South Korea

Market Overview South Korea’s economy has remained strong despite the global economic downturn, with recent growth hitting record levels for the past seven years. Unfortunately this strength was countered by the H1N1 Influenza A (Swine Flu) pandemic, which saw significant cancellations in outbound travel in September and October. While the short term outlook remains relatively bleak, fully independent and honeymoon travel is expected to recover, driven by competitive airfares and travel deals.

New Zealand is a popular holiday destination among South Korea travellers. Despite volatile market growth, it is New Zealand's sixth largest market in terms of visitor numbers and seventh largest source of expenditure.

Sixty per cent of South Korean visitors combine a trip to New Zealand with another destination. More than 70 per cent of holiday visitors travel to New Zealand on pre-arranged group or semi-structured tour packages organised by tour companies based in South Korea.

Tourism New Zealand’s current focus is to work with the South Korean travel trade to develop the higher end/luxury and fully independent sectors of the market. These sectors match well with what New Zealand can offer South Korean holidaymakers and will help build yield from this market.

Between 1999 and 2008, total visitor arrivals from South Korea increased by 80 per cent. However, growth from the market has been volatile since the 1990s. The market grew rapidly after Government restrictions on travel were lifted in the early 1990’s, only to drop dramatically as a result of the Asian Economic Crisis in 1997/98, and recover again between 2000 and 2004.

There has been a sharp decline in South Korean visitor arrivals to New Zealand over the last two years as a result of the abandonment of shopping commission practices, which were an important source of income for agents, and reduced airline capacity. The H1N1 Influenza A (Swine Flu) outbreak in May 2009 and the global economic crisis have contributed significantly to the past year’s decline.

While visitor arrivals have been impacted, the amount each South Korean visitor spends while visiting New Zealand has climbed significantly in the past year, increasing by at least 20 per cent each quarter so far in 2009.

Tourism New Zealand expects the current market conditions to continue in the short to mid-term with the market forecast to rebound within the next three years as our work developing more independent travel gains ground.

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