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South Korea Market Profile

South Korea is the second largest outbound market in Asia, supported by 56 nonstop flights from three airlines into two California gateways weekly. The recent progress in inter-Korea relationship and denuclearization talks between two Koreas is expected to bring a whole new expansion of the Korean economy as well as the outbound tourism, fueled by the growth of free independent travel and the shift from cookie-cutter tour products to authentic, inspirational and experiential ones.


MAJOR TAKEAWAYS

  • The South Korean won remains one of the most stable currencies in Asia.
  • Everyone is online: 82 percent of the country interacts with social media.
 
  • Products are increasingly inspiration, diverse, and thematic.

     

     

South Korea Profile

513,000
In Person Trips, 2018
$997 Million
Visitor Spending, 2018

Market Conditions

GDP Annual Growth Rate

South Korea’s financial market fundamentals remain solid, yet there are concerns about decreasing corporate investment in facilities as well as slow domestic consumption. The economic growth projection for 2019 is 2.7 percent. The outlook of South Korean outbound travel is still extremely positive, continuing in 2019. South Korea is one of the world’s most resilient and robust outbound travel countries with an average growth of 12 percent YOY since 1988, forecasting more than 30 million outbound trips in 2019.

Exchange Rate

  • The South Korean won remains one of the most stable currencies in Asia.
  • The Korea Institute of Finance forecasts that the U.S. dollar to Korean Won exchange rate will trade at an average annual rate of KRW1,064.

Travel & Planning Methodologies

AIRLIFT

  • 62 weekly nonstop flights
  • 21,724 weekly non stop seats
  • Nonstop flights from four airlines to two gateway cities (35 weekly non stop flights to Los Angeles and 28 weekly flights to San Francisco).
  • A recent joint venture of Korean Air and Delta Air has expanded services from 164 to 370 through code share; Delta operates flights to 11 destinations in California.
  • There are innumerable non-direct flights to California, connecting via hub cities including Narita, Taipei, Shanghai, Hong Kong, and Seattle.

BOOKING

  • California is a popular destination year-round for bleisure and for visiting friends/relatives.
  • Booking time is evenly spread and the booking window has become shorter. The normal booking window for California travel is three months for the main booking period (July to August, and December to February).
  • Top 20 travel agents handle over 80% of the outbound package tours.

Market Barriers & Risk Factors


Competitive Landscape


Other Market Insights

MARKET

  • The number of Koreans traveling overseas reached a peak of 26.5 million in 2017, an 18.7% increase from the previous year. This is equivalent to 51.2% of the total Korean population, one of the highest ratios of any nation in the world. It is expected to exceed 30 million in 2019, establishing itself to be the 2nd largest Asian market after China.

AUDIENCE

  • With the generalization of e-commerce, online purchase of travel and booking services accounted for the largest proportion of transactions in 2017 (Statistics Korea.) Furthermore, global OTA and meta search services for overseas travel dominate the Korean travel market by a significant percentage of 70% (Consumer Insight.) Korean FIT travelers are expected to continue taking advantage of the extensive inventories and low prices of global OTAs, resulting in a greater presence within the domestic market.

PRODUCT EXPERIENCE

  • In order to meet the demand of Korea’s quickly maturing market, tour products, travel marketing efforts and travel resources are becoming more inspirational, thematic, sophisticated and diversified.

SOCIAL MEDIA

  • Social media users in South Korea are projected to
    increase in the coming years, reaching a total of 31.8 million by 2021. South Korea has the highest active social media penetration among Asian countries—82% as of 2017. Close to 42 million users in South Korea accessed social networks on a monthly basis.

     


Sources

  • IMF.org
  • The Bank of Korea
  • Korea Tourism Organization
  • Tradingeconomics.com
  • DIIO
  • U.S. Department of Commerce
  • Skyscanner
  • Expedia