Korea Monthly Activity Report - the California Tourism Industry Website

Market Conditions
A. Korea Economic Overview
Korea Monthly Activity Report
Visit California Korea
January 2012
Prepared by: AVIAREPS Marketing Garden Korea
Korea’s export growth is gradually slowing down and domestic demand has weakened
slightly.
Industrial production in November decreased compared to the previous month. Mining &
manufacturing production recorded an overall drop of 0.4%, influenced by drops in
semiconductor and automobile production.
Indicators showed moderating growth in private consumption and weakening consumer
sentiment for November. The retail sales index registered growth of 0.5%, down from the
previous month (2.2%), and declining 0.6% on a month-on-month basis.
The trade balance in December recorded a surplus of US$4 billion, the third consecutive
monthly surplus of large proportions. Exports registered a growth rate of 12.5%, falling
slightly against the previous month (13.8%) and indicating a slight decline in the pace of
growth.
In December 2011, foreign exchange and interest rates showed similar fluctuations to the
previous month, while stock prices declined. The KRW/USD exchange and interest rates
also underwent similar fluctuations to the previous month. The KRW/USD exchange rate
rose to 1,153.3 won as of end-December, similar to the previous month.
A. Outbound Travel Market
According to the KTO (Korea Tourism Organization), the number of Korean outbound
travelers in December was 1,020,648, a decrease of 0.1% compared to the same month in
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2010. The total number of Korean outbound travelers from January to December was
12,693,703, up 1.63% from the same period in 2010.
According to the Office of Travel & Tourism Industry (OTTI), the number of Korean
visitors to the U.S. in October was 89,544, a decrease of 1.7% compared to the same month
in 2010. The total number of Korean visitors to the U.S. from January to October reached
966,632, an increase of 3.5% compared to the same period in 2010.
B. Competitive Environment
According to Hana Tour, the largest wholesaler in Korea, Phuket ranked the highest in
terms of market share for the honeymoon market, representing 23.9% of all honeymoon
tour reservations made through Hana Tour during 2011. Philippines (16.4%) ranked
second and Hawai‘i (7.4%) ranked third. Hawai‘i however ranked first among long-haul
destinations. Reasons why Phuket is most popular are 1) variety of accommodation, and 2)
affordable honeymoon packages.
Hong Kong Tourism Board conducted New Year’s reception on January 17 where they
celebrated receiving one million Korean visitors to Hong Kong in 2011 and announced a
new tourism slogan, ‘Asia World City’. HKTB will also hold a destination workshop at the
end of January and a MICE FAM trip in February.
Switzerland Tourism held their reception on January 17, and announced they’re going to
launch a mobile application soon that offers extensive destination contents. Approximately
130,000 Koreans visited Switzerland in 2011, and Jungfrau, Zürich, Luzern, Geneva are
popular cities among Koreans.
E-Land Group, a Korean firm, acquired two major reso..rts in Saipan. They signed a deal
to acquire Pacific Islands Club Saipan and Palms Resort Saipan. E-Land Group is not only
one of the biggest fashion and retail firms in Korea, but it also has major business interests
in hotels, condominiums, and construction.
C. Consumer Trends
SERI (Samsung Economic Research Institute) announced some major trends in 2012.
1. Distress in the Korean economy and sluggish domestic demand
2. North Korea after Kim Jong Il: Instability still remains
3. Changes in political landscape ahead of presidential & general election
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D. Travel Trends
4. The entry of general cable TV broadcasters in 2011 ended a decades-old
monopoly by three terrestrial broadcasters and triggered heated competition for
differentiated service and content to viewers. KBS, MBC, SBS (three terrestrial
broadcasters) + jTBC, Channel A, TV Chosun, MBN
The Korea Travel Times, a travel trade weekly newspaper with 65,000 copies, announced
what they forecast to be Korea’s 7 major travel trends in 2012.
1) Culture: Combination of popular culture & tourism
2) Edutainment: Family travelers are focusing on education and entertainment elements
3) Soul: Healing and Meditation Tourism
4) Smart: New lifestyle with smart phone and social network service to affect tourism
industry
5) Dream: People are interested in once-in-a-lifetime travel experiences even if the price is
high
6) Fair: Travel Fairs are becoming popular
7) China: China tourism market is stronger.
For Korean MICE overseas travelers, Redcap Tour, one of the major travel agents in Korea,
opened their own business travel website http://biz.redcaptour.com in January. The website
includes their nationwide network along with company information, and they are having a
movie preview event inviting MICE travelers who register on Redcap Tour’s website from
January 20 to February 9.
E. Media Trends
Figures released by the Korea Communications Commission showed the number of smart
phone users slightly exceeded 20 million, with 10 million of them subscribing to SK
Telecom Company, the country’s top mobile service provider, 6.8 million to KT Corporate
and 3.3 million to LG Uplus Corporate. Passing the 20-million mark also meant that over
80% of the country’s economically active population of 25 million signed up with wireless
service providers.
According to a survey conducted by the Korea Communications Commission and the
Korea Internet and Security Agency, 42.4% of respondents said that the internet and
mobile apps were the main purpose for owning a smart phone. Voice calling was the
priority for 39.3% of users, while text messaging was the main use for 18.3%. On average
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the 4,000 respondents aged 12~59 spent 87 minutes per day surfing the web on portable
devices. Mobile Shopping on smart phones also increased steeply to 47%, up 30.1% from
July last year. Nearly half of the users performed banking transactions with the device,
reflecting the increasing role smart phones play in economic activities.
Industry experts forecast the smart phone market would be the fastest growing sector in
Korea’s already-saturated wireless service market as service carriers focus their efforts on
offering much faster and larger data streaming long-term evolution (LTE) services for their
early-adopting customers.
F. Airlift
Thai Airways will operate direct flight services between Incheon and Los Angeles 4 times a
week from May 1, 2012. Asiana Airlines officially announced that it will operate daily
direct flight services between Incheon and Honolulu starting July 21, 2012. Asiana Airlines
currently operates regular direct flights to Hawai‘i twice a week departing on Thursday and
Sunday from Incheon International Airport.
According to the Transport Ministry, the number of Koreans using low-cost airlines
surpassed 10 million for the first time last year as more people take advantage of affordable
air travel. The figure reflects a 32.5% on-year surge. Combined market share of the
country’s five budget carriers - Jeju Air, Air Busan, Jin Air, Eastar Jet and T’way Air -
jumped to 16.5%, up 3.3% points. In stark contrast, the number of air travelers rose merely
4.8% during the period to about 49.1 million, which includes those flying with Korean Air
and Asiana Airlines. To hedge against skyrocketing fuel prices and revenue shortfall, the no-
frills carriers are increasingly steering overseas now via 25 international flights. More than
1.8 million people flew abroad with them in 2011, doubling their collective stake on-year to
4.3% in that segment. Industry analysts project the ratio will reach 15% in a few years.
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I. ACTIVITY UPDATE
A. Travel Trade Marketing
A-1. Major Sales Calls
Visit California Korea conducted sales calls to the following key Korean travel trade and
marketing partners in this month to negotiate and seek California tourism promotional
opportunities.
Lotte JTB: Since a special episode of BH
Lee’s visit to Napa Valley is soon to be
launched on the microsite, VC Korea is
negotiating with Lotte JTB to develop an
attractive tour package that reflects BH Lee’s
itinerary. The package will be promoted
through Lotte Group’s marketing channels,
including Lotte Department Stores, Lotte
Credit Card, and Lotte JTB. Upon developing
the tour package, VC Korea will also
introduce the product with call-to-action information on our microsite to generate sales.
In addition, in order to maximize sales of the recent TV home-shopping program we
conducted with Lotte JTB, VC Korea developed California poster and had it displayed in
Lotte JTB’s Lotte World Department Store branch, which is the busiest branch with the
most consumer traffic.
Thai Airways: Thai Airways officially announced that it will operate its flight service of
"Bangkok-Seoul-LAX" from May 1, 2012. Since it will be additional direct flights to LAX,
it will be a good opportunity to increase the number of visitors to California. VC Korea
met with the marketing team to discuss possible tie-ups, such as offering marketing funds
for travel agents who develop new California tour products with Thai Airways and FAM
tours.
Pow Wow: The early-bird registration period of the 2012 Pow Wow ended early this year,
and the number of registered travel agents was only 10 as of January 30. VC Korea sent
Pow Wow Post Fam Tour information to agents who had already completed their
registration to encourage them to book quickly. VC Korea also met with potential travel
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agents such as Segero Tour, Han-Kyul Tour, BT&I, and Lotte Tour, who had previously
expressed interest, to give updated information on the Pow Wow.
All America Tour: All America Tour is a receptive tour operator based in Los Angles
which handles all group tours generated from Asiana Airlines’ consortium package(s).
Currently, the two key receptive tour operators, Samho Tour and Aju Tour, are only
interested in promoting “US West Tour Pac” and are not developing new California tour
packages. VC Korea will help All America Tour to create more attractive California tour
packages by offering marketing funds.
A-2. California Mobile Advertisement with Segero Tour
• Mobile Ads: Advertisements in more than 15
mobile media channels. Mobile apps used included
apps of magazines such as Cine 21(a famous movie
magazine) and Nylon, and related cuisine apps. Ads
were also placed on the mobile websites of online
media such as Chosun Ilbo and Jongang Ilbo.
• Advertisement Period: January 16 ~ February 15
• Target: 20s ~ 30s smartphone (iOS and Android) &
tablet pc users (mainly iPad users)
• Expected ROI
Impressions:10,000,000
Expected Clicks : 80,000
Expected CTR: 0.80%
As Korea is one of the world’s most vibrant markets
for telecommunication, the number of Korean
smartphone users broke 20 million mark at the end of
2011. To maximize on opportunities in the booming
area of mobile communications, VC Korea kicked off
a mobile ad campaign in partnership with Segero
Tour to showcase its California tour products via the
mobile channels of various media. The 15 most
popular media, including Chosun Daily News, Nylon
and Cine 21, were employed to display a California
banner ad, which links to Segero Tour’s California
tour packages and a call to action.
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For the 1 st week, it generated 6,197,657 impressions and 53,906 clicks and is expected to
generate at least 50 bookings for one month.
http://www.textore.com/web/customer/getEventDetail.do?eventSq=1003478
B. Communications
B-1. Media Monitoring (Clippings and Publicity Calendar)
In January, Visit California Korea secured PR coverage in a total of 24 publications, with an
estimated circulation of 16,170,000 and an estimated advertising value of US$ 390,000.
B-2. Press Release Distribution
VCA Korea distributed the following press releases to key media representatives in Korea and
followed up to ensure coverage.
January 2: 2012 California Restaurant Month
[Press Release Summary]
Want a taste of California? Visit a farmers’ market and rub
shoulders with celebrity chefs and foodie insiders as you pick out
the finest organic produce. Step into sleek restaurants serving
innovative, ultra-fresh California cuisine. Taste gelato made with
locally-produced chocolate and toasted hazelnuts, or handmade
cheeses from local farms. Drive down a tree-lined lane to wineries
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in grand chateaus, or relaxed, family-run vineyards where a world-class winemaker chats with
visitors as he pours drinks in the tasting room.
January 10: VC Korea Received Web Award Again
[Press Release Summary]
For the third year in a row, Visit California’s Korean microsite (now
called “California Road”) has earned the highest honor for web
developers and marketers in Korea – the Web Award Korea 2012.
Competing against the likes of other global brands such as Coca Cola,
Starbucks, Samsung Card and Hyundai Motor Company, Visit
California beat more than 600 websites for this annual competition,
which was judged by a panel of online industry experts who evaluate
design, copywriting, innovation, content, interactivity, navigation,
and use of technology.
The award recognized the third phase of Visit California’s Korean
travel microsite (previously called “Hotel California”) for its user
friendliness, engaging content, marketing savvy and creativity. The site has successfully served
as the platform for Visit California’s “California 6 Nights 7 Days” campaign, inspired by a
famous Korean TV reality-variety show, “1 Night 2 Days” where celebrities introduce diverse
places in South Korea. To keep the momentum going on this popular campaign, Visit
California’s Korean office recruited a few celebrities to help promote the diversity of California.
January 10: New Hotel Openings in California
[Press Release Summary]
There are a variety of new hotels opening throughout
California this year. The Annenberg Retreat at
Sunnylands in Rancho Mirage – once the estate of
Ambassador Walter and Leonore Annenberg-- opens
March 2012, incorporating a retreat center, historic
house, education center, art gardens, and solar farm.
Opening summer 2012 comes the new Hilton Carlsbad
Oceanfront Resort & Spa with a prime location
overlooking the Pacific Ocean along Carlsbad State
Beach. Modeling the California Craftsman style, the resort will feature 215 guest rooms,
including 8 suites.
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B-3. Media FAM
(1) Mr. BH Lee’s California Winery Tour
Visit California Korea coordinated the Pan-Asia Media
Project with Mr. Byunghun Lee, a Korean movie star
famous throughout Asia, and appointed him as California
Tourism Ambassador. As a result, Cosmopolitan Korea
featured media coverage of the trip.
A 6-page winery fashion shoot of BH Lee entitled, “Lee
Byung Hun, Going West” was featured in VOGUE Japan.
Vogue Japan held an interview with Mr. Lee in Napa,
California, to talk about his new experiences in the USA
during the movie shooting of G.I. Joe. The interview began
with questions such as, “What brought you to work in Hollywood?,” “When did you start
speaking English?” and “Will you live in the USA in the future?” Mr. Lee responded by
saying he wants many people to see his acting and he thinks that Hollywood would offer
him this opportunity. He started learning English when he was 18 for 2 years, and now
understands about 80% of the language. Right now he lives both in LA and Seoul, but
probably in the future he would like start a new life in LA.
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VCA Korea has created a video of BH Lee’s winery trip so that VCA HQ can share the
Pan-Asia Project with the commissioners at the next International Summit meeting. VCA
Korea also intends to utilize the video for its Microsite California Road update, as well as
for video news releases to cable TV networks.
B-4. Press Office - Media Liaisons
Visit California Korea made 17 press calls to major travel trade, daily newspapers and
magazines to pitch for California features:
1. Mr. Choi Seung Pyo, Korea Travel Times
2. Ms. Min Eun Hye, Travel Information Times
3. Ms. Lee So Jin, Global Travel News
4. Mr. Park San Hyun, Yonhap Imagine
5. Mr. Seo Da Hee, Hana Traveller
6. Ms. Jung Da Woon, Hana Traveller
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7. Ms. Kim Bo Mee, Elle
8. Ms. Park So Young, Elle
9. Ms. Lee Mi Hye, VOGUE
10. Ms. Kang Bo Ra, Style H
11. Ms. Kim Ji Sun, Marie Claire
12. Ms. Yun Eun Jung, Neighbor
13. Ms. Hur Yun Sun, Allure
14. Ms. Kim Eun Ryoung, Luxury
15. Ms. Lee Jae Youn, Noblesse
16. Ms. Jung Hwa Seo, OFF
17. Mr. Kim Myun Joong, Lofficiel
C. Technology
C-1. Microsite – Cool Girls exploring Hot California!
VC Korea is working on a special episode of BH Lee on the Microsite entitled

• Event Overview: After browsing “Cool Girls Exploring Hot California,” choose a
puzzle piece which represents something you
would like to do in California, and use it to
complete the puzzle board. The puzzle pieces
focus on key attractions and activities in the
story.
• Event Period: Dec 21, 2011 ~ Jan 20, 2012
• Target: 20s ~ 30s office ladies
• Total Number of Entries: 2,956
VC Korea launched another consumer
event on CA Road to celebrate winning the
Web Award. By leveraging the viral nature
of Twitter messages and Facebook
comments, this online event is proving
successful.
• Event Title: Leave your message for VC
Korea’s Web Award celebration
• Event Period: January 13 to February 12
• Event Page: http://www.mycalifornia.co.kr/event/event_list.asp
• Target: General visitors
• Web Award Overview: VC Korea won Web Award Korea
2012 in the “Travel & Tourism” category for the third
consecutive year for “California Road.” VC Korea was
selected from more than 600 websites by companies such
as KB Bank, LG, Coke Cola, Hyundai Motor Company,
Samsung Card, Starbucks and Samsung Electronics. The
winners of Web Award Korea were selected by web
experts from a wide variety of companies and industries
based on design, copywriting, innovation, content,
interactivity, navigation, and use of technology. All of the
results are available to public online. The Web Award
competition has become the premier award event for web
developers and markets nationwide.
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3. e-Newsletter and Web Statistics
Microsite e-Newsletter: VCA Korea covered the
following topics in the January monthly newsletter.
• Consumer Online Event “Leave your message for
VC Korea’s Web Award celebration”
• Tie-up Promotion with Benefit Korea, featuring
the new episode of “Cool Girls Exploring Hot
California”
• California Restaurant Month Event
• Paso Robles Hotel Month: Tie-up promotion with
Benefit, a San Francisco cosmetics brand
January 2012 website statistics
Number of visits: 6,249
Number of unique visitors: 5,239
January 2012 microsite statistics
Number of visits: 8,426
Number of unique visitors: 6,267
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