Overseas travel resume to accelerate, price competition expected to intensify
It is necessary to lift special travel advisories and simplify diagnostic tests.
An inflection point has come after a year and 10 months of living a limited life due to COVID-19. This is because from November 1, we will begin a gradual recovery of daily life (with Corona). The number of private gatherings will increase and the use of facilities such as restaurants and cafes will be free. We looked at the changes in inbound/outbound and domestic travel that will appear after November according to the new daily life. <편집자주>
Even if the first phase of the gradual recovery of daily life (with Corona) is implemented in November, there is little change in policies related to overseas travel. Nevertheless, the message from With Corona is expected to awaken the consumer sentiment for overseas travel and broaden the scope of the travel industry.
You can read that expectation in package tour reservations. In the case of Yellow Balloon and Very Good Travel, about 2,000 customers are expected to depart from Europe alone by the end of the year, and if Saipan and Guam are included, the number is estimated to be 3,000 to 4,000. If the period is extended to start in 2022, between 10,000 and 20,000 consumers have booked package products. A very good travel official said, “European package products that actually generate profits are departing every week, so it’s definitely different from when you made a reservation.
Major travel agencies are preparing for with Corona with various changes, and they seem to be focusing on differentiating package products in particular. Hana Tour applies ‘Product 2.0’ to Hana Pack Premium and Hana Pack with three key keywords: ▲ freedom of shopping, ▲ peace of mind, and ▲ schedule quality. Shopping and travel destinations focus on ‘local’. It is planned to reflect the shopping malls frequented by locals and the latest hot places, and to provide optional tours at reasonable prices. Kyowon KRT is focusing on ‘Only KRT’ to launch products that are different from existing packages. We are preparing package products that provide a differentiated experience targeting the MZ generation, and are also developing a new global flight reservation system.
In addition to the activities of these industries, the environment and support such as opening Asian borders and simplifying immigration procedures are also important. Japan, China, and Southeast Asia account for more than 70% of Korea’s overseas travel market (as of 2019). It is no exaggeration to say that the success or failure of 2022 depends on the travel environment of these countries.
In addition, policy support is needed, such as lifting special travel advisories and simplifying corona diagnosis tests after entry. The special travel advisory, which has been extended until November 13, is also inevitable to change in line with With Corona. Most of the currently travelable regions, such as Singapore and Saipan, as well as Europe and Dubai, have similar or higher vaccination rates than Korea, and there is no significant difference in the number of confirmed cases. In addition, when the complete vaccination rate for Koreans is over 80% and the corona situation stabilizes, the industry is expected to demand simplification of immigration procedures. Currently, PCR tests are required on the 1st and 6th to 7th days after entry, but the PCR test can be replaced with a rapid antigen test as in the case of the UK.
With Corona as the starting point in November, fierce competition among travel agencies, travel platforms (OTA) and online malls to preoccupy the overseas travel market is expected to intensify. The domestic travel industry is struggling to regain the initiative it gave to global OTAs, and Yanolja and Yeogieotte native platforms are entering the overseas travel market in earnest. In addition, online malls such as Naver, SSG.com, and Coupang are expected to be aggressive. Accordingly, price competition to secure customers rather than profitability is expected to be fierce for the time being.
Reporter Lee Seong-gyun [email protected]
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