The Korean War, which ended in 1953, divided the two Koreas by a demilitarized zone. South Korea remains a strong western ally while North Korea is viewed as a pariah state. Both countries remain technically at war.
Reto Wittwer, a hotel magnate from Switzerland, is said to have overhead Ri Su Yong, former North Korean ambassador to Switzerland, suggest unification could take place under a "one-country, two-systems" policy, reports South Korean news agency Yonhap.
The former North Korean envoy said it would likely take two generations for complete reunification, however. Ri was described by Yonhap as a close confidant of North Korea leader Kim Jong Un.
Tensions along the border escalated last week when South Korean protesters launched balloons carrying anti-Pyongyang slogans. In mid-October, Pyongyang said it would conduct a "merciless military strike" against anti-government activists near the border.
Wittwer is planning to build a hotel on Pyongyang next year.
Notable deaths of 2014 [PHOTOS]