangwon Land CEO Cho imbues a flurry of change and innovation

Kangwon Land is more than a casino built on a once-blackened coal mining town in Jeongseon, Gangwon Province. Kangwon Land, under the stewardship of President-CEO Cho Ki-song, is forecast to chalk up record high sales in the third quarter of 2007 following a similar second quarter, as High 1 Ski Resort has been transforming itself into a full-blown family resort.
When Cho took the helm of the company in March 2006, Kangwon Land was suffering a stream of setbacks - mounting mistrust over management in the wake of successive disgraced executive resignations, declining profitability arising from the operation of privately-run casinos that sprang up like bamboo shoots and a proposed parliamentary action to impose a special excise tax on admission into casinos.
Now, one and half years later, Kangwon Land has turned things around with two straight quarters of record sales.
Behind the company's about-face is Cho's prescription to promote innovation and improve efficiency in order to break the mold of a public enterprise and
transform it into a private company. Removing the inefficiency arising from its position as a monopoly in 1998 and building up a demand base for the future is its goal.
Cho, looking back on his early period as CEO, said, "It could not get any worse at that time. I was not really too burdened."Kangwon Land is now entering a second boom period after overcoming its hardships as the casino town is transforming into a full-blown family-type comprehensive resort.
It was in the late 2006 that Kangwon Land opened its High 1 Resort, the biggest in Asia, serving as a "trigger"to turn the tide. Kangwon Land attracted an average of 179,107 visitors monthly in 2005. That figure edged up to 182,725 during 2006, and soared to 277,000 in July this year, reaching a record high of 330,000 in August.
Said Cho: "With the successful opening of the ski resort, Kangwon Land is in a stage of success in shifting a casino-oriented resort into a family-type resort area furnished with a casino, a ski resort and golf courses. In reality, the number of monthly family visitors surged from 13,467 on average during 2006 to about 70,000 in July this year.
Besides the ski courses, High 1 Resort features a wide range of extravaganzas, including Asia's largest fountain music show, cultural and performing arts shows and wine events as part of its efforts to make the resort into a four-season tourist attraction.
This change in strategy has paid off with better financial results. It chalked up 285.1 billion won and 112.3 billion won in sales and operating income during the first quarter of 2007, respectively, representing a more than 50 percent surge over the same period a year earlier. The company posted more than 100 billion won in operating profit and is forecast to set a record high of sales in the third quarter thanks to the arrival of a record number of visitors.
It is noteworthy that Kangwon Land has had such results, as there was almost no hiring except those in the technical departments, with the personnel quota rising from about 2,900 to a little more than 3,000 despite the opening of the ski resort.
Cho became the first private company CEO-turned president to take the helm at the nation's largest resort. His predecessors hailed from government organizations. Cho has spearheaded an initiative to re-invent its corporate culture to focus on an efficiency and performance-oriented system, departing from an easy-going attitude arising from being a monopoly. His innovative drive has translated into results: the company's 2006 outcome arising from the innovative drive was equivalent to an estimated 53 billion won.
Cho's leadership has even altered labor-management relations. Kangwon Land's labor union, one of the largest service trade unions under the umbrella of the Korean Confederation of Trade Unions (KCTU) had submitted an application for the mediation of a labor dispute and put to a vote a wage negotiation proposal before concluding an agreement with management until 2005. However, management struck a 2007 wage deal without any labor disputes for a second straight year, calling for a wage increase of 2 percent and the introduction of a performance-based incentive system.
Cho has been credited with grafting a private company-style innovative management approach onto a public corporation.
In the 1980s, Cho started his business career at LG Electronics. He held major posts within the LG Group, including president of LG Electronics America and senior executive director of LG Philips Displays, predecessor of LP Displays, before working for TUL, a Chinese home appliance company. He served as the chief operating officer (COO) of an incorporated company that was established by taking over the TV business unit of Thomson. nw

Kangwon Land President and CEO Cho Ki-song (left photo). High 1 Resort has changed into a full-blown family resort, attracting more visitors, particularly families and groups.