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[Yanolja Research Insights] Vol.1 Digital Transformation and Globalization Strategy for the South Korean Tourism Industry

The South Korean tourism industry has substantial growth potential, but it still lags behind global counterparts in terms of its contribution to GDP. While tourism globally accounts for 10.3% of GDP, Korea’s tourism contribution is only 2.8%. To achieve similar growth seen in countries like Japan, Korea needs to prioritize digital transformation (DX) in its tourism sector, focusing on rapid adoption of technological innovations.


Key Changes and Trends in the Tourism Industry:

  • Automation and Technology Integration: The industry is moving towards automated, contactless services, transforming sectors like airports, hotels, and tourist centers into high-value operations.

  • Growth of Tourism Solutions: Specialized solutions, such as cloud-based management systems, are improving operational efficiency and service quality for hotels and tour companies.

  • Hyper-Personalization: Using big data, tourism services are increasingly tailored to individual preferences, exemplified by services like American Express’s Trip Planner.


Industry-Level Shifts:

  • Platform Influence: Platform companies are gaining more influence, evolving beyond traditional OTAs to directly connect consumers with operators.

  • Decentralization: The move from centralized models (such as GDS) to decentralized systems like NDC allows for more efficient transactions.

  • Innovation and Technological Displacement: AI technologies, such as ChatGPT, may replace some services traditionally offered in tourism, shrinking the need for certain roles.

  • Metaverse and Virtual Travel: Metaverse and VR technologies are emerging as key growth areas, requiring new national policies to support virtual currencies and NFTs.


Challenges and Globalization:

  • Global Competitiveness: Korean tourism companies are facing significant competition from global OTAs. In order to remain competitive, expanding globally is essential.

  • Digital Infrastructure and Support: Despite Korea's advanced ICT infrastructure, there are challenges like limited foreign language services and payment issues that hinder the experience of international tourists.



While digital transformation and globalization are undeniably important for the future of South Korea's tourism industry, what specific actions are needed to address the challenges and capitalize on the emerging opportunities? For a detailed breakdown of strategies and further insights, check out the full report.

Yanolja Research Insights Vol.1

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Location: Seoul, Korea

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