HotelnAir.com, Korea’s leading charter travel agency, will close its business due to a plunge in demand in the wake of a consumer boycott to travel to Japan and the spread of novel coronavirus in China and Southeast Asian countries, the three most popular tourism destinations among Koreans.
Sources told Maeil Business Newspaper on Monday that the 10-year old travel agency jointly established by the country’s two biggest travel agencies – Mode Tour and Hana Tour – is now in the process of business liquidation. The two tour giants invested 30 billion won ($25.3 million) to set up the charter travel agency in 2011.
An industry source said the liquidation of HotelnAir.com has been discussed since last year as a consumer boycott to Japanese brands and travel to the country put growing pressure on its business, and the two parent firms already agreed to the business shutdown with the date of liquidation still under discussion.
The fall of the country’s leading charter travel agency is expected to send a shockwave through the travel agency community as it has been viewed as an iconic player in the country’s charter travel services that was able to tide over the Middle East Respiratory Syndrome (MERS) crisis in 2015.
Some say the current atmosphere could be reminiscent of a situation in 2015 when the local travel industry saw a series of bankruptcies due to increased market competition. In October 2018, the country’s major tour agency Top Travel with its 36-year history, which had its heyday until the early 2000s selling cheap flight tickets, went belly up. Several small honeymoon tour agencies followed the company’s demise.
A rumor is surfacing in the local travel industry that a bigger crisis would soon hit the market. According to government data, four small travel agencies have so far reported a voluntary business shutdown since the Lunar New Year break. Economic damages from the coronavirus outbreak are also surging. Korea Association of Travel Agents said damages reported from its 17,000 member companies amounted to 31 billion won in outbound travel cancellations and 6.6 billion won in domestic travel cancellations as of last weekend.
By Shin Ik-su and Minu Kim
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]