Korean travel agencies enjoy surging overseas trip demand

South Korea’s travel agencies enjoyed strong demand for overseas trips, adding to hopes that their earnings are likely to improve further this year as budget airlines are geared up to increase international flights to pre-COVID-19 levels. 

Hanatour Service Inc., the country’s top travel agency, said on Thursday the number of its international package tour customers totaled 447,448 in the fourth quarter of 2023, up 232% from a year earlier and 25% from the previous three months.

Southeast Asia was the top destination as 47.8% of the customers chose total group holiday services, which include transport and accommodation, there during the October-December 2023 period. The number of flights to Vietnam from South Korea nearly tripled to 5,973 in the quarter from a year earlier, according to the government data.

Travelers to Japan of Hanatour’s package holiday services accounted for 29.4%, while visitors to China and Europe made up 7.9% and 7.5%, respectively.

HIGH-END SERVICE

Customers also preferred the agency's high-end service launched in July 2022 on expectations of surging demand for international trips with most global COVID-19 restrictions lifted.

The HanaPack 2.0, which is about 30% more expensive than normal holiday packages, made up 65% of the company’s total package tour sales last year.

The high-end service does not include optional activities such as shopping and dining at Korean restaurants in other countries.

BEST MONTH SINCE COVID-19

Smaller rival Modetour Network Inc. is also seeing an earnings recovery. Its overseas trip customers skyrocketed 327% to 1.3 million in 2023.

The number of international package tour customers jumped 106.3% to 88,240 last month from a year earlier, the largest monthly performance since February 2020 when COVID-19 broke out in South Korea.

Modetour plans to pay incentives to employees in the first half based on earnings of 2023.

“The company will distribute 4 billion won in treasury stocks and additional cash (to employees),” said an official of the travel agency.

Write to Mi-Kyoung Lee at capital@hankyung.com
 

Jongwoo Cheon edited this article.