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During the period 1988 to 1995 Korean outbound travel increased by 526% to 3,818,740 in 1995. The rapidity of this increase has caught many destinations unprepared. One such example is Australia which has only recently recognised the potential of Korean tourism. Australia's tourism industry has yet to recognise that Korean tourists have expectations that differ from those of other Asian visitors and as a result has failed to provide a product that lives up to the promotional images of Australia contained in tourism marketing campaigns. Issues such as cuisine, language difficulties and poor itineraries are identified as major problems. This article will examine the problems Australia faces in developing a range of services and products suitable for Korean tourists.

South Korea, long known as the Hermit Kingdom because of its desire to remain isolated from the non-Korean world, has recently emerged as a significant tourist country in terms of both outbound and inbound travel. Following the relaxation of foreign travel restrictions on Korean citizens in 1989, Korean outbound travel grew rapidly, increasing by 526.6% between 1988 and 1995. If the growth of outbound travel follows the trend established by Japan when restrictions were lifted in 1970, Korea will in time become a major force in world tourism. To date Koreans have tended to restrict their travel to Asian and North American destinations, however visits to other destinations such as Australia are increasing at a rapid rate. Exploitation of the potential offered by Korean tourism will entail host countries developing travel products and services that are in a form and of a standard acceptable to Koreans. This article will discuss Australia's response to recent developments in outbound Korean travel by examining the reaction of Korean tourists to Australia's tourism product and identify problems that have emerged through cut-throat pricing by inbound operators. Many of the issues raised in this article were identified in recent research (Kim and Prideaux 1996) which focused on the reaction of Korean Group Inclusive tourists to Australia's tourism product.

Although the growth in Korean inbound tourism to Australia is little short of spectacular, little quantitative or qualitative research has been conducted to date. Much of the debate relating to the growth in and understanding of this market has centered on media reports, many of which contain a large element of sensationalism. As a consequence many of the issues lack focus and have not been widely debated.

The issues discussed in this paper are based on data collected from three sources; statistical data collected by the Australian Bureau of Tourism Research (1995); interviews with the proprietors of 12 Korean owned tourist related businesses in Queensland; and a survey by Kim and Prideaux (1996) of Korean tourists returning from group inclusive tours to Australia during the period 1 July to 31 December 1995. Results of the survey by Kim and Prideaux were based on the completed replies obtained from 351 Korean tourists at Seoul International Airport. This survey used closed questions which asked respondents to rank replies on a sliding scale of one to five. Responses were processed using the Statistical Analysis System (SAS). Respondents were almost evenly divided between males (50.9%) and females (49.1%). In respect to age, 51.1% of the respondents were aged 31 to 50 years. The predominate male group were aged 51 to 60 (15.7%) and females 31 to 40 years (14.3%). A chi-square test indicated the significant difference was at a confidence level of 95%.

Table I illustrates that outbound tourism from Korea has exhibited rapid growth since 1989. In terms of overall tourism flow patterns, the major destination for Korean outbound tourists is Japan which accounted for 26.2% of trips in 1995 (KNTO 1996). The balance of outbound travel is to the United States of America (17.2%), the remainder of Asia (37.9%) and the rest of the world including Australia (3.2%). Competition for Korea's outbound market is intense and by 1996 National Travel Offices representing 18 nations including Japan, Hong Kong, Singapore, Thailand, Australia, England, Canada, Switzerland, Malaysia, USA, Austria, Finland, China and France had been established in Korea. In a bid to capture a share of the Korean outbound market a number of Australian state government tourist offices have established offices in Korea commencing with Victoria in 1992. In 1995 the Queensland Tourist and Travel Corporation, funded by the State Government of Queensland, also established an office in Seoul. Unfortunately this trend has the potential to confuse the Korean consumer who is largely unaware of Australia's Federal system of government where state governments are free to conduct their own independent overseas promotion.
 
 

Australia experienced rapid growth in Korean inbound tourism in the period 1989-1995 as illustrated in Table 2 and is currently the second most popular non-Asian destination after the United States of America and the eighth largest overall. The Australian Tourism Forecasting Council (1995) has forecast that by 2003, Korean inbound tourism will increase to 478,000, a 284.6% increase on 1995 arrivals. The growth of inbound Korean tourism has been so rapid that Australia's tourism industry, still largely in the process of adapting itself to the needs of the Japanese tourist market, has yet to grasp the significance of Korea as a new inbound market. Few Australian's speak Korean, although the country is Australia's second largest trading partner and Korea's unique culture and customs remain a mystery to most Australians. In many instances Australians' knowledge of Korea is limited to a scant recognition that some of the newer brands of cars available in Australia are built in Korea, the Seoul Olympics and that in the past, Australians fought in the Korean war that was somehow tied up with the popular television program MASH. Most Australians have difficulty distinguishing between Koreans, Japanese and Chinese and have no knowI edge of Korean cuisine or other cultural attri
butes. Many of the businesses established in response to increased Korean inbound tourism are owned by Koreans living in Australia.

To date, Korean inbound tourism has focused almost exclusively on Sydney, Australia's largest city, and the northern state of Queensland which has heavily marketed its beach and outdoor life-style attributes. In terms of Asian visitors to Australia, the proportion of Korean visitors compared to all Asian visitors, jumped from 2% in 1984 to 15.4% in 1995. During the same time period, South Korea's ranking in terms of visitor arrivals to Australia increased from 30th in 1985 to 6th in 1995. Table 2 illustrates recent trends in Korean inbound tourism to Australia by type of travel.
 
 

Role of the Australian Tourism Commission

If Australian tour operators are to maximise the potential from the Korean market, careful market research and product design will be required. A comprehensive market segmentation study released in 1993 by the Australian Tourism Commission (ATC) indicated that the primary target group of Korean tourists are those over 30 years of age and who have an income of 1.5 million Won or more. The potential size of this market is estimated to be 3.28 million persons. The honeymoon market was identified as a significant secondary market. To tap the Korean market the ATC, Australia's National Tourism Office, has developed a strategy to target primary and secondary markets. The aim of promotion campaigns funded by the ATC are to create an "Australian Brand" which customers see as highly desirable. In this regard the ATC was the first NTO to use television in Korea when it conducted a highly successful campaign titled "Make Friends with Australia" in 1992.

Yarmy (1992, p.91) stated that Korean travel patterns were influenced by the country's culture and environment. To some extent that is supported by survey findings in Australia. Major characteristics identified in research conducted by the Bureau of Tourism Research and by Kim and Prideaux are:
 
 

A problem that has the potential to impede expansion of the Korean inbound market is the intense price competition that currently exists between Korean outbound travel agents in Korea as they have attempted to penetrate the Australian market. Travel products are sold on the basis of price not quality and tourists often find that the standard and location of hotels are different from that indicated on brochures. Inbound operations in Australia are almost exclusively provided by Korean owned companies. Many of these operators have attempted to gain market share by competing on price alone, offering Korean wholesalers ground rates that are below cost. In an effort to claw back revenue, inbound operators have resorted to arrangements with duty free shops, restaurants and souvenir shops, usually also Korean owned, for large commissions, usually in the order of 30%. Inbound operators also charge high prices for optional tours and pressure hotel operators to offer large discounts in exchange for promises of continued business. Kim and Prideaux found that Koreans expressed a high level of dissatisfaction with forced shopping that occurs as a consequence of tight itineraries and with only being taken to shops where high commissions are charged. A further complaint was the lack of unique Australian made souvenirs and goods that were available for sale.

Problems in the Australian Inbound Industry

This situation partly reflects the lack of enforcement of existing regulations on the operations of inbound operators in Australia and the lack of sophistication in marketing and itinerary by Korean outbound travel agents. Many of the Korean owned Australian based inbound operators are not licensed, exposing their clients to financial loss if they cease trading. The peak body of Australian inbound operators, The Inbound Tourism Organisation of Australia (ITOA) has repeatedly requested the government to introduce some form of licensing, but to date nothing has happened.

Package tours offered to the Korean consumer are developed on the basis of low price rather than quality. Korean wholesalers have yet to develop package options that offer a range of prices depending on the quality of hotels and other elements of a typical package tour. Unless this problem is resolved, dissatisfaction amongst Korean tourists will rise and Australia could face a reduction in its existing share of the Korean outbound market.

A further apparent problem is that some older Koreans still have an image of Australia as a racist country, a situation that stemmed from the 'White Australia' immigration policy that ceased to exist in the 1960's. In reality Australia of the 1990's is a very multi-cultural country, the result of a deliberate government policy to foster Asian immigration which includes Koreans.

A widespread problem facing Australian tourism industry operators, apart from Korean owned businesses, is their failure to adequately appreciate that there is a distinctive Korean culture and style of business. The
Korean tendency to view the world from the Confucian perspective of the family and clan is not well understood in Australia. Similarly, few Australian tourism operators have taken the time to understand the unique features of Korean business behaviour. The same observation can be made about the expectations of the individual Korean tourist. Koreans regard speedy service as a virtue and do not appreciate the waste of time that occurs if meal service, for example, is slow. An understanding of these characteristics of Korean business behaviour will enable Australian tourism operators and service providers to overcome many of the problems that were uncovered during the research conducted for this paper.

Korea offers significant potential for growth as an inbound market for Australia, however, Australia's tourism industry will need to recognise that the Korean market has a number of unique attributes that must be factored into any products or services that are developed. Previous perceptions that Asians are 'cheap' travellers does not apply in the late 1990's and, compared to the effort needed to develop traditional European and American markets as much, if not more, effort is required to develop Asian markets. Hong Kong and Singapore, for example, have traditionally been regarded by many Australians as cheap destinations with poor standards of living, but in 1994 Australia's GDP per person of $19,007 was exceeded by both Singapore ($21,493) and Hong Kong ($22,527) (Asiaweek, 11 August 1995). GDP per person in South Korea is currently $10,534 but growing at a rate of 9.9% per annum in 1994 compared to Australia's growth of 3.7% in the same year.

Actions Required

The optimum pattern of Korean travel to Australia is to have a growing number of first time visitors, combined with a high percentage of repeat visitors, who are predominantly Free Independent Travellers. Achieving this pattern of travel will require considerable effort and can be expected to require the following actions:
 

• Rapid expansion of the number of Australian's who speak Korean.
• Recognition of the particular cultural attributes of Koreans.
• Developing appropriate tourist services and products that suit the Korean tourist including itineraries that give tourists the opportunity to visit some of Australia's unique scenic areas.
• Enhancing the range of shopping opportunities available including longer opening hours and improvements to the variety and quality of unique Australian made products.
• Policy measures to combat the excesses of inbound operators who attempted to gain business by undercharging and subsequently recouping losses by taking clients only to businesses which pay high commissions to tour operators.
• Increasing the number of direct air services between Australia and Korea, and
• Funding research into the Korean market and its particular requirements.

Korea offers an exciting opportunity for the expansion of Australia's inbound market however considerable care will need to be taken to ensure that the particular needs and wants of Korean tourists are provided for. The tendency to treat all Asian visitors as if they were Japanese must be avoided and considerable thought must be given to developing services and products that are acceptable to Korean cultural requirements. The same conclusions can be made for other countries also wishing to tap into the Korean outbound market. Short of a renewal of hostilities with North Korea, the countries' outbound market will continue to increase and in time, and if economic growth patterns continue on the same expansionary path experienced over recent decades, Korea has the potential to become the second largest Asian outbound market after Japan. To capitalise on the growth potential offered by the Korean outbound market, Australia's tourist industry must be ready to rapidly modify its existing range of products and services or develop new products and services that appeal to Koreans. The basis for product development must be found in recognising the characteristics of Korean outbound travel market from the perspective of both the individual tourist and the outbound tour industry.
 

References

Australian Tourism Commission. (1993) Market Segmentation Studies. Sydney: Australia Tourism Commission.
Australian Tourism Commission. (1996) Tourism Pule No 46. Sydney: Australian Tourism Commission.
Kim. S. (1994). The Impact of Social-Economic Development on Outbound Tourism in Korea. Paper presented at the International Tourism Symposium, Reducing the Barriers to International Tourism, Beijing.
Kim. SM., & Prideaux, BR. (1996). Korea, Inbound Tourism to Australia a Demand Side Analysis. (Unpublished research paper).
KNTO. (1996). 1995 Korea Annual Statistical Report on Tourism. Seoul: Ministry of Culture and Sports. Korea National Tourism Organisation.
The bottom line. 1995, August 11). Asiaweek, p.63.
Tourism Forecasting Council. (1995). Forecast, Canberra: Commonwealth Department of Tourism, 1(2).
Yarmy, WM.. (1992). Growth potential of Korea outbound tourist market to United States. Journal of Travel & Tourism Marketing, 1(1): 89-94.