MARKET TRENDS
Trends in Travel -Overseas
According to a Gallup Korea survey commissioned by Korea Tourism Organization targeting one thousand men and women over the age of 18, from 2011-13, overseas travel consisted of Individual Trips (40%), followed by Full Packages (38%), Air and Hotel Reservations (13%), and Compromised Packages (8%). But when questioned on future travel preferences, respondents noted greater interests in Individual Trips (37%), a sharp decline in Full Packages (from 38% to 32%), followed by significant increase in preference for do it yourself itineraries, such as Air and Hotel Reservations (18%) and Compromised Packages (13%). These figures depict a sharp demand for more “freedom” in their trips vs. the historic market reliance on fully controlled GIT packages.
Public mindset change
The general perception of overseas tours that was largely anchored on “sightseeing” is becoming a relic of the past. During Korea’s early years, traveler aspirations were rooted in discovery of established icons, checking off the boxes for as many destinations as possible. Today’s traveler is mature, with multiple overseas trips in their passport. They seek quality, lifestyle experiences with control of their itineraries, and are increasingly adverse to organized package tours. This paradigm shift in travel is not limited to the younger FIT segment, but rapidly expanding into the older generations who grew up on package travel, as well.
Back Pack Generation
Overseas travelers in the 40+ age group have been one of Korea’s most prolific growth engines over the past 5 years. In the last three years alone, the number of travelers in their 40s and 50s skyrocketed by 40.7% and 42%, respectively. In addition, 35% of this age group travelled on compromised or fully independent trips. This market segment is part of the first “backpack generation” that launched the FIT student travel phenomenon 20-30 years ago. Today they have the disposable income and time to follow their leisure pursuits around the world, and demand “do it yourself” types of products, spending longer days per trip, overseas.
Young Professionals
The mainstream FIT generation is in their 20s and 30s, and is experiencing the post-recession repercussions of a hyper-competitive working environment. They are increasingly seeking escape (or “healing”) from their environment, albeit temporary. Dubbed by the media as the “Burn-out Syndrome” caused primarily by working overtime and excessive workload, this social phenomenon is influencing young professionals to seek destinations further afield and holidays that are designed to “rest” and “relax” in hopes of refreshing their bodies and souls. In a study released by Expedia Korea, 74.5% of Korea’s working class were planning to travel in 2014 and 49.3% responded that they sought healing through travel.
Mobile Singles
One in three households in Korea are expected to be a single person in the 2016 Census. The increase in singles is a universal phenomenon, and their number is growing explosively in Korea. Singles have long found a way to keep themselves entertained, but they have now emerged as a powerful consumer segment being targeted by everything from consumer electronics to real estate and travel. They do not have the burden of family ties and are independent in nature, adding fuel to the FIT growth trend.
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