"Earn 100 Won, We'll Give You 116 Won"...The Strange Contract of Incheon Airport

There is a business operating under a lease contract where if they earn 100 won by running a business on rented land, they have to pay 116 won. It may be hard to believe, but this is an actual contract made between major public enterprises and leisure companies in South Korea. In 2020, Incheon International Airport Corporation signed an operation contract for Club72 (formerly Sky72) with KX Group (KMH Shilla Leisure), the golf course operator. The rent is collected based on sales revenue.

A view of the 18th hole on the Haneul Course at Sky72 Golf Club.

Since April, KX Group has been operating the golf course Sky72, located in the Sinbul area of Incheon Airport and the planned 5th runway area, under the new name Club72. The Sinbul area of Club72 is called the Sky Course, and the 5th runway area is called the Sea Course. The rent for the Sky Course is 116% of sales revenue, while the rent for the Sea Course is 46%. Simply put, the more sales the Sky Course makes, the more loss KX Group incurs. Moreover, considering taxes, labor costs, and management fees, the actual loss is estimated to be twice the sales revenue.

When Incheon Airport Corporation selected the successor operator for Club72 golf course, political circles at the time, as well as the previous operator and bidders such as Sky72 and Summit, argued that the sales rate method was disadvantageous to the corporation. They claimed that by reducing the sales of the Sky Course, the rent payable to Incheon Airport could be lowered. Even the Board of Audit and Inspection launched an audit, citing issues with the contract. However, the final audit result found no illegal or improper handling of affairs.

However, the actual operation results confirmed these concerns. Currently, Club72 charges green fees for the Sky Course ranging from 120,000 to 180,000 won on weekdays in June, and 190,000 to 240,000 won on weekends. Last year, when it was Sky72, the green fee for the Sky Course was 249,000 won on weekdays and 299,000 won on weekends and holidays. This means the lowest price is less than half, and even the highest price is about 50,000 won less. Additionally, the Sky Course currently offers a free Korean buffet to users. Meanwhile, the so-called "shade house," where players could rest and eat during their game, is currently closed. They are doing everything possible to avoid making a profit.

From KX Group’s perspective, to compensate for losses incurred on the Sky Course, they have no choice but to squeeze more money from users of the Sea Course. When Club72 was operated as Sky72, the sales recorded last year were 92.4 billion won. However, this year’s sales are inevitably expected to decrease compared to last year.

One might think that the Sky Course can be used at a low price, but the reality is somewhat different. Until recently, the reservation system for the Sky Course was a real-time booking system. Users had to click to secure available times the moment the site opened. However, very few people succeeded in making reservations; most ended up buying reservation rights at high prices from so-called professional brokers.

Regarding this, Incheon Airport Corporation stated, "It has only been about two months since the operation of Club72 began, so it is difficult to determine profit or loss solely for the Sky Course." However, they added, "We plan to analyze operational performance since the start of business and review whether there was intentional neglect in operating the Sky Course. We will seek legal advice from a law firm and devise countermeasures accordingly."

This content was produced with the assistance of AI translation services.