Luxury travel services lure big spenders to Korea

Travel agencies offer exclusive, customized services for very rich foreign travelers


When Jessica Alba was spotted at a night club in Gangnam earlier this year, everyone wondered why the Hollywood star was in Korea. Photos taken at major tourist attractions in Seoul proved she was travelling with her family.

Behind Alba’s stay in Seoul was a private travel service company, which arranged a private guided tour for her and her family. The service came with tour guides equipped with language skills and global etiquette, special limousines and itineraries that met her style and tastes.

Since then, the luxury private travel service market has started to receive attention. It is also rising as a lucrative travel service amid the recent surge in foreign tourists and a global economic downturn, which also hit Korea.

The travel industry here has just begun reaching out to the top 1 percent of world travelers.

The Korea Royal Club, launched in July, targets wealthy Chinese travelers. A consortium of multiple luxury brands ranging from luxury fashion houses, beauty salons and spas, hotels to a private medical check-up center and plastic surgeons offer tailor-made services.

The customers can choose from a wide array of luxury experiences and make an exclusive itinerary. The total service could cost about 150 million won ($132,000), according to David Choi, a KRC manager.

In just two months since its launch, the KRC has served two teams. A team of two 30-something professional women spent about 40 million won during their three-day stay in Seoul, Choi said. 

Their itinerary included image-consulting service at a total beauty care shop, emotional healing sessions at a music box therapy center, beauty consultation at a cosmetic surgery clinic and exclusive shopping at Cartier and other luxury brand stores in Seoul.

Who are the elite travelers?

A private travel agency, The VIP Travel, saw a 50 percent increase in the number of services offered to VIP tourists in a year.

“We expect the number to continue to go up till the end of the year,” said the agency’s CEO Kang Jae-hoon.

There is no official figure on the number of elite travelers coming to Korea. But travel experts estimate they make up 1 percent of the total number of tourists.

According to Cosmo.Jin Tour, the leading travel agency in the private luxury travel service, the top VIPs such as Hollywood celebrities and famous CEOs and social figures make up 1 percent of its 4,000 clients so far. The company’s typical VIPs are foreign executives, board members and high-ranking government officials.

The definition of elite travelers by the state-run Korea Tourism Organization differs somewhat from that of private travel companies.

The KTO rather looks at tourists coming for medical tourism or attending business conventions and meetings as VIP travelers.

But one thing in common is that they both see travelers from China and Southeast Asia as their core customers and the segment the luxury travel service market should focus on.

Asian tourists made up about 79 percent of the total 9,794,796 foreign visitors to Korea last year. Among them the number of tourists from Malaysia, Indonesia, Hong Kong, Thailand and Vietnam increased at a higher rate ― between 18 to 37 percent ― according to the KTO’s 2011 travel report.

Exclusive, customized services

The travel industry tries to create a level of service that meets the needs of elite customers who generally can pay for the things they want and desire.

“One of our customers bought jewelry at a duty free shop that was worth about 20 million won ― an amount that average travelers can’t spend at once,” said Kang.

The KRC offers customized styling services for customers at luxury brand stores. The personal styling service or one-on-one styling presentation is not available to all customers at the high-end brands.

“When our customers arrive, we suggest a complete wardrobe that meets their tastes and style because we study them in advance,” said David Choi.

The travel schedules for elite travelers are not fixed, but can change according to their mood and condition at the moment.

“We make the schedule flexible and personal so that the elite travelers can be lead the entire travel schedule,” said Kang.

Making the clients’ intineraries smooth sometimes involves escorting them from the airport immigration office.

While spending by business travelers does not match that of super-rich travelers, business travelers are considered one of the important contributors to travel revenue as well.

Kim Doo-jo, director of the Asia and Middle East team of the KTO, said travelers on corporate incentive tours and those attending business conventions spend about twice as much as average tourists.

The number of business travelers will continue to increase as Korea is becoming an important economic power, according to the Cosmo.Jin Tour CEO Jiny Jung.

“More Korean companies invite foreign buyers and introduce Korea. We will have more important business travelers in the future,” explained Jung.

Kang noted that Korea’s image depends on the services the VIPs receive while in Korea.

“Having appropriate protocol procedure and manner is crucial in promoting the national image,” Kang stressed.

Service quality still lags behind

Travel experts note, however, that Korea still lags behind in providing quality service and interesting itineraries to elite tourists.

“The travel industry is caught in a vicious cycle in which they offer low quality travel package to make up for the loss or for more profit, and that will never satisfy customers’ expectations,” said Jung.

Jung noted the travel industry should offer services that match clients’ expectations both for the sake of their company and national image.

VIP Travel’s Kang pointed out Korea should have a signature tourist attraction like Paris’ Eiffel Tower that people are willing to visit at any cost or come up with diverse travel options.

“To be honest, Korea is not the world’s number one travel destination. The government should come up with a one-of-a-kind tourist attraction that will keep attracting tourists from all over the world,” Kang added.

Kang said the DMZ is the closest he can think of as Korea’s signature tourist attraction because of the country’s image as a divided country.

“The travel industry and the government should know what the elite tourists want and need,” Jung noted.

By Lee Woo-young  (wylee@heraldcorp.com)