The impact of COVID-19 was not as severe in South Korea for most luxury goods, but experiential luxury suffered due to the sharp decline in the number of tourists visiting the country. According to Korea Tourism Organization, the number of inbound tourists seen over January to June 2020 declined by 75%, and if considering June alone declined by 98%.
There were no hotel closures during the COVID-19 outbreak, as the government did not implement mandatory lockdown. Some facilities with a high risk of infection, such as saunas, children’s play areas and business lounges were closed, but indoor and outdoor swimming pools mostly continued to operate, as did dining and other accommodation establishments.
Players in experiential luxury are diversifying their promotional activities to cover all types of needs: family, friends, partners, and small parties who wish to avoid crowded restaurants. Lotte Hotel and Intercontinental hotel, for example, developed sales through TV homeshopping, which gained considerable attention.
Even if the COVID-19 situation eases in South Korea in 2021, it will be some time before inbound tourists from other countries are able to freely visit the country. Thus, each city will compete to attract an increasing number of local tourists in future.
After the pandemic, tourism will change from group tours to individual tours. This will be beneficial to experiential luxury because with group tours, price is one of the factors considered to satisfy mass consumers.
Experiential luxury was not the authority’s target for restrictions. During the COVID-19 pandemic people still visited luxury hotels to enjoy time with their friends and family.
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