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A man looks at the Olympic Rings at the Gyeongpodae beach in Gangneung, South Korea, October 31, 2017. REUTERS/Kim Hong-Ji

(reuters_tickers)

By Jane Chung and Hyunjoo Jin

PYEONGCHANG, South Korea (Reuters) - Workers in the South Korean resort town of Pyeongchang are making final preparations for the Winter Olympics, remaking roads, renovating buildings and preparing menus in English, Chinese and Japanese, a burst of activity that masks a big problem.

With less than 100 days before the Games begin, barely a third of the tickets have been sold.

"It's a bummer," said 55-year-old motel owner Oh Young-whyan, who spent about $360,000 refurbishing his 15-room property close to the Olympics Plaza.

Oh, other hotel owners and local authorities say political tensions with North Korea and China have chilled foreign interest in the Games, which open on Feb. 9 just 80 km (50 miles) from the world's most heavily fortified border.

Tourists are reluctant to commit to the event as North Korea's leader, Kim Jong Un, and U.S. President Donald Trump trade insults and threats of mutual destruction after the North conducted its sixth and most powerful nuclear test in September.

Ticket sales are weak, with 341,327 sold, or 32 percent of the total on offer, as of Oct. 24 - much weaker than during the run-up to the last winter Games in Sochi, Russia. More than 70 percent of Sochi's tickets were sold before the opening ceremony.

Pyeongchang Organising Committee Secretary General Yeo Hyung-koo says there is still time to catch up. The Olympics torch relay, which began in Korea on Wednesday, will ignite domestic interest, he said.

Local business are also putting on a brave face, hoping for a late surge in interest, especially from Chinese tourists after Beijing this week set aside a dispute with Seoul over an anti-missile system.

"We still have 100 days so I'm not that worried," said Oh, owner of the Daekyanryung-sanbang motel, where Olympics banners were hung inside and out.

NO PASSENGERS, EMPTY AIRPORT

Nearby, a bus terminal which undertook a $447,000 makeover in preparation for the Olympics was largely empty, with only one Chinese couple and a handful of locals seen waiting for buses.

Buses bound for Seoul in the past used to have as many as 38 foreign passengers, half of them Chinese, but nowadays some buses have no passengers, said Kim Moo-gyu, the owner of the terminal.

Before this week's diplomatic breakthrough, Chinese authorities had unofficially imposed a ban on tour groups visiting South Korea since March and stopped charter flights.

The number of Chinese visitors, which accounted for nearly half of all foreign tourists into South Korea last year, slumped 61 percent from March to September from the same period last year, official data shows.

Yangyang International Airport, the only international airport near Pyengchang, was quiet, with flight routes from Shanghai and seven other Chinese cities all cut since last November.

'LOTS OF LOSSES'

Min Byong-kwan, the chief executive of Phoenix Hotels & Resorts, is counting on a pick-up. The ski resort spent tens of millions of dollars building six Olympics courses and renovating some 1,000 rooms to accommodate foreign officials during the Olympics.

"We are making a lot of investments - and booking a lot of losses - through the Olympics," Min said.

"It is regrettable that the Olympics boom is falling short of our expectations so far." But he added: "I expect the boom to experience exponential growth for the remaining 100 days."

Pyeongchang, carved out of pine-covered slopes in northeast Gangwon province, is being festooned with banners reading "Passion Connected", a slogan reflecting the hosts' aim to dissolve tensions with a show of sporting goodwill.

Organizers hope athletes from North Korea, still technically at war with the South, will take part and share the mountain with American and Chinese athletes. The North has yet to confirm if it will send a team.

Han Do-sam, who sells seafood at the popular Sokcho fish market, said the improvement in ties between Beijing and Seoul was a good start.

"We hope ... it will help more foreign tourists come here when they visit for the Olympics," Han said.

UNLIKELY TO MEET TARGET

South Korea planned to use the Olympics to introduce foreign tourism to Gangwon province. Provincial authorities set an ambitious goal of attracting 5 million visitors next year, up from an original expectation of around 3 million this year.

But Gangwon governor Choi Moon-Soon said he doubted the 2018 target would be met.

"So far we have seen declines in visits from China and Japan, which are directly affected by the North's nuclear issue," Choi told Reuters. "Southeastern Asian group tourists are showing signs of cancelling trips as well."

Song Sung-sup, director of Goodmorning Travel, which specializes in Chinese tourism, was also glum, despite Tuesday's surprise detente between South Korea and China.

"Unless China lifts a ban on charter flights to any local airport in South Korea, I'm a bit sceptical whether signs of easing are clear at the moment," said Song, who saw sales drop by up to 20 percent due to the frozen ties with China.

Just two years ago, the outlook looked bright.

A Chinese company had committed to build a $431 million luxury resort - China Dream City - an hour's drive from Pyeongchang.

Pitched at Chinese tourists, it was to provide accommodation during the Games. But construction has still not begun.

Governor Choi said he was also worried about delays to a $450 million project to build a Legoland in the city of Chuncheon, about 145 km (90 miles) from the Games venue.

Legoland operator Merlin Entertainments said last month the resort's completion date was delayed by three years to 2020 to get final partner funding and "for a lot of Korean twists and turns", without elaborating.

Merlin CEO Nick Varney joked last month it might help ease tensions, and brighten up prospects for the Games, if Legoland were to promise North Korea's leader an annual pass to the theme park.

"Hopefully that will cheer him up a little bit."

(Additional reporting by Haejin Choi and Yuna Park in Seoul, Karolos Grohmann, Writing by Mark Bendeich, Editing by Soyoung Kim and Lincoln Feast)

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