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Korea’s travel industry loses hope

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Despite an upcoming long weekend for many Koreans as Buddha’s Birthday and Children’s Day near, the hard-hit travel industry does not expect any relief as trip reservations have dwindled to nearly-zero amid the coronavirus pandemic.

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Reservation rates for Hanatour and Modetour, Korea’s top two travel agencies, fell more than 99 percent in April and May compared to the same period last year. Even for the upcoming holidays, there have been few new reservations. Buddha’s Birthday falls on 30th April, and Children’s Day is on 5th May.

“There are no cancellations for overseas trips anymore because there were no reservations in the first place. Most customers have already canceled their trips and there are no flights that can go abroad, so we are not expecting a peak season for this spring,” an official from the travel industry said.

This year has the fewest number of public holidays in five years, and there are six months without any public holidays, because Independence Movement Day, Memorial Day, National Liberation Day and National Foundation Day all fell on weekends. This year’s Lunar New Year holiday was only four days because it also fell on a weekend.

As such, the travel industry has regarded the long weekend in May, in which up to six days off from work is possible, as the only chance for a rebound in this year’s performance. There will be no significant holidays after that until the Chuseok harvest holiday in September.

Meanwhile, travel agencies are already devastated. Large agencies are squeezing water out of a dry towel by cutting the workweek down to three days and taking paid and unpaid leave, but small travel agencies have started to shut down entirely.

According to travel data from the Korea Association of Travel Agents, the number of domestic and foreign travel agencies that reported closures to local governments increased to 192 as of last Friday since 20th January, when the first infection from the novel coronavirus was confirmed in Korea.

Hanatour’s overseas travelers fell 84.8 percent in February compared to the same month last year. The number of travelers to China and Japan fell more than 95 percent on-year, and long-distance travelers to Europe, the Americas and the South Pacific fell more than half.

The amount of losses from the cancellation of reservations by the end of February is over 500 billion won (US$411 million), according to a survey conducted by the travel association. The situation grew even grimmer last month, as there were nearly zero overseas trips.

“In Korea, the spread of coronavirus is slowing down, but it is getting worse around the world, so there is no way out of it. If it continues throughout the summer, the domestic travel industry will be wiped out,” said a travel industry expert who requested anonymity to speak frankly.

The coronavirus pandemic has also shocked the hotel industry, with the Korea Hotel Association estimating March losses at 580 billion won due to the sharp drop in reservations.

Luxury hotels have not been spared. Grand Walkerhill Seoul stopped operations for a month on 23rd March, and Park Hyatt Seoul has also closed its facilities through 8th June.

For the hotels still in business, the average room reservation rate is less than 10 percent on weekdays and 15 percent on weekends. Last March, hotels nationwide averaged a 70 percent average room occupancy rate.

Yet unlike hotels in big cities, Jeju Island’s accommodation reservation rate is improving. As the coronavirus makes it difficult to travel abroad, people are choosing Jeju Island for their getaway trips.

Lotte Hotel said the reservation rate of for Lotte Hotel Jeju has reached 70 percent for the long weekend. The hotel extended its honeymoon packages through the end of June, and said the reservation rate for those bookings has more than doubled since the end of March.

The Shilla Jeju also said reservations for its “Sweet Honeymoon” package more than triple this month from last month.

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“As people refer to Jeju Island as a coronavirus-free area, the number of reservations has increased for the long weekend getaway and honeymoon trips. It is good to see how airlines are increasing domestic routes such as Jeju Island … However, it will take much longer for demand to recover, as the social distancing campaign is still in progress,” a Lotte Hotel official said.

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