North Korea doesn't WANT a festival. They have one. The festival in question has been around since 1987:
http://en.wikipedia.org/wiki/Pyongyang_International_Film_Festival North Korea, like any other country, would love to have more tourist cash, so a travel agency using that as a selling point makes a lot of sense.
Nitpicking a little further, "The Gulag" is not a region, but the name of the Soviet governing body that used to oversee forced labor camps.
http://en.wikipedia.org/wiki/Gulag
There was an interesting article I read recently about how people will believe ANYTHING that you say about North Korea, because it's so shut off from the rest of the world, and the little that does come out is pretty horrific. So it is confirmed that today's dictator did execute his uncle, the stories of him feeding said uncle to dogs are false. But it's NK, so everyone had no problem believing it. There are also studies about how people's initial reactions to a news story tend to stick, and sometimes even be stronger if contradictory information comes from the SAME source. So CNN says "eaten by dogs" and people are (rightly) offended. CNN says the next day "sorry about that, not eaten by dogs" and a good portion of those people then think "coverup!" The psychology of news is really interesting; I'll dig up a few of the studies/articles sometime when I'm not at work.