When asked to describe the state of the Korean online travel market with pictures, TideSquare CEO Min Yoon shared a picture of an ancient Roman gladiator scene, much to the delight of the crowd gathered at Seoul’s WIT in Seoul on March 25.
He called it “super-competitive”, things would get bloody and “it’s important not to step under the wheels of a chariot”.
Sharing BSP’s ticket sales for the first two months of 2016, Min said that TideSquare started out as a private membership site and the 11th-ranked site showed a strong 50% growth.
The chart shows that Hana Tour, Interpark and Mode are the top three agents in ticket sales, with increases of 18%, 3% and 27% respectively in the first two months of the year.
Hotel sales have grown faster than airfare sales, and most encouragingly, direct contract hotel sales have been leading the agency’s hotel sales growth, up 115% in 2014 and 39% in 2015, Min said.
Chris Lee, managing director of the hotel business at Interpark, a leading e-commerce marketplace in the country, agreed with Min’s observation that the market is becoming more competitive, saying the market “cannot quench its thirst”. enter the market.
Using the analogy of drinking, he said, “there are a lot of big straws coming in, and South Korea’s potential tourist market can’t quench its thirst”.
One big trend he sees is the rise of same-day booking apps. Check In Now at Interpark is in serious competition with the Daily Hotel. Starting in 2013, it was the first company in Korea to apply the time commerce method to hotel reservation services. Prices for vacancies are more than 70% off the day’s normal prices, and the company is said to be expanding its offerings from hotels to restaurants.
Late last year, it received an investment from Silicon Valley Sequoia Capital, the third investment in the Daily Hotel after Bon Angels (a primer on venture capital) backed the company earlier this year. This is Sequoia’s second investment in a Korean company, the first being Coupang.
In the report, Daily Hotel’s Shin In Shik said: “We plan to develop new mobile commerce markets based on our investment in O2O. The launch in Korea will accelerate the evaluation of business models and roll them out globally after validation.”
Interpark will also launch its travel business globally, Lee said.
Mobile is an important theme in South Korea. According to data provided by Sina Ko, managing director of Criteo Korea, 10% of Koreans own 5 or more devices, and 14% have 4 or more devices. “In Korea, the preference for mobile devices is growing, and the share of mobile voice is growing every month,” she said.
That’s why Min reiterated that his priority this year is to pursue mobility. “It’s just getting started, and it’s going to change the market.”
Charlie Park, general manager of the hotel team at Hana Tour, said the good news is that the overall online travel market is growing. While sharing his company’s FIT report, he said the online business grew 50%, the mobile business had a 30% share, and the airline and hotel cross-sell share was 20%.
While South Korea’s inbound tourism has been hit by a slowdown in the Chinese market over the past few months – China accounts for a third of all tourist arrivals – it ranks 20thth Ranked No. 1 in the world with huge potential. That’s why Hana Tour, which dominates outbound travel, is expanding into inbound travel and building its own hotels.
Having said that, he echoed the sentiment of increased competition, saying that “the rich will get richer and the poor will get poorer”.
Meanwhile, Min is betting on three new areas — metasearch, private accommodation, and travel and activities. He is an investor in Allstay, South Korea’s first hotel metasearch product, BnbHero, a Seoul-based room and apartment startup, and BeMyGuest, a Singapore-based travel and activities provider.
Min said metasearch is starting to take off in South Korea. The country’s main search engine, Naver, is entering the travel space with partnerships with Hotelscombined and Booking.comtrivag, while Skyscanner is also gaining traction. “They don’t advertise, but they do a good job with social media and user experience,” he told the audience at WIT Seoul.
Trivago announced South Korea as its top priority for 2016 after expanding into the Japanese market over the past two years.
Experts believe that the advent of metasearch will increasingly move travel consumers online — currently, most Koreans search online, but prefer offline bookings through traditional travel agencies. Search solves a consumer problem and is expected to lead them into the buying funnel, as more metasearch now offers facilitated bookings.
In fact, TripAdvisor turned on instant booking during the week at WIT Seoul, and senior manager Edward Jeong said the review site was expanding healthily in South Korea. Its brand awareness has been low, but it has been on the rise over the past three years through a strategic partnership with Samsung, as well as links with local brands such as Naver and Asiana Airlines.
From left, Chris Lee, Interpark; Charlie Park, Hana Tour; Min Yoon of Tide Square and Edward Jeong of TripAdvisor in the “Local Insights” panel at WIT Seoul.
