Local Online Travel Agencies in South Korea Secure Revenue During COVID-19

South Korea's local online travel agencies (OTAs) managed to protect and grow their revenues during the COVID-19 pandemic.

According to WiseApp/WiseRetail, South Koreans spent USD 1.46 billion on OTA applications, down 48% from last year.

Local OTAs maintained their market share, focusing primarily on domestic travel for hotel reservations and activities.

Yanolja, including DailyHotel, became the country's largest OTA with revenues of USD 501.7 million, up 4% year-on-year.

GoodChoice followed with revenues of USD 277.5 million, down just 1% year-on-year.

Both companies faced significant challenges in February and March due to the pandemic, but sales began to recover in April.

Both companies reported record sales in July during the summer holiday season.

In contrast, global OTAs such as Booking Holdings (Booking.com and Agoda), Expedia Group, Trip.com, and Airbnb experienced an average revenue decline of 64%.

These OTAs experienced similar declines in February and March. However, their recovery has been slower than that of local OTAs because they focus primarily on outbound travelers.

The COVID-19 pandemic has forced the travel industry to adapt.

Korean Air, for example, is now focusing on cargo rather than passengers and reported a surprising profit in the second quarter of this year. In addition, many travel startups that once focused on global travel have shifted their focus to domestic travel.

The success of local OTAs is due to their specialization in the domestic market.

The OTA application transaction data was collected from credit card transactions, debit card transactions, and bank account transfers of South Korean citizens.

The research did not include corporate credit card transactions, money transfers, and gift certificates.