Travel agencies bet on premium package offerings

Premium travel packages see higher customer satisfaction and growing demand

Passengers queue at Incheon Airport, west of Seoul, Jan. 26. (Yonhap)

South Korean travel agencies are focusing on enhancing their premium travel packages this year, seeking to boost profitability and capture new demand.

These premium offerings, which exclude the common drawbacks of package travel such as required shopping itineraries and add-ons, have become increasingly popular. They often feature business-class flights and stays at four- or five-star hotels, offering travelers a more luxurious experience.

Despite their higher cost, premium packages are gaining traction because they allow customers to fully enjoy their trip without the hassle of unnecessary extras.

"As more customers experience overseas travel, the more they seek packages that allow them to focus solely on the trip itself. The removal of shopping and tipping elements, which were the primary reasons people avoided package tours, has led to greater satisfaction,” said an industry insider.

Hanatour, Korea's leading travel agency, is doubling down on its mid-to-top-tier package brand "HanaPack 2.0." This package caters to free-spirited travelers, incorporating preferred hotels and local restaurants into the itinerary while excluding group shopping and tours.

According to Hanatour's customer satisfaction index, scores have significantly increased from 77 points in 2019 to 84 points last year following the introduction of HanaPack 2.0.

As a result of its popularity, the share of mid-to-top-tier package users at Hanatour rose from 8 percent in 2019 to 31 percent in the fourth quarter of 2024. The company plans to introduce HanaPack 3.0, which will incorporate more diverse customer preferences and themes into the offering.

"Post-COVID travel trends have led us to strengthen our premium offerings to ensure high customer satisfaction. We are seeing strong customer loyalty and repeat business,” said a Hanatour spokesperson.

Other travel agencies, including Modetour and YB Tour, are also launching premium packages to capture demand. Modetour, for example, is seeing growing interest from Millennials and Generation Z, especially with its "Concept Tour" packages, which feature influencer-led tours at destinations with unique themes. Despite the high cost of these packages, which can reach 7 million won ($4,866.18), 95 percent of bookings are from younger customers.

YB Tour has launched premium packages focusing on luxurious hotel stays, gourmet experiences and private tours, contributing to its double-digit revenue growth. Despite some challenges, including a slight decline in bookings due to the high exchange rate amid the depreciation of the Korean won, the agency's premium products are seeing increased demand.

Travel industry experts predict further growth in the sector this year and an improved performance compared to 2024, even amid the challenging economic climate. This optimism is fueled by a resilience in demand, particularly among younger consumers who prioritize distinct travel experiences and value-driven spending.

These high-end products have a higher per-customer cost and margin, making them more lucrative than traditional budget packages. Industry players emphasize that satisfied customers who experience premium services are likely to become repeat clients.

"Expanding volume with low-cost, short-distance packages is no longer meaningful. It's important to offer profitable products that truly satisfy customers,” said an industry insider.