Visa Tourism Outlook Skorea

7/27/2019 Visa Tourism Outlook Skorea

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1

South Korea experienced solid growth in tourist arrivals in 2010, up 12.5 percent to

8.8 million. This growth looks set to be on track to achieve the Korean Government’s

objective of 10 million visitors by 20121. The Government has also eased visa

regulations for tourists from 11 South Asian countries2

in a bid to attract more visitors.

Korean Tourism Organisation (KTO) is closely supporting this growth, initiatingpromotions like the two-year, government-sponsored “2010-2012 Visit Korea Year”

campaign and the “Smile Campaign” featuring popular Korean actor, Bae Yong-joon. Further, Asiana

Airlines, whose headquarters are located at Incheon International Airport, rolled out the “Grand

Welcome” campaign, with staff warmly welcoming tourists at their department airport as well as on

arrival in Korea.

This rosy outlook is supported by a 13.7 percent year on year increase in spending by international

Visa cardholders in South Korea to $1.7 billion, as payment card acceptance continues to grow.

As part of Visa’s commitment to contributing market intelligence to the global tourism industry, I am

very pleased to present the first Tourism Outlook: South Korea. This report uses actual Visa card spenddata to aggregate information about visitors – where they are coming from, how much they are

spending and what they are buying.

As the world’s largest retail electronic payments network, Visa is in a unique position to provide

insight into where and how visitors are spending their money. Our proprietary processing network

allows us to analyse Visa data to identify global tourism spending insights and provide useful market

data and intelligence to businesses to improve product offerings and marketing strategies that can

best attract visitors and strengthen tourism competitiveness.

Turning Visa transaction data into useful business information is one way Visa delivers value to

businesses and countries where tourism sectors are strong contributors to the domestic economy.

Visa’s role in tourism the world over is ensuring travellers can make purchases and payments securely

and conveniently.

South Korea, along with China and Japan, has pledged to support ASEAN’s five-year tourism strategic

plan 2011-20153

to promote intra-ASEAN tourism marketing, to develop tourism products, to improve

quality tourism, to build human resources development, and to attract investments for the sector. We

support South Korea’s tourism goals and its inter-regional approach to promoting tourism, and look

forward to working with South Korea by facilitating safe and secure electronic payments.

Jim Dixon, Country Manager, Korea, Visa

1Korean Tourism Organisation

2Includes Myanmar, Cambodia, Sri Lanka, Indonesia, Laos, Nepal, Pakistan, Philippines, Vietnam, India and Bangladesh

3Global Times, “China, Japan and South Korea support ASEAN’s tourism plan,” 19 January 2011









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While Japan remained the number one source market of international

visitors to Korea in 2010, overall spending fell 2.5 percent year on year to

$610.6 million. Of the top 10 merchant categories, Korean department stores

experienced the greatest fall of 43.2 percent, but still attracted $24.5 million

in Japanese spending. A potential reason behind this drop could be that in

2009, the Korean Won was relatively weak and therefore Japanese touristswho benefited from the stronger Japanese Yen showed greater levels of spend

in peak shopping seasons such as the Korea Bargain Sale.

Neighbouring Japan



6

The “other travel and entertainment”10 category

represented the greatest proportion of overall

Japanese visitor spending, yet recorded an

eight percent decline year on year to $322.1

million. The average spend in this category also

fell 5.1 percent to $227.21.

Accommodation, restaurants and discount

stores all recorded solid growth during 2010.

Japanese visitors spent $84.2 million on

accommodation during the year, up 30.1

percent on 2009. Restaurants also benefited

from solid Japanese spending, rising 18.1

percent year on year to $20.9 million, with the

average amount spent per transaction

increasing by 2.9 percent to $62.64 compared

to 2009. This rise in restaurant spending couldbe attributed to the global online campaign

called “buzz Korea”11, which is promoting

Korean food culture to audiences around the

world.

Discounts stores recorded a healthy growth in

spending of 17.6 percent to $4.5 million, yet theaverage transaction amount fell marginally by

1.7 percent to $61.90. Spending in department

stores fell by 43.2 percent year on year to

$24.6 million, and the average transaction

amount declined by 28.7 percent to $171.75.

The bill pay12 merchant segment also

experienced solid growth with Japanese

spending, which rose 19.5 percent year on year

to $8.1 million. The average Japanese spend in

the bill pay category also rose, up 9.6 percent

to $125.84.

Other travel & entertainment –8%

Accommodation +30.1%

Other retail +11.1%

$14.4M

$15.4M

$17.7M

$20.9M

$43.3M

$24.6M

$38.7M

$37.2M

$64.4M$71.6M

$64.8M

$84.2

$350.1M

$322.1M

$10.5M

$10.7M

$6.7M

$8.1M

$3.7M

$4.5M

Remaining merchants –4.1%

Department stores –43.2%

Restaurants +18.1%

Airlines +6.5%

Health care +1.5%

Bill pay +19.5%

Discount stores +17.6%

Source: VisaVue Travel Data: 2009 - 20102009 2010

10Includes buses, boat rentals, airport purchases, duty free, home furnishings, catering, bars, casinos, golf courses, etc

11Travidition, “Korean tourism collaborates with TV and YouTube personalities,” 29 March 2011

12Includes courier services, warehousing/storage, telecommunications services, internet services and utilities, etc

Other travel & entertainment –5.1%


Other retail –3.6%

$298.12

$315.92

$60.87

$62.64

$241.02

$171.75

$288.69

$290.27

$99.88$96.33

$221.11

$264.78

$239.41

$227.21

$251.35

$273.03

$114.78

$125.84

$62.97

$61.9

Remaining merchants +0.5%

Department stores –28.7%

Restaurants +2.9%

Airlines +6%

Health care +8.6%

Bill pay +9.6%

Discount stores –1.7%




The autumn months of October and November

attracted the most significant international

spending, according to VisaVue data. In

October, international visitors to Korea spent

$170.3 million on Visa cardholders and $168.7

million in November. This was supported by

visitor numbers recorded by the Korean Tourism

Organisation (KTO), which saw an 18.3 percent

year on year growth in October visitors to

872,550 and a 14.9 percent increase to 738,271in November.

This time of year is considered to be when

Korea is at its most beautiful, with perfect

temperatures, blue sky days and the autumn

foliage in full bloom13

. Most of the local districts

hold annual festivals which are attended by

numerous foreign tourists.

While October 2009 was the favourite month

for visitors according to the KTO, which

recorded 737,373 visitors, VisaVue data

recorded the most spending in 2009 during the

month of December ($141.5 million). Looking a

year later, VisaVue data tracked visitor spending

in October 2010 grew 24.9 percent year on year

to $170.3 million, while year on year growth for

December only grew 9.6 percent to $155.1 million.

7

Seasonal Visitors

13Destination 360 website, South Korea Travel

January –6.3%

February –4.2%

March +6.3%

609,258

754,672

530,506

718,440

574,559

729,450

688,586

730,365

724,117

769,894

666,928

638,911

607,659

569,453

695,880

833,693

678,691

764,693

737,373

872,550

April +6.1%

May +27%

June +35.4%

July +23.9%

August +19.8%

September +12.7%

October +18.3%

642,672

738,271

November +14.9%

661,304

677,366

December +2.4%

Source: Korea Tourism Organisation2009 2010







10

International visitor spending on accommodation

grew 33.8 percent to $283.9 million during

2010, while spending with Korean travel

agencies grew 31.2 percent to $7.7 million.

Yet the “steamship and cruise lines” merchant

category recorded an 18 percent fall in spendingto $44,056 in 2010.

During 2010, international visitors increased

spending in the healthcare category by 31.6 per

cent to $49.5 million, and spending at drug

stores and pharmacies increased by 20.8

percent to $2.7 million.

These VisaVue healthcare spending statistics

support the research report by global market

research company RNCOS that suggests South

Korea is emerging as a popular destination for

medical tourism, predicting that medical

tourist arrivals in South Korea will grow around

42 percent during 2009 to 2012.16

Indeed

foreign visitors especially those from Japan

and China, have been noted to visit South Korea

to get beauty treatments and to enjoy spa

facilities.17

16RNCOS, “Emerging Medical Tourism in South Korea,” 23 November 2010

17Reuters, “In crisis, South Korea hot spot for nose jobs,” 3 April 2009

18Includes railroads, marinas, ATMs, financial institutions, insurance, money transfers, etc

17,771,704

23,289,197

37,592,798

49,470,952

212,158,913

283,971,373

5,929,095

7,777,148

18,557,999

23,724,767

191,874,725

242,800,542

Other emerging15

+85.8%

Toll and bridge fees +84.7%

Wholesale clubs +60.8%

1,189,173

1,696,725

43,851

70,530

2,817

5,203

3,074,634

5,713,607

QSRs +42.7%


Healthcare +31.6%

Bill pay +31%

Travel agencies +31.2%

Discount stores +27.8%

Remaining merchants18

+26.5%

63,658,385

78,509,510

Restaurants +23.3%

3,546,478

4,302,360

Oil +21.3%

3,425,585

4,174,744

Auto rental +21.9%

2,239,743

2,705,103

Drug stores & pharmacies +20.8%

172,229,433

209,664,130

Other retail19

+21.7%










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Visa Tourism Outlook Skorea