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THE INVESTOR
August 03, 2021

Demand for overseas travel soars after more than a year of staying put

  • PUBLISHED :June 19, 2021 - 16:01
  • UPDATED :June 19, 2021 - 16:01
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Demand for travel is back in Korea.

Fueled by the government’s recent announcements that travel bubble partnerships with other countries could be in the cards, grounded travel-hungry individuals are anticipating a return of quarantine-free holidays.

So are businesses in the tourism industry that have been hit hard by a bruising pandemic since early 2020.

A leading Korean travel agency which offered a Europe vacation package on a TV shopping channel on June 16 saw some 52,000 people booking the trip within an hour.

This would not have been unusual before the pandemic when flights and hotels were fully booked months ahead of the peak summer and winter vacation seasons.

Waikiki Beach on the southern shore of Honolulu (HanaTour)

Pandemic standstill

Yellow Balloon tour, one of the major travel agencies in the country, recalls how the pandemic had brought business to an abrupt halt.

“Looking back, it was devastating. Travel agencies were hit directly by the pandemic, and everything we had planned for the year 2020 were put on hold,” Heo Youl, the agency’s public relations manager told The Korea Herald.

While many smaller travel agencies went out of business, at major players in the market, like Yellow Balloon tour, employee dismissals were followed by shortened work hours. That meant staff were subject to wage cuts for an indefinite period of time.

The number of employees at six listed travel agencies stood at 4,268 in March, down 15.4 percent from the same period last year, according to the Financial Supervisory Service’s electronic disclosure system.

For Urban Place, a startup travel agency which opened its doors in May 2019, the pandemic was especially hard.

“We had planned every detail of our tour packages, which differ from those offered by traditional agencies,” Urban Place Chief Director Lee Sang-bum told The Korea Herald.

“Just as our programs started to go viral on social media and were receiving good responses, two-thirds of the packages were immediately halted starting March 2020. There were zero bookings on our website. No one has called our office or paid attention (to our products) since then,” Lee said.

The company then had to scramble to apologize to the accommodations and rental car businesses with which the company had just formed partnerships with, he added. 

Robinson Club Maldives, a resort located in the Maldives (HanaTour)

Survival strategies

After the pandemic hit, shortening travel distances and durations to “maximize” customer convenience and safety has been one of the key strategies adopted by travel agencies big and small.

Online travel agency platforms were seen as desirable business models by many travel agencies, as it alleviates the burden of making reservations and payments for airlines, hotels, tours, activities, rental cars and others, but still allows flexible choices rather than having to select from package tours.

Such model is likely to take off as industry players predict holidaygoers are looking to seek destinations off the beaten track.

“The keyword that came up to the minds of those coming to work with no work to do, was ‘customization.’ The company started developing a step-by-step preference system for individual customers, instead of the existing package trips that had all the options built inside,” Heo said.

Especially as trips with big groups and families are not feasible nor safe in an era when social distancing is the new norm, it has spurred development of new business models that cater to individuals, Heo added.

Meanwhile, Frip, a social leisure activity travel platform, which has gained huge popularity among millennials and Generation Z in Korea in recent years, moved swiftly to set up a new group package in response to the pandemic situation.

“Sightseeing was not what we value as being central to traveling anymore, even before the pandemic. But since the pandemic, we have been reassured (of this),” Kim Chul-jin, a Frip public relations manager told The Korea Herald. “Special interest tours that cater to the needs of a specific target and ‘workation,’ was what we set as the main travel package when COVID-19 struck,” Kim said, referring to the term that combines the words work and vacation.

Targeting domestic travels for working MZ generation, those born between 1980 and the early 2000s, Frip’s concept was to offer a pleasant space to remote-work during the day and gather in small groups for activities in the evening. From Jeju to Gyeongju, “Fripgrounds” were set up, where Frip travelers can stay anywhere from weeks to months at the same place. 

Robinson Club Maldives, a resort located in the Maldives (HanaTour)

Safety still priority

“The Maldives, Hawaii, and Switzerland are top three places that people have rushed to book in recent days. The three destinations were not as popular before the pandemic,” said Cho Il-sang, chief manager of travel agency HanaTour.

“Guam, is another location we expect similar high reservation rates in the coming months, as talks of travel bubbles have emerged and airlines are preparing to resume flights. But before all of this happens, we are searching for locations and facilities and human resources on site that are able to follow strict up-to-date disease prevention guidelines.” 

Last year, HanaTour teamed up with Uniquegood, a tech solutions company, and launched a virtual reality-based travel package tour. The history-themed game tour is set in Jeonju’s Hanok Village and involves finding out what happened in Jeonju during a specific historical moment, and carrying out missions throughout the stay at a hotel in the city.

Since large gatherings became unnecessary for the “travelers” who connect to the VR system at their own space in time, the package received positive reviews from the public for satisfying both the excitement of travel and safety.

Social media presence has become a crucial part of traveling as offline meetings are not held frequently in the pandemic era.

One example is the demand for hiking packages at Frip, which has seen a threefold jump since 2019. The program involves hiking alone or in groups of two, then certifying a successful hiking trip by posting photos and messages on the company’s online community board.

The travel industry is looking forward to a return to normalcy next year, hoping it will be the turning point for recovering sales profits to make up for past losses.

In the meantime, opportunities await both businesses and travelers who are ready to offer and experience alternative and new travel options.

By Kim Hae-yeon (hykim@heraldcorp.com)

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