Travel Agencies Tap into Pent-up Demand for Release

  • By Lee Sung-hoon, Han Kyeong-jin

    December 08, 2020 12:40

    Travel demand is pent-up and bursting for a release from coronavirus shackles, the latest figures suggest.

    Very Good Tour, the fifth-largest travel agency in Korea, already started marketing overseas package tours on Nov. 23, when it was clear that a vaccine would only be a matter of time.

    It accepts just W10,000 as a down payment, a mere 10 percent of what it used to ask for before the coronavirus pandemic, and was rewarded with no fewer than 10,600 reservations for some 400 package tours to Japan and Hong Kong in March 2021, Southeast Asia in April and the U.S. and Europe in June (US$1=W1,087).

    The last-ditch attempt by the struggling travel agency, which had virtually no customers since early this year, could be paying off. A staffer said, "Even we were surprised by the unexpectedly high number of reservations. This just shows how big pent-up demand is."

    Other travel agencies are also making preparations to tap into a potential surge in demand. They are taking reservations for trips next year and transforming themselves into platforms for hotel bookings.

    Hana Tour, Korea's biggest travel agency, now offers a search platform not only for package tours but airline tickets and hotel bookings. The pandemic forces agencies to become more nimble. "We expect the popularity of group tours to wane due to the pandemic, so we're coming up with a new type of travel programs that offers the maximum range of choices for individual travelers," a Hana staffer said.

    Around 2,000 of its 2,300 staff are on unpaid leave, but around 200 IT staff are still coming to the office to keep the platform service operating.

    The Korea Tourism Organization is also gearing up to tap into potential travel demand. The KTO is selling advance air tickets to Korea to customers in Hong Kong. It also joined hands with Korean Air and Asiana Airlines to sell W100,000 discount coupons that can be used until the end of next year. Interpark recently accepted an offer by the Hungarian Tourism Agency to offer a W100,000 discount on bookings to Budapest made before Dec. 31.

    The stock prices of listed travel agencies reflect these hopes. Hana Tour's share price stood at W49,000 on Jan. 31 but had risen to W57,400 on Monday. Over the same period, Mode Tour's share price rose from W14,750 to W20,550.

    But some people think enthusiasm is misplaced. "There is no telling when tours will resume," said one industry insider. "The present stock price is surprising even for those of us in the industry."

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