Ownership and Operation Separated: Arpina Operating Rights Returned to Busan Urban Corporation... A Model Case of Public Institution Innovation

Youth Hostel Operation Rights, Busan Tourism Organization → Busan Urban Corporation

Resolving Administrative Inefficiency and Reducing Deficits Due to Separation of Ownership and Operation Rights

Busan City Hall.

[Asia Economy Yeongnam Reporting Headquarters Reporter Kim Yong-woo] The operation rights of Busan Youth Hostel Arpina will return to Busan Urban Corporation starting from the 1st.

Arpina, which opened in July 2004, was built and operated by the Urban Corporation until January 2013, when the operation rights were transferred to the Tourism Corporation upon its establishment.

Although the ownership of Arpina was also intended to be transferred to the Urban Corporation along with the operation rights, due to Busan City's difficulty in securing substitute assets and the enormous national tax burden, the ownership remained with the Urban Corporation while only the operation rights were transferred, resulting in an abnormal arrangement.

As the tourism industry stagnated due to the COVID-19 pandemic, operating deficits at Arpina accumulated, exacerbating the financial difficulties of the Tourism Corporation.

In June last year, Busan City set a policy to "return the operation rights of Arpina" to alleviate the management burden on the Tourism Corporation and has been discussing measures to return the operation rights.

Through a total of 16 working-level consultative meetings involving labor and management representatives from both the Tourism Corporation and the Urban Corporation, discussions were held on employment succession and the method of business transfer, and a business transfer plan was prepared.

In June of this year, the amendment bills to the establishment ordinances of both corporations passed the City Council, finalizing the return of Arpina's operation rights to the Urban Corporation.

Park Hyung-jun, Mayor of Busan, said, "I deeply appreciate the City Council and labor-management officials of both organizations who united in their will to return the operation rights of Busan Youth Hostel Arpina, which had been adrift for a long time under difficult financial conditions due to COVID-19," and added, "We will reorganize Arpina to become a model case of innovation for public institutions in Busan City."

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