A SURVEY carried out by South Korea’s second largest OTA GoodChoice Company to gauge the appetite of South Koreans for outbound travel showed that most were still “conservative” in resuming travel.
Speaking at WiT Japan & North Asia 2022, Myunghoon Chung, CEO of GoodChoice Company, said, “I was surprised how conservative people are in resuming the travel and this was before the Omicron outbreak. So presumably they have an even more conservative take on this now.”
GoodChoice found that 30% of respondents said the Covid-19 situation would have to end or eradicated before they would reconsider travelling. About 70%-80% said they expected travel would resume at Q4 this year or later, but that has to be pushed back now with the Omicron variant spreading super fast in many countries..
“It’s very difficult to make a prediction. I would be a little bit cautious in the timing as I have no doubt when the clouds are cleared out people will travel, and will travel in a very large volume. But in terms of timing, it might take longer,” added Chung.
Asked to predict when outbound travel could resume, Min Yoon, CEO of Tidesquare, said, it was difficult to do so “but if I had to, it’ll totally depend on the situation such as vaccination rates, new variants and government policies. Maybe we can see some recovery from this summer and full recovery from the second half of the next year.”
Pre-Covid, South Korea was Asia’s second largest outbound market after China. With a population of 52 million it was an outbound powerhouse, which produced 28 million outbound trips in 2019, 2.5 times the number of trips in 2009 and 1.5 times the number of trips in 2015.
It stands to reason then that the panel, moderated by Timothy Hughes, vice president, corporate development, Agoda, focused on this angle while also delving into the domestic travel market that has sustained the industry thus far.
Will domestic travel take a hit when outbound travel restarts? Min Yoon believes that to be unlikely because during the pandemic people have developed a taste for travelling locally and discovering new destinations such as Yasu in the southern part of the country.
Chung, who took over as CEO last year, following the acquisition of the company by CVC Capital Partners in 2019, said that hotels “really tried very hard to absorb the domestic travel demand” by working with local OTAs to promote their offerings.
Hotels in Seoul struggled to fill rooms during the pandemic, resorting to staycations as a way to boost occupancy. Accommodation providers in the countryside and smaller cities fared better because of increased travel to these destinations.
Chung, however, pointed out that while it’s true that domestic travel increased, especially in 2021, it’s not much greater than in 2019.
“So I think the Covid boom in the domestic market is slightly overplayed. Obviously there are winners and losers in the market, but I would characterise it as a comeback or a discovery of domestic travel as opposed to a Covid boom,” said Chung, whose company also used the opportunity during the pandemic to acquire Mangoplate, South Korea’s version of Yelp in 2020 to expand into the food and restaurant market.
Other key takeaways from the panel:
• Corporate travel more resilient
Tidesquare’s Min Yoon said while corporate travel is still down, the sector is more resilient in terms of recovery than leisure. Bookings were encouraging until they were hit by Omicron.
• On technology
GoodChoice’s Chung said that one of the biggest impact of Covid on travel is it changed the competitive landscape. It accelerated the changes that were already happening pre-Covid and allow tech-enabled, nimble product-focus companies to innovate and attract more customers.
“We are almost 100% a mobile company. 70% of our customers are in their 20s or early 30s. We started as an accommodation provider but we expanded into flights, rent-a-car and party rooms. By increasing and improving the usability (of services/products) and being able to execute them in a really speedy manner, companies will be relatively well protected.”
Tidesquare’s Min Yoon said the company was able to take the downtime during the pandemic to improve its technical capabilities, setting up a distribution system for ticketing as one of its focus. It also obtained new businesses such as becoming a ticket aggregator for Hawaiian Airlines,
“So the pandemic gave us new pains but at the same time it gave us those opportunities,” he added.
* Watch the full panel conversation here.
• Featured image credit (Traditional Bukchon Hanok Village in Seoul): ake1150sb/ Getty Images
