N. Korea unveils grand beach resort as it seeks to exploit sanctions loophole

North Korea has completed construction of its large-scale beach resort complex in Wonsan, Kangwon Province. The North's official Korean Central News Agency reported Thursday that a grand opening ceremony for the Wonsan-Kalma Coastal Tourist Area was held on Tuesday, with leader Kim Jong-un in attendance. Yonhap

North Korea has officially opened its long-delayed Wonsan-Kalma coastal tourist zone, signaling a renewed push to generate foreign currency through tourism — one of the few sectors not explicitly banned under United Nations sanctions.

North Korean leader Kim Jong-un presided over the ribbon-cutting ceremony, Tuesday, joined by his wife, Ri Sol-ju, and daughter, Kim Ju-ae. The event marked the culmination of more than a decade of planning for what Pyongyang has billed as a “world-class coastal resort” aimed at attracting both domestic and foreign tourists.

The complex, located on the east coast near the military port city of Wonsan, includes high-rise hotels, beaches, swimming pools, shopping centers and recreational facilities designed to accommodate up to 20,000 visitors. According to the North’s state-run Korean Central News Agency, the site will open to North Korean citizens on Tuesday, with foreign tourist access to be phased in later.

The move to open the Wonsan-Kalma resort comes as North Korea’s economy remains under severe strain from international sanctions targeting its nuclear and missile programs. U.N. resolutions have choked off the country’s access to vital revenue from key exports like coal, textiles and seafood, as well as its ability to engage in international financial transactions. This leaves Pyongyang with few avenues for earning hard currency.

Tourism remains a notable loophole, one of the few sectors not directly prohibited by these sweeping sanctions. The resort’s opening signals a pragmatic pivot by a regime that is determined to defy international pressure, demonstrating its readiness to leverage tourism to prop up its isolated economy, even if it means initially relying on visitors from aligned nations like Russia.

“From the U.S. perspective, tourism is not a violation of sanctions,” said Yang Moo-jin, president of the University of North Korean Studies. “For Pyongyang, it’s a strategic tool for earning hard currency and a possible channel for regime survival.”

Yang noted that the idea of developing Wonsan-Kalma has previously surfaced during North Korea-U.S. diplomacy, including meetings between Kim and U.S. President Donald Trump during his first term.

“Tourism was seen as a possible area for cooperation during denuclearization talks,” he said, adding that the site may now be leveraged as a confidence-building measure in future negotiations.

Despite Pyongyang’s ambitions, experts remain skeptical about the project’s potential without a diplomatic breakthrough. Infrastructure challenges such as particularly outdated airports and poor connectivity could limit foreign interest. Yang added that even if the site becomes fully operational, the primary visitors would likely come from China and Russia, due to North Korea’s ongoing diplomatic isolation from Japan and South Korea.

“Attracting one million visitors a year, as the North claims, is unrealistic under the current circumstances,” Yang said. “Even if 200,000 come from China and Russia and 200,000 from inside the country, there remains a gap. Without normalized ties with Seoul and Tokyo, it’s hard to imagine who would fill the rest.”

The resort’s opening also attracted diplomatic attention.

Russia’s ambassador to Pyongyang, Aleksandr Matsegora, was among the prominent guests at the ceremony — a gesture analysts say underscores deepening ties between Moscow and Pyongyang amid expanding military and economic cooperation.

Since 2023, North Korea has introduced several tourism-related laws and unveiled a national tourism development strategy targeting 2030. The Wonsan-Kalma zone is widely viewed as a flagship project within that plan.

“Tourism is among the easiest ways to earn foreign currency,” Yang said. “But unless diplomatic channels reopen, especially with Seoul, Washington and Tokyo, the project’s full potential will remain out of reach.”