Working in Market - South Korea

Distribution system and key trade partners

The South Korean travel distribution system is intricate, with consumers leveraging both traditional and online channels. While traditional wholesale, retail, and online travel agencies (OTAs) blend in South Korea, the market is evolving towards a flexible, direct-to-consumer approach for booking.

Distribution highlights

• Market structure: South Korea’s market is divided between group travel (30%) and a rapidly growing FIT segment (70%). FIT travelers frequently book components individually, such as flights, accommodations, and attractions, reflecting their shift from traditional packages to flexible itineraries.
• Wholesalers and retail agencies: Major agencies like Hana Tour and Mode Tour dominate as wholesalers and large retailers, while Yellow Balloon (YB Tour) and Very Good Tour focus primarily on the retail space. Hana Tour, the largest agency, is transitioning from wholesale to direct consumer booking through an enhanced online system, aiming to reduce retail commissions and target the FIT market.
• Retail agents: Key retail players such as Lotte Tour, Hanjin (KAL Tour), Kyowon Tour, and Doctor Tour offer tailored packages and increasingly use celebrity marketing and TV commercials to enhance brand awareness. Commission rates for retail agents generally range from 9% to 20%.
• Online presence and OTAs: OTAs like Interpark Tour and My Real Trip lead in online bookings for FIT and corporate travelers. Interpark, integrated with Yanolja, now facilitates seamless mobile bookings for flights, accommodations, and tours, driving growth in FIT travel. Tide Square (known for “PRIVIA Travel” and “Tourvis”) has developed strong partnerships with credit card companies, targeting affluent travelers.

Consumer travel planning and booking patterns

Korean travelers extensively plan their trips using a multi-channel approach, consulting a combination of friends, online reviews, and social media platforms such as YouTube. Given the diversity and distance of Australia’s offerings, they often prioritize convenience and seek deals and recommendations across various channels.

Insights into consumer behaviour

• Trip research and inspiration: Social recommendations are vital, with four in ten Koreans influenced by family and friends during trip planning. YouTube is the leading online source, complemented by OTA and travel agency sites, and personalized content platforms are increasingly relevant.
• Booking preferences: Despite growing direct airline bookings (47% as of 2024), travel agents still handle a significant 50% of air bookings. Consumers appreciate multi-channel booking options, with many choosing OTAs, retail agents, or direct channels based on convenience and price.
• Trip planning specifics: The majority of travelers (70%) pre-plan most details, including transport, accommodations, and attractions, while itineraries are generally shorter for Australia at around 17 nights compared to other international destinations. Korean travelers tend to book closer to their travel date, especially for short itineraries, with a typical lead time of 2-3 weeks.

Traveller characteristics and travel preferences

South Korean travelers to Australia are predominantly first-timers, with varied demographics. Cities remain the primary focus, although demand is growing for niche and experiential travel, particularly among younger and high-yield travelers.

Visitor profile highlights

• Demographics: Approximately 78% of Korean visitors to Australia are first-time travelers, with an age distribution favouring those under 40 (452%), though a notable 33% are over 50.
• Popular destinations: Sydney is the most visited destination, with 39% of holiday visitor nights, followed by Brisbane and Melbourne. Korean travelers favor cities for their familiarity and convenience, with limited time spent in regional areas.
• Special interests: Interest in niche experiences—luxury, bushwalking, golf, and campervan travel—is rising, especially among FIT travelers seeking tailored experiences. This demand is supported by specialty agents and FIT-focused platforms, showcasing Australia’s natural and adventure offerings.

Challenges and opportunities in selling australia

South Korea’s market poses unique challenges due to price sensitivity and ETA visa procedures, yet there are significant opportunities for diversified offerings and improved digital engagement. The heavy reliance on commissions continues to shape revenue for travel distributors, yet service fees and bonuses are on the rise post-pandemic.

Key challenges

• Price sensitivity and airfare costs: Korean consumers are highly price-sensitive, especially regarding group travel. Group tours and packages are often affected by seasonal airfare surges, making price a primary factor in decision-making.
• Visa access and process: Korean travelers experience friction with Australia’s ETA system, which lacks full multi-language support and requires English for mobile applications.
• Limited regional exposure: With most Korean tourists concentrating on Australia’s major cities, there is an opportunity to introduce diverse regional experiences to cater to high-yield travelers and repeat visitors.

Strategic opportunities

• Enhancing digital and direct channels: As Korean travelers become more comfortable booking directly with airlines and hotels, Tourism Australia and partners can optimize these channels with targeted promotions and mobile-friendly booking platforms.
• Promoting regional and seasonal experiences: Highlighting Australia’s off-peak seasons and less-visited regions can help mitigate peak travel costs and offer Korean travelers unique experiences that differ from urban settings.
• Leveraging the Aussie Specialist Program: Over 1,400 Korean agents have engaged with the Aussie Specialist Program, including 10 Premier Aussie Specialists, equipping them to promote Australia’s offerings more effectively. Reinforcing this network and enhancing ongoing training will ensure that frontline agents remain well-informed about Australia’s products.

Strategic insights for a growing market

The South Korean market is a crucial contributor to Australia’s tourism landscape, marked by resilient demand and evolving consumer preferences. To capitalize on this growth, it is essential for trade partners to support digital engagement, enhance product diversity, and address challenges like visa processing and price sensitivity. By leveraging a mix of online channels, trade education programs, and direct booking incentives, Tourism Australia and its partners can appeal to Korean travelers’ evolving preferences and further strengthen Australia’s standing as a premier destination.

Planning a visit to market

Top tips for sales calls

• The South Korean travel trade generally prefer visual materials as well as collateral in Korean language.
• It is helpful to have an interpreter 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 icebreaker during meetings.
• The best time for sales calls is March to April and mid-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, you can refer to ATEC’s Tourism Export Toolkit.