KTO boosts efforts for local startups to enter Japanese market
Korea Tourism Organization President Kim Jang-sil delivers a welcome speech during an opening ceremony for the Korea Tourism Startup Center in Tokyo, Dec. 5. Courtesy of Korea Tourism Organization
The Korea Tourism Organization (KTO) has stepped up efforts to incubate and support the overseas expansion of local startups in the tourism industry by opening the Korea Tourism Startup Center (KTSC) in Japan.
According to the KTO, the company officially launched the KTSC in Tokyo and held an opening ceremony, Dec. 5, to help Korean tech tourism ventures expand throughout the Japanese market.
The Tokyo center, strategically located in downtown Shibuya near the KTO’s Tokyo Office, is the second of its kind after the Singapore center, which opened last August.
“We are glad to present Korea’s dynamic startups in the tourism industry that have cutting-edge technologies … We believe the KTSC’s startups and business development will provide new opportunities for the two countries’ tourism industries to grow together,” KTO President Kim Jang-sil said during the opening ceremony.
The Tokyo center will provide a business network that is integral to the region’s ecosystem, arrange marketing strategies, localization consulting and meetings with selected venture capital firms and experts for investment and upstart growth.
Fifteen Korean startups from the fields of accommodation, exhibitions, technology and K-pop were selected to join the center this year.
KTO President Kim Jang-sil, back row fifth from left, and the culture ministry's Tourism Industry Policy Bureau Director General Yong Ho-seong, back row sixth from left, pose with heads of the 15 Korean startups and KTO officials at the KTSC in Tokyo, Dec. 5. Courtesy of Korea Tourism Organization
Most of them are Tourism Startup Global Challenge Program alumni, an annual startup incubating program jointly run by the Ministry of Culture, Sports and Tourism and the KTO since 2020.
The member companies have a one-year duration of residency, which can be extended by one year annually after evaluation of their performances. The center will select new members if vacancies come up.
The center’s opening comes amid the improvement of the Korea-Japan relations and the growing tourist exchange between the two countries.
“The number of travelers between the two countries amounted to 6.5 million between January and September this year. Korea and Japan are the No. 1 countries to each other in terms of inbound tourism,” Kim explained.
Among those 6.5 million, 1.58 million were Japanese traveling to Korea. The figure is a 19-fold increase from the same period last year, and accounts for 20 percent of the total inbound tourists in Korea, making Japan the top visiting country.
A survey from October jointly taken by the two countries shows that more Japanese people have positive impressions of Korea (37.4 percent). It is the first time in 11 years since the poll took place that the positive responses outnumbered the negative ones (32.8 percent).
The KTO expects the center to spur the growth of the two countries’ tourism industries.
“The global travel market trend has shifted from group tours to free independent travelers and the online travel agency market is forecast to continue to grow,” Kim said.
The innovative tech solutions offered by these companies, tailored to the customer’s situation by integrating independent services of transport, accommodation and experiences, can make travel between Korea and Japan easier and more dynamic, Kim explained.
Lee Sang-mook, chief executive officer of Stayfolio, pitches his company's travel solutions to Japanese travel authorities and industry stakeholders in Tokyo, Dec. 5. Courtesy of Korea Tourism Organization
According to the global research firm Statista, the global online travel agencies (OTA) market will continue to grow, with forecasts marking 93 percent growth from $4.3 trillion in 2020 to $8.5 trillion in 2025.
Henry Kim, chief executive officer of DOWHAT, a Korean startup that serves a cloud-based digital management platform for accommodation facilities, told The Korea Times that joining the KTSC in Tokyo provides his company with many advantages.
“Thanks to the opening of the KTSC, we now have pleasant working environments that feature suitable meeting places to work with local industry players. Also, the reputation of being selected as a KTSC member through a tough competition earned us credibility from local stakeholders,” Kim said, expressing high hopes to benefit from the center’s information and network to settle into the Japanese market.
Residency members of the KTSC in Tokyo and Japanese travel industry stakeholders participate in a networking event in Tokyo, Dec. 5. Courtesy of Korea Tourism Organization
While the center’s opening received much attention from Japanese travel authorities and industry stakeholders, Kim cited Japan’s rapid recovery in inbound tourism and startup incubation policy as key assets for Korean companies.
According to the Japanese National Tourism Organization (JNTO), Japan is seeing a quick post-pandemic recovery in inbound tourism. Over 2.1 million foreign travelers visited Japan in August this year, which is an 85 percent recovery from the same period in 2019.
Against the backdrop, Japan’s inbound spending also saw a 95.1 percent increase to 1.2 trillion yen ($8.2 billion) in the second quarter of this year, compared to pre-pandemic levels.
Also, Japan has been expanding government support for startups in a five-year incubation plan that kicked off last year. As a result, the number of startups in Japan increased by 50 percent in the last five years to amount to 15,692 as of June this year. Investment in tourism grew tenfold in the last ten years, and the country aims to grow the industry to 10 trillion yen by 2027.
On the sidelines of the KTSC opening ceremony, a business networking event took place at Hotel New Otani Tokyo on Dec. 5.
The event connected Korean startups with major regional industry players, including Nippon Traven Agency, the country’s oldest travel agency founded in 1905, Seven Bank, the Bank of Yokohama and more.
Residency members of the KTSC in Tokyo and Japanese travel industry stakeholders participate in a networking event in Tokyo, Dec. 5. Courtesy of Korea Tourism Organization
Meanwhile, the Korean startups also participated in the 11th edition of the Innovation Leaders Summit, Japan’s largest annual startup fair that took place between Dec. 4 and 7 in Toranomon Hills.
The event was joined by Japan’s travel authorities, municipalities and major conglomerates including corporate venture capital, NTT DOCOMO Ventures, the Central Japan Railway Company and Tokyu Group, a comprehensive real estate management company.
“By opening the KTSC around the world, the KTO expects to help overseas expansion of Korean tourism ventures as well as to improve the country’s tourism profits,” Kim said.
The KTO has incubated 1,638 tourism ventures since 2011 and plans to establish eight more global KTSCs overseas by 2027.