There was a time when I visited Tokyo and thought I had landed in a science fiction novel. Today, I get that same feeling when I visit Seoul.
Its citizens are more attached to their smartphones than anywhere else. By age 12, 72% of South Koreans own a smartphone, and they spend, on average, 4.5 hours a day on it. You tap into WiFi everywhere, like air.
This time last year, when we held our second WIT Seoul conference, relations between North and South were strained, with threats of a possible nuclear attack. This time around, things had calmed down. The third WIT Seoul, held at Seoul Dragon City, built a bridge between South Korea's online and offline travel industries, attracting a record 300 delegates from digital brands as well as traditional players, such as Korean Air, HanaTour and the Korea Association of Travel Agents (KATA).
Here's a list of nine key trends that WIT Seoul revealed are driving change in South Korean travel.
1) Every crisis creates an opportunity. South Korea's inbound is still recovering from soured relations with China, which banned Chinese tour groups from visiting the country last year. Arrivals dropped from 17.2 million to 13.3 million. The 4 million lost visitors cannot be easily replaced, but it forces the inbound sector to diversify.
The Korea National Tourism Organization has launched an "Imagine Your Korea" campaign aimed at markets such as Southeast Asia. There's also been a rise in hocance (staycations) as brands turned their attention to the domestic market.
AccorHotels' vice president of operations for South Korea, Vincent Lelay, said he was taken aback by the appetite for staycations among Koreans, adding, "We are adapting our weekend offers for families, couples and adolescents."
2) Outbound is where the won is. The drop in inbound from China forced low-cost airlines to find new destinations. As a result, more South Koreans found themselves able to fly to places farther afield. About 25 million traveled abroad in 2017, an impressive number for a country of 52 million. Of these, 7 million went to Japan.
3) The perfect storm is approaching as global elephants enter and local giants stir. While the drop in inbound affected the traditional travel sector, online grew, with global OTAs and metasearches increasing their penetration and new entrants such as Naver, the country's leading search engine, and Kakao, the country's leading messaging service, deepening their reach into travel.
Tidesquare CEO Min Yoon likened the situation to "the eye of a storm, where everything seems to be very calm, but we know the perfect storm is coming. New entrants are leading the Korean travel industry's growth, including metasearch, e-commerce marketplaces such as eBay and IT megacompanies like Naver and Kakao."
Sang Kyu Lee, CEO of e-commerce giant Interpark, warned that while companies like Kakao and Naver may now be seen as partners, they will eventually become formidable competitors.
"A lot of new startups will emerge, and many new market leaders will emerge," he said. "A service using AI (artificial intelligence) will be commercialized."
Theo Panagiotoulias, Hawaiian Airlines' senior vice president for global sales and alliances, said more than 50% of bookings were now from the web and that "mobile capabilities are now a prerequisite for long-term success."
4) The mobile-only world is fast approaching. Brandon Son, Expedia's director of market management for South Korea, said the new generation, growing up with smartphones from age 12, will know only the mobile device.
The top three mobile feeder markets to South Korea are Japan, Hong Kong and the U.S., but the three fastest-growing mobile feeder markets are the Philippines, Brazil and Thailand. Expedia has also learned that mobile deals drive conversions (seven in 10) and that mobile booking windows are on the rise: from 8 to 11 days domestic and 30 to 33 days international from 2014 to 2017.
Lelay said 50% of AccorHotels' domestic direct bookings in South Korea are done via its mobile app, and "there is a huge potential for us to grow loyalty-member and mobile users."
5) It's time for women to have a meaningful voice in travel. Aside from being enthusiastic travelers, women in South Korea are making their voices heard in a country where there's huge gender inequality, said Naree Lee, a journalist turned entrepreneur.
"Women are paid 55% to 60% lower than men, and only 2% of board executives are women," Lee said. "Women make up 55% of all independent, single travelers, and it's time for women to have a meaningful voice in travel."
Lee is building a platform called Plannery, a planned membership model for women to collaborate and network and raise the profile of female executives.
6) Appetite for new and alternative types of accommodation is growing. Sulbi Lee, general manager of M Social, Singapore, talked about her hotel's experience with robots, which deliver room service, mingle with guests and usher people to the restaurant. It is also experimenting with a Singapore-made robot that fries eggs.
M Social, which opened in June 2016, is a Millennium & Copthorne brand positioned as creative, communal and innovative. The second opened in New Zealand last fall; there are more in the pipeline.
It's exactly the kind of brand Injin Kim, director of asset management for CDL Hotels Korea and a popular hospitality blogger, said would work in the local market. He cited properties like the Ace hotels in Portland and New York, which are more about communal and lifestyle spaces than the traditional hotel.
7) The next battle for air will be low-cost longhaul and transpacific. The week before the event, South Korea approved the transpacific joint venture between Korean Air and Delta Airlines.
Keehong Woo, representative director and executive vice president of Korean Air and a key player in the negotiations, said the partnership could start as early as this month, giving passengers seamless connections to 290 destinations in the Americas and 80 across Asia. That would enable Korean Air to compete against the other two transpacific alliances: United with ANA and American with Japan Airlines.
Woo led Korean Air's host system switch to Amadeus' Altea and was responsible for its new global website. While these improved distribution efficiencies, he said GDS fees still cost the airline $100 million a year.
8) Tours and activities power on, with startups finding their niche. The funding coming into tours and activities was welcomed by three WIT alumni that are seeing good growth in their business, and each seemed to have found its niche.
Voyagin raised $1 million, then was acquired by Rakuten for an undisclosed sum. It found a profitable niche in featuring 240 Michelin-starred restaurants in Japan. Its best-selling activity is the Tokyo robot show, for which it sells about 100 tickets a day.
Korea-based MyRealTrip, which has raised $12 million since launching in 2013, started three new categories (accommodation, B&B and Airtel), and flights will be launched in May, said founder and CEO Donggun Lee. Its best-selling activity is the Osaka Amazing Pass, followed by the Vatican tour.
Singapore-based BeMyGuest, which has raised $11.5 million, is seeing a trend in which close to 50% of bookings are now made within 24 hours (38% for same day and 8% for following day), and 91% of bookings made through BeMyGuest's distribution partners had instant confirmation in 2017. Its best-selling activity is the Sentosa Luge in Singapore.
9) Taking bets on new tech and watching new enemies. Jun Shin of McKinsey Korea cited AI and the internet of things as two technologies that were occupying the attention of CEOs.
Ryan Lee, chief investment officer of Dunamu, said the power of having a lot of data along with the ability to analyze it cannot be underestimated, which is why companies like Amazon must be watched.
Dunamu is reported to be betting $100 million on blockchain startups, which could be the next disruption in terms of adding another layer to the internet.
Travel will lead the way in bridging global and local. In South Korea, the combined forces of global giants, local e-commerce powerhouses and new startups will force that change.