Travel industry structure in fast growing but immature outbound markets: the case of Korea to Australia travel

This paper examines the structure of the travel industry in Korea with particular reference to outbound travel to Australia. The relationship between the wholesaling and retailing functions is examined. It was found that despite the existence of strict licensing procedures, which have created three categories of travel business, the distinction between the wholesaling and retailing functions remains blurred. Most business is handled by a single category of operator — general travel agents. In contrast to the oligopolies evident in other industrial sectors in Korea, however a fairly large number of companies each handle a fairly small proportion of the market. This may change as a combination of intense price competition and the impact of the East Asian financial crisis forces less competitive operators out of business. Until the expected shake-out occurs, inbound tour operators in countries such as Australia will feel the pinch. An excessive and continuing emphasis on price will make it difficult for long-haul destinations to offer high quality products and to build high-yield business. Copyright © 1999 John Wiley & Sons, Ltd.