Hospitality sector resurgence: riding the Korean Wave to global prominence
Empowering small accommodations: the collaborative role of online travel agencies in the local tourism Industry
Where else could you catch a hyperfast train from an ancient royal palace to a coastal paradise, lose yourself in a night of karaoke and stay in a hotel with 600-year-old underfloor heating? From the irresistible appeal of K-pop to the majesty of Joseon dynasty architecture and the stunning scenery of Jeju Island, South Korea is a unique destination on the bucket list of travelers from around the world.
We’ll take a look at what makes this crucial cog in the Asia Pacific (APAC) travel and tourism ecosystem so enigmatic, and look at how online travel agencies (OTAs) are supporting South Korea’s growth as a global tourism hub.
An Asia Pacific jewel
South Korea welcomed 17.5 million international arrivals in 2019 and tourism directly contributed to 2.5% of national GDP. Visitors spent a record $21.5 billion, averaging about $1230 per traveler. We’re using 2019 as the benchmark for travel and tourism statistics because of the unprecedented impact that coronavirus had on the industry.
But South Korea is rapidly regaining its status as a global travel destination — over 900,000 tourists visited the country in January and February 2023, a 400% increase on the same period in the previous year. And growth in the tourism sector will continue to outpace the national economy for the next 10 years, boosting the sector’s contribution to GDP by ₩116.9 trillion ($89.6 billion).
The Korean Wave is taking the world by storm
South Korea is cashing in on a cultural phenomenon known as Hallyu, the Korean Wave. It refers to the widespread popularity of South Korean culture across the world, driven initially by K-pop stars like BTS and Psy but now encompassing South Korean television, fashion, literature and food. The pursuit of Hallyu provides tourists with a rich, immersive experience that connects them with centuries-old traditions while indulging in modern entertainment and gastronomy — a blend that is uniquely Korean.
Another main draw is the fact that South Korea’s advanced technology integrates seamlessly with its tourism infrastructure. From superfast internet speeds to high-speed trains running at up to 330 kph and futuristic amusement parks like Gyeongnam Masan Robot Land, South Korea’s commitment to technological innovation offers tourists a glimpse into a hyper-modern society and makes it easy for them to experience everything the country has to offer.
A surge in the popularity of medical tourism also contributes to the unique makeup of South Korea’s travel sector. The country is rapidly becoming a global hub for plastic surgery, skincare, and wellness therapies, attracting patients worldwide seeking quality care coupled with a rejuvenating vacation. 2.76 million medical tourists visited South Korea in the decade from 2009 to 2019 and contributed ₩3 trillion ($2.3 billion) to the economy.
Supporting tourism from the inside out
Small independent accommodation providers like traditional hanoks are stars of the South Korean travel scene. Hanoks are Korean guest houses that first appeared in the 14th century during the Joseon dynasty. Their design is a direct response to the distinct seasons of the Korean Peninsula — they have traditional underfloor heating to make harsh winters more comfortable, and a cool wood floor hallway called daecheong which increases airflow during hot summers.
Hanoks and other traditional accommodations have a lot to offer their guests and they work with OTAs to put themselves on the map. At one end of the spectrum are local Korean OTAs who are particularly important supporters of small South Korean providers because they understand the unique cultural expectations of South Korean travelers — more than half (65%) of OTA bookings in South Korea are with local OTAs. It’s customary, for example, for accommodations to give away complimentary items like toiletries or vouchers for local bars. Local OTAs plug themselves into these local ecosystems and support the tourism sector from the inside.
On the flipside, international OTAs step in to support South Korean SMEs in their efforts to advertise to global travelers. Research from Oxford Economics confirms that OTAs help to attract a greater number of visitors to South Korea from international origins. In 2019, 31% of people who booked South Korean accommodation through OTAs came from outside the APAC region compared to just 22% of those who booked through other channels.
“Local OTAs are only available in Korean. It is very convenient to work with international OTAs, as it allows us to connect with international guests despite language barriers.” Small accommodation at tourist destination, South Korea
OTAs also help South Korean providers to attract a more diverse range of international travelers from places like Western Europe and the Middle East compared to the whole market. OTAs act as a trusted intermediary for both customers and accommodations, helping to bridge cultural and linguistic divides and make it easier for international travelers to experience South Korea.
The benefits of using OTAs aren’t just limited to bookings made through these platforms. Research by EY-Parthenon suggests that a significant number of customers who booked to stay in South Korean accommodations used OTAs to browse the market before booking directly with providers.
“[Using OTAs] has at least doubled our sales. We are of course selling many rooms through OTAs but, funnily enough, direct bookings have also significantly increased since we started using OTAs.” Medium-sized holiday resort, South Korea
Riding the Korean Wave
South Korea is a major player in the APAC tourism scene. Diverse experiences underpinned by a commitment to technological advancement are helping the country ride the Korean Wave to success. As a small part of this travel ecosystem, Booking.com is proud to support South Korean travel businesses on their journey.
