|July 19, 2012|
South Korean Travel Industry Poised To Realise 2012 Growth Potential According To Amadeus
|In late 2011, leading industry experts including Amadeus, a leading transaction processor and provider of advanced technology solutions for the global travel and tourism industry, predicted a big year for South Korea's travel industry in 2012. Just halfway into the year, a number of market indicators are reinforcing Amadeus' belief that the outlook for the South Korean travel sector remains strong, with South Korea's government and travel players making strategic investments to drive growth. |
David Brett, President of Amadeus Asia Pacific, said South Korea has announced several aggressive new initiatives to make the most of their momentum.
"South Korea's travel industry is taking strategic steps to ensure that it capitalises on every opportunity for growth in 2012. Increased travel between South Korea and China and more competitive travel prices will provide an important boost in traveller numbers, but that in turn will put added pressure on infrastructure. South Korea has been smart to ensure that infrastructure investment is a priority and that technology plays its part to facilitate the industry's growth," said Brett.
According to Brett, four key factors will boost South Korea's travel industry growth further this year:
1. Strategic Focus On Chinese Visitors
In late June, the South Korean government introduced revised visa regulations to make it easier for Chinese travellers to obtain entry into the country. With new streamlined processes, more Chinese will be able to make their way south more often. Multiple-entry visas will allow travel to South Korea for five years, up from the current one year. And in parts of Seoul, retailers have started accepting yuan from Chinese travellers. The Shinsaegae Department Store's main branch in downtown Seoul has introduced this new service, and more retailers in the capital are working with Chinese bankcard association UnionPay. With these and other new initiatives, South Korea aims to attract one million Chinese tourists this summer.
2. Investment In Travel Infrastructure
The South Korean government has been actively promoting tourism and is working with the travel industry to invest in new travel infrastructure. Travel & Tourism investment in 2011, including purchase of new aircraft and construction of new hotels, hit KRW7,600bn (about USD6.7bn), making South Korea the world's 19th highest investor in tourism last year. This figure should rise by 4.8% in 2012, and by 5.0% p.a. over the next ten years to just over KRW13,000bn in 2022. Korea's national carriers have announced their intentions to overhaul passenger IT in partnership with Amadeus, to more efficiently manage the higher travel demand. And TOPAS, the leading provider of advanced technology solutions for Korean travel agencies, is also working with Amadeus to develop a next-generation technology system for travel professionals. This new system is expected to be complete by early 2014, and will provide Korea's most advanced reservation platform yet.
3. Increased Competition Driving Lower Prices For Domestic And Outbound Travel
Competition between domestic airlines is heating up as they target passengers for the Korea-China flight route, especially with more Low-Cost Carriers now flying to China. And with restrictions on foreign-owned travel agencies lifted, more international operators are setting up shop, creating a more competitive travel agency environment. This means competitive prices for travellers and more South Koreans taking to the skies more often. A recent survey by Amadeus revealed that Seoul-Jeju was the world's busiest inter-city flight route in 2011, helped by the rise of Jeju's profile as a choice destination and more competitive travel prices.
4. Digital Platforms As A Channel For Information And Transactions
South Korea is making great leaps in digital technology platforms that deliver both information as well as a new booking channel for travellers. It makes sense that South Korea should be a leader in this field, with its high Internet penetration encouraging the growth of online shopping. The mobile travel market is also expanding with a growing number of travel applications emerging. TOPAS, the leading provider of advanced technology solutions for Korean travel agencies, recently launched its mobile platform to help Korean travel agents stay more connected with their clients during their trips.
"South Korea has made some key strategic investments that will help to support travel growth in 2012 and for the years to follow," said Brett. "Healthy competition, opportunities in the Chinese market and the right technology will all play a role in South Korea's travel performance in 2012 and beyond."