August Tourism Conference August 28
Korean Market Situation
Korea Economic Overview 2015 ECONOMIC GROWTH: 3.1% forecasted for 2015, compared to 3.4% in 2014 4th largest economy in Asia, 15th largest n the world GDP per Capita (2014) at $28,738 compared to $37,539 of Japan Korean Won weakening against USD ($1USD = KRW1,180) MERS (Middle East Respiratory Syndrome) Outbreak Over 120,000 tourists, 4,000 flights cancelled (mostly short-haul) Consumer confidence dropped to lowest level since 2012 Online sales increased by 27%, online orders increased by 60% Visits to the cinema decreased by 50% 2015/2016 Travel Forecast: Most of economic indicators indicate Korean outbound travel will continue to remain strong Jin Air s entry will bring additional 100,000 seats (Source: OECD, IMF)
Korea Outbound Travel Overview Over 30% of Korean population is travelling overseas 2014 Outbound Travel: the total number of Korean outbound travelers in 2014 was 16 million, up 8% yearon-year Volume of Outbound Korean Tourist 16mil 13mil 5.8mil 2000 2006 2014 18mil 2015 2015 Forecast: the number of Koreans travelling overseas in 2015 is expected to exceed 18 million, up 11% 2014 Singapore 3% Others Macau 3% 16% Vietnam 5% China 26% China, Japan and SE Asia dominates with over 80% Thailand 7% Philippines 7% Hong Kong 7% USA 9% Japan 17% Source from KTO
Korea Outbound Travel Overview Top 10 Destinations for Korean Travel - 2014 Rank Country KR Visitors Country Share YOY Growth 1 China 4,181,800 26.0% 5.4% 2 Japan 2,755,313 17.1% 12.2% 3 USA 1,449,538 9.0% 6.6% 4 Hong Kong 1,251,047 7.7% 15.5% 5 Philippines 1,175,472 7.3% 0.8% 6 Thailand 1,117,449 6.9% -13.7% 7 Vietnam 832,969 5.2% 11.3% 8 Macau 554,521 3.4% 16.9% 9 Singapore 536,544 3.3% 13.7% 10 Cambodia 424,424 2.6% -2.4% Top 10 TTL 14,279,077 88.8% 6.6% All Outbound 16,080,684 100.0% 8.3% Travel to the U.S. A. The visitors to U.S continue to increase Ranking No.3 out of top 10 destinations for Korean travel Hawai i ranked the most desired destination in US Hawai i ranked the most desired honeymoon destination Source from KTO
Airlifts to Hawai i 17 non-stop flights from Korea to Hawai i in 2015 Three airlines providing direct service (Korean Air / Asiana Airlines / Hawaiian Airlines) Delta Air Lines, Japan Airlines, United Airlines, providing one-top service via Japan Airline Aircraft Frequency Seats Total Seats Korean Air KE053/054 Daily 365 133,225 Asiana Airlines OZ232/231 5 flights a week 275 71,500 Hawaiian Airlines HA460/459 5 flights a week 294 76,440 TOTAL 17 flights a week 281,165 Jin Air will be launching INC-HNL flight on Dec 19, adding over 100,000 seats in 2016, and potentially generating over $200 million in revenue to the State Airline Aircraft Frequency Seats Schedule Jin Air LJ601/602 5 times a week (Mon, Wed, Thu, Sat, Sun) B777-200ER (393 seats) 8:40pm/9:20am 11:05am/4:55pm (+1)
Competitors Activities Australia Product Placement on TV Social media/ Mobile communication New Zealand New global campaign on YouTube started from July under the theme of 100% Pure New Zealand' Canada New blog open targeting FITs in 25s~39s TV filming projects for outdoor adventures Hong Kong Summer Campaign Shop, Eat, Play targeting SIT Free e-coupons for attractions and dining outlets
Korea Challenges & Opportunities Challenges: Lack (perceived lack) of hotel rooms in Waikiki Increasing hotel room rates, and extra charges (i.e. resort fee, internet) Quality of Korean tour guides Severe competition between airlines Neighbor island connectivity Currency Exchange Rate (KRW weakening against USD) Opportunities: New direct flight by Jin Air from December 2015 117 Holidays in 2015 including weekends Growth in FIT, Growth in MCI Business Increase in PPPD Growth in product offerings to neighbor islands Positive destination image, celebrity s favorite destination
Servicing Korean Visitors
Who is coming to Hawai i? Korean Visitor to Hawai i (first half of 2015) First timers: 82.5% Repeaters: 17.5% Kaua i 3% (5,060 pax) O auh 97% (164,320 pax) Maui County 24% (40,816 pax) 97% Visited Oahu & 30% visited Oahu + NI Multiple Islands Visits are increasing (Kaua i +87%, Lana i +46%) Honeymoon market continues to grow +1.5% Average Party Size: 2.5 Hawai I Island 9% (14,631 pax) 2014 (1 st Half) 2015 (1 st Half) Growth Arrivals 88,042 83,150-5.6% Visitor Days 609,141 582,512-4.4% Average Length of stay 6.92 7.01 +1.3% PPPD$ $272 $287 + 5.5%
Who is coming to Hawai i? Korea Market Profile 43% 39% 14% 4% Honeymoon FIT Package MCI/Business Romance Source: Hawai i Tourism Authority
Who is coming to Hawai i? First timer Explore Hawai i s iconic places Mainly visit O ahu Day trip to neighbor island Repeat visitor Seek diverse experiences (local, unique, emotional) Overnight stays in neighbor islands Less dependent on travel agents
What are they looking for? Family Family traveling with kids Babymoon trip 3-generation trip Gourmet Michelin-star chef s cuisine Famous local restaurants Food Truck Romance Honeymoon trip Wedding snap-shot Proposal trip Shopping Premium outlet shopping Limited-edition shopping Local brand shops Source: SERI, Nielsen Korea, KOLEC
What are they looking for? Leiports Surfing, Trekking, Marathon (young and active market) Golf, Hiking (senior market) Culture & Festivals Cultural experiences Signature festivals and events Museum/Gallery Tour Healing/Wellness Escape from workplace Massage, Luxury spa Eco-tour Source: SERI, Nielsen Korea, KOLEC
Working with Travel Trade Partners
Key Travel Agent Partners in Korea Air Ticket Sales (All destinations) Top 10 Travel Agency to Hawai i No Travel Agency No Travel Agency 1 Hana Tour 2 Interpark Tour 3 Mode Tour 4 Online Tour 5 Sejoong Tour 6 Redcap Tour 7 Top Travel 8 YB Tour 9 Hanjin Travel 10 Tour 2000 Source: BSP 1 Hana Tour 2 Mode Tour 3 Interpark Tour 4 Hanjin Travel 5 Very Good Tour 6 Lotte Tour 7 YB Tour 8 Lotte JTB 9 Honeymoon Resort 10 Redcap Tour Source: Hawai i Tourism Korea
Purchasing Travel & Seasonality Booking Window/Lead Time Shorter booking window for leisure travel at 1~3 months MCI Travel: 6 ~ 18 months Seasonality by Market Segment FIT/Family Market Jul & Aug, Dec & Jan (Summer & Winter Break) Honeymoon Market Mar to Jun, Sept to Nov (Spring/Autumn) MCI Market Apr to Jun, Oct to Nov (Shoulder Season) The separation between off-peak and peak season is gradually disappearing as tourist travel on off-peak season travel is on the rise Specials/campaigns can be introduced at anytime
Know your Travel Trade Partners Tips for Hawai i Partners Koreans like it All-Inclusive Specials often times mean exclusive Leverage short-term booking windows for your slow periods Build relationships (agents are dealing with the whole world, not just Hawaii) Have high-res photos available for travel agencies/media
2015 & Beyond Things to Lookout or Consider or 2015 & Beyond Increase in airlift Millennials vs. Generation X vs. Baby Boomers Online and Mobile Bookings MCI Travel Exchange Rate: Weakening of KRW against USD
Mahalo & 감사합니다!