Korea Fact Sheet Korea Overview HTA has contracted with Aviareps to provide marketing services in Korea. Hawai‘i Tourism Korea (HTK) aims to grow awareness for the Hawaiian Islands. HTK is focused on sustaining airlift, stimulating travel demand, increasing visitor expenditures, strengthening Hawai‘i’s presence in online and offline initiatives, and promoting visitation across the Hawaiian Islands. Year-to-date May 2020 Quick Facts1 Visitor Expenditures: NA (Not available) Primary Purpose of Stay: Pleasure (39,891) vs. MCI (747) Average Length of Stay: 8.37 days First Time Visitors: 75.8% Repeat Visitors: 24.2% % % Change Change 2019 vs % 2019 vs 2020* 2020 YTD May YTD May change Korea (by Air) 2018 2019P 2018 Forecast Forecast 2020P 2019P YTD Visitor Expenditures* ($ Millions) 496.6 477.8 -3.8% NA NA NA 198.7 NA Visitor Days 1,698,940 1,722,496 1.4% NA NA 348,453 733,343 -52.5% Arrivals 228,350 225,479 -1.3% NA NA 41,650 94,070 -55.7% Average Daily Census 4,655 4,719 1.4% 2,292 4,857 -52.8% Per Person Per Day Spending* ($) 292.3 277.4 -5.1% NA NA NA 271.0 NA Per Person Per Trip Spending* ($) 2,174.8 2,119.0 -2.6% NA NA NA 2,112.4 NA Length of Stay (days) 7.44 7.64 2.7% NA NA 8.37 7.80 7.3% *Dept. of Business, Economic Development & Tourism (DBEDT) 2020 forecasts were not available at the time of report publication. Contact Information Hawai‘i Tourism Authority: Minami Aoki, Market Manager Tel: (808) 973-2262 [email protected] Hawai‘i Tourism Korea: Irene Lee, Korea Country Director Tel: 82 (2) 777-0033 [email protected] 1 2020 and 2019 visitor data are preliminary. 2018 visitor data are the final numbers and reflect updated airfare statistics from DIIO Mi Airline database, data from the National Travel and Tourism Office, and final passenger counts from Airline Traffic Summary reports. Market Summary Due to the COVID-19 pandemic, all passengers arriving from out-of-state and traveling interisland during May 2020 were required to abide by a mandatory 14-day self-quarantine. Exemptions include travel for essential reasons like work or health care. During last month, Governor David Ige’s stay-at- home order transitioned to the safer-at-home order, then eventually the state entered the “Act with Care” phase. The U.S. Centers for Disease Control and Prevention (CDC) also continued to enforce the “No Sail Order” on all cruise ships. In May 2020, there were 21 visitors from Korea versus 16,026 visitors a year ago. Visitor spending data were not available. • Through the first five months of 2020, arrivals decreased 55.7 percent to 41,650 visitors. Visitor days declined 52.5 percent. The average daily census showed 2,292 visitors per day, a 52.8 percent drop compared to the first five months of 2019. • Through the first five months of 2020, 98.6 percent of visitors went to O‘ahu, 14.6 percent went to the island of Hawai‘i, 10.0 percent went to Maui and 2.9 percent went to Kaua‘i. Over half (57.9%) were True Independent travelers. First timers accounted for 75.8 percent, and 24.2 percent were repeat visitors. • Through the first five months of 2020, air seat capacity from Seoul decreased 47.7 percent from the previous year. • In 2019, decreased visitor arrivals (-1.3% to 225,479 visitors) and lower daily spending (-5.1% to $277 per person) resulted in a decline in visitor spending (-3.8% to $477.8 million) compared to 2018. The average daily census showed 4,719 visitors per day in 2019, an increase of 1.4 percent compared to 2018. • In 2019, 98.4 percent of Korean visitors went to O‘ahu, 12.8 percent went to Maui, 11.1 percent went to the island of Hawai‘i, and 3.1 percent went to Kaua‘i. Over half (58.8%) made their own travel arrangements (i.e., True Independent). First timers comprised 73.6 percent and 26.4 percent were repeaters. • In 2019, seats from Seoul declined (-7.0% to 326,398) compared to 2018. Market Conditions • According to the Korea Development Institute (KDI), Korea's economy will be hit hardest by COVID-19 in the first half of this year and begin recovery in the second half, marking a record low of 0.2 percent rate for 2020. • The OECD projected that Asian economies will weather the economic effects of Coronavirus more effectively than the rest of the world. While global GDP is projected to drop 7.5 percent in 2020, the only G20 Economy projected to weather the Coronavirus epidemic with less impact to its economy is South Korea which is expected to see a 2.5 percent decline in 2020 GDP. The Korean economy would grow by 3.9 percent in 2021, showing a good recovery according to Korea Development Institute. • South Korea's provision of emergency relief funds began to boost depressed private consumption amid COVID-19 pandemic, raising revenues of small merchants in the first week of As of June 26, 2020, Korea Fact Sheet 2 the payout from a one-off aid program. An index gauging the average sales of small merchants reached 100 in the second week of May, the same as in the previous year, according to the Korea Credit Data (KCD). • Consumer sentiment in South Korea slightly rebounded in May on the slowdown in COVID-19 infection cases, according to Bank of Korea (BOK). The country's composite consumer sentiment index (CCSI) rose to 77.6 in May, up 6.8 points from April when it dropped to its lowest level since December 2008. • The average USD/WON exchange rate in May was 1,230.54 won, a slight increase from the previous rate of 1,223.06 won in April. • South Korean airlines will not apply fuel surcharges on international routes in May to reflect falling oil prices. • Korean Air suspended its flight services on ICN-HNL route (KE053) and ICN-NRT-HNL route (KE001) till August 31, 2020. • Asiana Airlines cut the flights service of ICN-HNL route (OZ232) until July 31, 2020. • Hawaiian Airlines has halted its flight service of ICN-HNL routes through July 15, 2020. • Nation's full-service carriers – Korean Airlines & Asiana Airlines – are planning to expand international routes in July as travel demand gradually rebounds and government restrictions are eased. • South Korea’s low-cost carriers are also restarting their international services. Jeju Air, the country’s largest LCC by sales, resumed Incheon to Manila flights once a week from June 6. KE’s affiliate budget carrier, Jin Air, restarted flights on five international routes from Incheon to Bangkok, Taipei, Narita, Osaka and Vietnam on June 1. Distribution by Island % Change YTD May YTD May % change Korea (by Air) 2018 2019P 2019 vs 2018 2020P 2019P YTD O'ahu 222,760 221,949 -0.4% 41,070 92,375 -55.5% Maui County 32,253 29,078 -9.8% 4,209 12,831 -67.2% Maui 31,753 28,766 -9.4% 4,166 12,705 -67.2% Moloka'i 788 819 4.1% 60 331 -82.0% Lāna'i 664 495 -25.5% 94 318 -70.5% Kaua'i 9,165 7,071 -22.9% 1,205 3,343 -63.9% Island of Hawai'i 24,279 25,074 3.3% 6,094 11,956 -49.0% Airlift Departure 2020 2019 %CHANGE City Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4 Annual Q1 Q2 Q3 Q4 Annual Seoul 70,957 NA NA NA NA 88,217 71,121 84,676 82,384 326,398 -19.6 NA NA NA NA Source: Diio Mii airline schedules. Q2-Q4 2020 air seat forecasts are not available at the time of report publication due to the continuously changing COVID-19 pandemic. As of June 26, 2020, Korea Fact Sheet 3 Group vs. True Independent; Leisure vs. Business % Change YTD May YTD May % change Korea (by Air) 2018 2019P 2019 vs 2018 2020P 2019P YTD Group vs True Independent (Net) Group tour 33,724 34,803 3.2% 6,946 15,863 -56.2% True Independent (Net) 124,023 132,672 7.0% 24,104 54,259 -55.6% Leisure vs business Pleasure (Net) 217,332 215,295 -0.9% 39,891 89,479 -55.4% MCI (Net) 6,347 5,482 -13.6% 747 2,704 -72.4% Convention/Conf. 3,771 3,155 -16.3% 281 1,728 -83.8% Corp. Meetings 416 228 -45.3% 20 101 -79.9% Incentive 2,167 2,122 -2.1% 446 877 -49.2% First Timers vs. Repeat Visitors % Change YTD May YTD May % change Korea (by Air) 2018 2019P 2019 vs 2018 2020P 2019P YTD 1st timers (%) 78.3 73.6 -4.7 75.8 73.0 2.8 Repeaters (%) 21.7 26.4 4.7 24.2 27.0 -2.8 Tax Revenue % Change YTD May YTD May % change Korea (by Air) 2018 2019P 2019 vs 2018 2020P 2019P YTD State tax revenue generated* ($ Millions) 57.97 55.77 -3.8% NA 23.19 NA *State government tax revenue generated (direct, indirect, and induced) As of June 26, 2020, Korea Fact Sheet 4 .