MarketProfile SouthKorea May14

South Korea
Market Profile
$2.8-3.4bn
Performance overview
In 2013, South Korea was Australias eighth largest inbound market for
visitor arrivals, the sixth largest market for total expenditure and fifth for
visitor nights. It was the ninth largest market for total dispersed nights1
during 2013.
Potential for the South Korea market

to be worth by 2020 (Tourism 2020)
The October 2013 issue of Tourism Research Australias bi-annual Tourism Forecasts
estimates that visitor arrivals from South Korea will increase 2 per cent in 2013/14 and
3 per cent in 2014/15, with an annual compound growth rate of 4 per cent expected
until 2017/18.
Aviation routes from South Korea to Australia2
$1.1bn
total spend
Total spend from South Korea in 2013

(down 14 per cent on 2012)3
197,700
arrivals
South Korean visitor arrivals in 2013

(down 2.8 per cent on 2012)4
10.6m
Seoul
total nights
South Korean visitor nights spent in Australia

in 2013 (down 17 per cent on 2012)3
HongKong
23%
Brisbane
dispersed nights1
Sydney
Auckland
Percentage of total South Korean visitor

nights spent outside gateway cities in 2013
(down 5 per cent on 2012)3
Australia ranks
among all out of region outbound5

destinations for South Korean travellers6
Visitor profile in 2013

34% repeat visitors3
74% of total arrivals are for leisure3
20-34 years largest demographic3
$6,205 average spend3
58 nights average stay3
Jun-Jul and Dec-Feb peak booking period
Jul-Aug and Nov-Mar peak travel period
1. Dispersed nights refer to nights spent outside gateway cities of Sydney,

Melbourne, Brisbane and Perth.
2. Source: CAPA - Centre for Aviation, Official Airline Guide (OAG), and Tourism
Australia analysis.
South Korea Market Profile 2014
12th
Consumer research
For detailed research into how South
Korean consumers view Australia
and what motivates them to visit the
country, see www.tourism.australia.
com/statistics/fact-sheets
3. Source: International Visitor Survey, Tourism Research Australia.

4. Source: Overseas Arrivals & Departures, Australian Bureau of Statistics.
5. Out of region travel from South Korea excludes travel to North East Asia.
6. Source: Tourism Decision Metrics, Tourism Economics.
South Korea
Market Performance
Arrivals trends
History of Visitors from South Korea into Australia
History
Historyofofvisitors
visitors(000s)
(000s)
South
SouthKorea
Korea
Source
: Australian
Bureau
of of
Statistics
, Overseas
Arrivals
andand
Departures
Source
: Australian
Bureau
Statistics
, Overseas
Arrivals
Departures
250
250
200
200
150
150
100
100
YE Dec 2013
YE Dec 2013
YE Sep 2012
YE Sep 2012
YE Dec 2011
YE Dec 2011
2008
2008
YE Dec 2010
YE Dec 2010
Source: Australian Bureau of Statistics, Overseas Arrivals & Departures
2007
2007
YE Dec 2009
YE Dec 2009
2006
2006
YE Dec 2008
YE Dec 2008
2005
2005
YE Dec 2007
YE Dec 2007
2004
2004
YE Dec 2006
YE Dec 2006
2003
2003
YE Dec 2005
YE Dec 2005
2002
2002
YE Dec 2004
YE Dec 2004
2001
2001
YE Dec 2003
YE Dec 2003
2000
2000
YE Dec 2002
YE Dec 2002
- -
YE Dec 2001
YE Dec 2001
5050
YE Dec 2000
YE Dec 2000
International visitor arrivals (000s)

International
(000s)
International visitor
visitor arrivals
arrivals (000s)
300
300
2009
2009 2010
2010 2011
2011 2012
2012 2013
2013
History of Visitors from South Korea by Purpose of Visit
International
Internationalvisitors
visitorsbybymain
mainpurpose
purposeofofvisit
visit
South
SouthKorea
Korea
300
300
International visitor arrivals (000s)
International visitor
visitor arrivals
arrivals(000s)
(000s)
Source : Australian Bureau of Statistics , Overseas Arrivals and Departures

Source : Australian Bureau of Statistics , Overseas Arrivals and Departures
250
250
Holiday
Holiday
200
200
VFR
VFR
150
150
Business
Business
100
100
Education
Education
Employment
Employment
YE Dec 2013
YE Dec 2013
YE Sep 2012
YE Sep 2012
YE Dec 2011
YE Dec 2011
2009
2009
YE Dec 2010
YE Dec 2010
2008
2008
YE Dec 2009
YE Dec 2009
2007
2007
YE Dec 2008
YE Dec 2008
2006
2006
YE Dec 2007
YE Dec 2007
2005
2005
YE Dec 2006
YE Dec 2006
2004
2004
YE Dec 2005
YE Dec 2005
2003
2003
YE Dec 2004
YE Dec 2004
2002
2002
YE Dec 2003
YE Dec 2003
2001
2001
YE Dec 2002
YE Dec 2002
2000
2000
YE Dec 2000
YE Dec 2000
YE Dec 2001
YE Dec 2001
50
50
2010
2011
2012
2013
2010
2011
2012
2013
Others
Others
Total numb
50,000
45 to 59 yrs
40,000
30,000
60 yrs & over
20,000
10,000
South Korea
-
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Market Performance
Visitor Arrivals by Purpose of Visit for 2003-2013
South Korea: Visitor Arrivals by Purpose of Visit 2003-2013

Source: Australian Bureau of Statistics, Overseas Arrivals and Departures
180,000
Holiday
160,000
Total number of visitors
140,000
Visiting friends or relatives
120,000
Business
100,000
Education
80,000
Employment
60,000
Others
40,000
20,000
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Visitor Arrivals by Age for 2003-2013
South Korea: Visitor Arrivals by Age 2003-2013

100,000
Under 15 yrs
90,000
80,000
15 to 29 yrs
70,000
30 to 44 yrs
60,000
50,000
45 to 59 yrs
40,000
30,000
60 yrs & over
20,000
10,000
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
South Korea: Visitor Arrivals by Purpose of Visit 2003-2013

3

180,000
160,000
Holiday
Total S
400,000
60 yrs & over
300,000
200,000
100,000
2003
2004
South Korea
2005
2006
2007
2008
2009
2010
2011
2012
2013
Market Performance
Expenditure trends
South
Korea: Visitor
Visitor Spend by Purpose of Visit
for 2003-2013
Spend by Purpose of Visit 2003-2013
Source: International Visitor Survey (Tourism Research Australia)
800,000
Holiday
Total Spend (A$ 000s)
700,000
Visiting friends and

relatives
600,000
Business
500,000
Education
400,000
300,000
Employment
200,000
Others
100,000
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Visitor Spend by Age for 2003-2013
South Korea: Visitor Spend by Age 2003-2013

1,000,000
15-29 yrs
900,000
800,000
30-44 yrs
700,000
600,000
45-59 yrs
500,000
400,000
60 yrs & over
300,000
200,000
100,000
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
South Korea: Visitor Spend by Purpose of Visit 2003-2013
2013
South Korea
Market Performance
Visitor profiles
Holiday
Spend per trip $5,160

Stay 51.7 nights
Spend per night $100
Visiting Friends
and Relatives

Stay 33.7 nights
Leisure

Stay 48.1 nights
Business

Stay 18.5 nights
International Visitor Survey (Tourism Research Australia).

Note: Data refers to an average of 2009-2013
South Korea
Aviation Landscape
>> Overall, total South Korean aviation
capacity continues to grow. However,
Australia is losing market share to
destinations with similar travel times
such as the USA, Canada, the Philippines
and Thailand.
>> Capacity from South Korea to Australia
declined in 2012 and 2013, and further
declines are expected in 2014 as Asiana
Airlines temporarily reduces its SeoulSydney services between May and
October 2014.
Aviation routes from South Korea to Australia
Seoul
HongKong
Brisbane
>> The outlook for capacity growth in 2015 is

optimistic as carriers increase frequencies
on existing services and potentially
launch new routes. South Korea remains
a priority for Tourism Australia in
terms of aviation route development
in the short to medium term.
>> The South Korean market is highly
seasonal, with carriers increasing
and reducing capacity in line with
seasonal demand. During peak travel
times in December and January,
average airfares increase significantly
and seats are very limited.
>> Through-traffic from North Asia and
Europe can also impact seat availability
for South Koreans travelling to Australia,
however this has become less of an
issue in recent years with European
traffic via South Korea decreasing.
>> Korean Air and Asiana Airlines were the
only carriers to operate non-stop services
between South Korea and Australia in
2013 and carried 56 per cent of all South
Korean visitors to Australia. In March
2013, Korean Air suspended the only
direct services from Seoul to Melbourne.
Sydney
Auckland
>> Despite capacity declines, average loads

have also declined slightly to 79 per
cent in 2013 and remain very seasonal.
Softer loads are reported during March,
April, May, June and June and higher
loads during Australian school holidays
(January to February, July and October).
>> Low Cost Carriers (LCCs) are a relatively
new phenomenon in South Korea
however their market share is quickly
growing and impacting the way South
Koreans travel. In July 2013, AirAsia X
launched four weekly Busan (Korea)Kuala Lumpur services and plans to
progressively increase Seoul services from
daily to double daily between July 2014
and December 2014. Similarly, Scoot
launched services from Seoul to Singapore
(via Taipei) in March 2013. These

services offer additional connections
to Australia from South Korea.
>> There is an opportunity for South Korean
carriers to expand their codeshare
and interline partnerships to include
Australian carriers, further facilitating
travel around Australia and improving
sustainability of existing services.
>> The recent Free Trade Agreement
(FTA) between Australia and South
Korea signed in February 2014 should
help to stimulate travel and business
links between the two countries.
Key airlines and share of passengers
20%
31%
5%
5%
6%
8%
25%
Airline
Korean Airlines
Asiana Airlines
Cathay Pacific
Qantas Airways
Singapore Airlines
Jetstar
Other
2009
34%
22%
10%
7%
2%
4%
20%
Table includes direct and indirect capacity

Source: Department of Immigration and Border Protection
2010
33%
22%
10%
9%
2%
5%
18%
2011
32%
23%
12%
10%
2%
5%
16%
2012
32%
23%
10%
7%
3%
5%
19%
2013
31%
25%
8%
6%
5%
5%
20%
South Korea
Aviation Landscape
Direct aviation capacity from South Korea to Australia
Direct aviation capacity from South Korea to Australia
Seats per year (000)
Seats per year ('000)
400
+2%
-4%
-8%
300
+5%
-10%
200
100
0
2011
2012
2013
2014 (F)
2015 (F)
Source: Department of Infrastructure and Regional Development

Source: Department of Infrastructure and Regional Development
Note:
(F) is a forecast based on Tourism Australia analysis, chart includes direct services only
Note: (F) is a forecast based on Tourism Australia analysis
Weekly services to Australia

Operating Airlines
Flights
per week
Route
Korean Air
7
4
Seoul-Sydney
Seoul-Brisbane
Asiana Airlines
Seoul-Sydney
Table includes direct services only

Source: CAPA- Centre for Aviation and OAG, Tourism Australia analysis
Alliance/Codeshare partner
(on route)
Qantas, Air NZ, Turkish

Airlines
South Korea
Distribution
The South Korean travel distribution system is complex, with consumers using a combination of traditional and
online channels to plan and book travel. There is no formal distinction between wholesalers and retail agencies in
the South Korean market. The outbound leisure travel market for Australia consists of around 40 per cent group
travel and 60 per cent Free Independent Travel (FIT).
Distribution System
Wholesalers/ Large Agents
Retail Agents
Inbound Tour Operators
Commission Level: 5% to 12%
Commission Level: 9% to 20% for major

travel agencies only
>> Hanatour and Modetour are the

largest wholesalers distributing
their own products to two types of
retail agents - general agents and
franchisees. The total number of
franchisees for both wholesalers is
around 1,500 throughout South Korea.
>> Hanatour, the largest wholesale agency,
has increased its own overseas offices
for land operations as well as catering
to outbound travel from these offices
as part of its diversification strategy.
Hanatour also continues to increase
the number of Inbound Tour Operators
(ITOs), in order to reduce land operation
fees. Hanatour has been investing in
expansion into the FIT market under
the brand Hana Free. Strong hotel
and air bookings have been reported
in the early stages of this strategy.
>> Large agents such as Lotte Tour, Lotte
Holidays (formerly LotteJTB) and Hanjin
are engaged in both retail and wholesale
activities however the proportion of
wholesale activities remains small.
>> Interpark has risen as a strong competitor
to these wholesalers reporting rapid
growth in FIT travel, hotel and air ticket
bookings online. Interpark announced
its intentions to expand into the group
package market, placing pressure
on Modetour in particular, as it is
yet to commit to the FIT market.
>> As an affiliate of Korean Air, Hanjin
organises multiple charter flights with
Korean Air to unique destinations such
as Alaska, Italy, Croatia and Norway.
Special Interest
>> Luxury, campervan, and bush walking
travel for Australia has been introduced
into the market as niche products.
These concepts are currently being
delivered by Free and Independent
Traveller (FIT) and specialty agents.
>> By volume, the main retail agencies

in South Korea are: Verygood Tour,
Yellow balloon, Lotte Tour, Lotte
Holidays (formerly LotteJTB), Hanjin,
Tour2000, and Freedom Tour. Notably,
Verygood Tour has shown strong
growth targeting the wholesaler space,
while Yellow Balloons volumes are
increasing through low cost products.
>> Despite high costs (A$30,000-50,000
per show) the Home shopping sales
channel has become a key volume
driver for agencies with an average
of 300-600 bookings per program.
>> The FIT market in South Korea remains
fragmented at this point in time. There
are a number of active FIT agents in
South Korea including: Naeil Tour,
Interpark, Blue Travel, IOS, Seygero and
Webtour, who develop customised
FIT packages, but as yet there is no
clear dominant market leader. By
total volume, Naeil Tour is the market
leader for FIT products and Interpark is
leading for online air ticket bookings.
Online

>> All major travel agencies have an online
presence, however the number of direct
consumer enquiries and visits to offline
agents is still high.
>> Interpark has a high percentage of
online only bookings.
Aussie Specialists
>> The Aussie Specialist Program is
the primary platform for Tourism
Australia to train and develop
retail agents to sell Australia.
>> As at 28 April 2014, there were 450
qualified Aussie Specialists in South Korea
and a further 903 agents in training.
>> Inbound Tour Operators (ITOs) provide

a vital link between Australian product
and South Korean group travel agents,
with about a third of the business to
Australia handled through ITOs.
>> Most major ITOs operate offices
in Seoul, however there are no set
patterns in business relations between
the Australian and Seoul offices.
>> Some ITOs assume a wholesaler role
for the honeymoon market, particularly
in regional cities of South Korea.
>> Key ITOs located in Sydney and the Gold
Coast include: Blue Sky Tours, Hanatour
Oceania (following the bankruptcy of
Oz World Travel), Hoju Tour (formerly
Harbour City International), Honew
Tours, I Tour, New Line Korea Tours, OZ
Korea Travel, Royal Holiday Travel, S.S.K
Travel (HIHOJoo), Travel Center, Win
Hanaro Tour, Wonderful Pacific, Paran
Travel, and Good Memory Tours.
>> Key ITOs in Seoul include: Newline
Korea Tours, Honew Tour, Key World,
Road Tour and Travel, I Travel, Australia
Tour, Paran Travel, Tour TTL, Wonderful
Pacific, Oceania Tour, and OTT.
Business Events
>> Major agents that specialise in business
events include: BT&I, Sejoong Travel,
Global Tour, Sharp Travel, BCD Travel, Lotte
Tour, Sharp Travel, Redcap Tour and
Hana Business Travel.
>> Many incentive groups tend to travel as
leisure groups, with an additional
component such as a gala dinner added to
the program.
South Korea
Distribution
Trends
Distribution
>> The structure and function of distribution
channels in this market is complex
and changes rapidly. Consumers tend
to use a combination of traditional
distribution partners and online
options to research and book travel.
>> The FIT segment accounts for
approximately 60 per cent of the
outbound leisure market for Australia.
Most FIT consumers book accommodation
and air tickets online, while a small
percentage use FIT specialised agents.
>> The number of South Korean ITOs in
Australia has significantly reduced in
recent years due to limited profitability.
>> Special interest travel continues to be
introduced. Awareness of major events
in Australia such as: Vivid Sydney, the
Sydney Royal Easter Show, the Gold Coast
Marathon and Melbourne Cup, have all
grown in South Korea. Bush-walking
and self-drive (campervan) are also
continuously promoted in the market.
>> Home shopping is now established
as a key purchasing tool.
Planning a visit to market

Planning and purchasing travel
>> According to findings from Tourism
Australias Consumer Demand Research
project7, South Korean respondents would
use a mix of online and traditional sources
when planning a trip to Australia. There is
a preference for general internet searches
and government tourism websites, followed
by talking to family and friends who
have been to Australia, using guidebooks
and travel agents. The research found
the use of brochures was low compared
to the average across all markets.
>> The lack of diversified products in the group
market drives a consumer focus on price.
This is the differentiating factor in the
group travel segment rather than product
inclusions. Group tour prices are also
affected by high airfares in peak season.
>> Consumers prefer Korean language
information and brochures. However,
younger South Korean consumers are
comfortable using English language
websites for research and bookings.
>> The percentage of young Free and
Independent Travellers (FIT) booking
tourism products after arrival is increasing
through ITOs and travel agents based
in Sydney such as Travel Center.
>> Airlines use sales promotions to drive
consumers to book airfares and travel
packages online. Booking lead times
are becoming shorter, approximately
two to three weeks prior to departure.
>> Word-of-mouth and online peer reviews
are becoming increasingly influential in
South Korea.
7. Tourism Australia, Australian Consumers Demand Research, conducted by BDA Marketing Planning, 2012.
Top tips for sales calls

>> The South Korean travel trade generally
prefer hard copies of brochures and
collateral in Korean language.
>> It is helpful to have a translator on sales
calls for more effective communication.
>> The South Korean travel trade value
punctuality and it is a good idea to
reconfirm your meeting in advance.
>> Bring product information, promotional
ideas and specially discounted rates.
>> South Koreans value personal relationships.
Persistent visits and contact can assist in
this process.
>> Learning and using simple Korean
words on sales calls can be a good
ice-breaker during meetings.
>> The best time for sales calls is March to
April and October to November.
>> The key market centres to visit are Seoul,
followed by Busan and Daegu.
>> For more general information on sales
calls and planning a visit to market, please
see Tourism Australias Planning
for Inbound Success ebook at
www.tourism.australia.com/inboundsuccess
South Korea
Distribution
Seasonality
>> The peak booking periods for travel to Australia are June to July and December to February.
>> The peak travel periods to Australia are July to August and November to March.
Seasonality of visitors from South Korea
Seasonality of visitors from South Korea
25,000
20,000
2013
15,000
2012
2011
10,000
2010
2009
5,000
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Source : Overseas
Arrivals
& Departures,
Bureau
of Statistics
Source : Overseas
Arrivals
& Departures, Australian
Australian Bureau
of Statistics
Key trade and consumer events

Event
Location
Date
Hanatour International Travel Show
Australian Industry in Korea
Ilsan
(West, Seoul. 1 and
hours drive)
TBC
Annually - last Friday,

Saturday and Sunday
of May
March 2015 (TBC)
North Asia BEA Showcase
Seoul
April 2015
Australian Tourism Exchange (ATE)
Melbourne,
Australia
21-25 June 2015
Where to find more information

Tourism Australias activities in South Korea are managed from its Seoul office. For
more information visit Tourism Australias corporate website at
www.tourism.australia.com
Australian State and Territory Tourism Organisations operating in South Korea
include: Destination NSW, Tourism and Events Queensland, Tourism Victoria, and
Tourism Western Australia.
Also see:
Republic of Korea (South Korea) Country Brief published by the Department of
Foreign Affairs and Trade at www.dfat.gov.au/geo
For the latest arrivals statistics, visit: www.tourism.australia.com/statistics/arrivals
For the latest International Visitor Survey statistics, visit:
www.tourism.australia.com/statistics/international
Please note In March 2014, the Australian Bureau of Statistics (ABS) released revised estimates (covering the period from July 2004 to December 2013) for
international visitor arrivals and departures in its Overseas Arrivals and Departures (OAD) publication. The changes reflect major revisions to the methodology
for inputting missing traveller data, which led to substantial downward revisions for business travel and numerous markets. The International Visitor Survey (IVS)
statistics incorporate the ABS changes to visitor arrival statistics from the March quarter 2005. Tourism Research Australia (TRA) advise that there is now a break in
series for the IVS statistics from the March quarter 2005, and that previous editions of the IVS should be used with caution. For more information, please refer to the
ABS and TRA websites, www.abs.gov.au and www.tra.gov.au.
10

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South Korea

Potential for the South Korea market

Aviation routes from South Korea to Australia2

Total spend from South Korea in 2013

South Korean visitor arrivals in 2013

South Korean visitor nights spent in Australia

Percentage of total South Korean visitor

among all out of region outbound5

Visitor profile in 2013

1. Dispersed nights refer to nights spent outside gateway cities of Sydney,

South Korea Market Profile 2014

3. Source: International Visitor Survey, Tourism Research Australia.

Source: Australian Bureau of Statistics, Overseas Arrivals & Departures

International visitor arrivals (000s)

History of Visitors from South Korea by Purpose of Visit

Source : Australian Bureau of Statistics , Overseas Arrivals and Departures

South Korea Market Profile 2014

Source: Australian Bureau of Statistics, Overseas Arrivals & Departures

60 yrs & over

South Korea: Visitor Arrivals by Purpose of Visit 2003-2013

Total number of visitors

Total number of visitors

Visiting friends or relatives

Source: Australian Bureau of Statistics, Overseas Arrivals & Departures

Visitor Arrivals by Age for 2003-2013

South Korea: Visitor Arrivals by Age 2003-2013

Total number of visitors

Total number of visitors

60 yrs & over

Source: Australian Bureau of Statistics, Overseas Arrivals & Departures

South Korea: Visitor Arrivals by Purpose of Visit 2003-2013

South Korea Market Profile 2014

Source: Australian Bureau of Statistics, Overseas Arrivals and Departures

60 yrs & over

Spend by Purpose of Visit 2003-2013

Source: International Visitor Survey (Tourism Research Australia)

Total Spend (A$ 000s)

Total Spend (A$ 000s)

Visiting friends and

Source: International Visitor Survey (Tourism Research Australia)

Visitor Spend by Age for 2003-2013

South Korea: Visitor Spend by Age 2003-2013

Total Spend (A$ 000s)

Total Spend (A$ 000s)

60 yrs & over

Source: International Visitor Survey (Tourism Research Australia)

South Korea Market Profile 2014

South Korea: Visitor Spend by Purpose of Visit 2003-2013

Spend per trip $5,160

Spend per trip $4,040

Spend per trip $4,934

Spend per trip $4,868

International Visitor Survey (Tourism Research Australia).

South Korea Market Profile 2014

Aviation routes from South Korea to Australia

>> The outlook for capacity growth in 2015 is

>> Despite capacity declines, average loads

(via Taipei) in March 2013. These

Key airlines and share of passengers

Table includes direct and indirect capacity

South Korea Market Profile 2014

Direct aviation capacity from South Korea to Australia

1. Dispersed nights refer to nights spent outside gateway cities of Sydney,