Aloha all!

In November, Hawai‘i Tourism Korea organized its largest event of the year, “2015 Aloha Travel Mission” where 15 partners from Hawai‘i joining the mission in to Busan, Seoul and Incheon. The travel mission provided a platform for partners to meet and network with close to 200 key travel agents and media partners in Korea, and to discuss business opportunities in a more intimate settings. We believe the mission provided our partners with opportunities and resources to help gain an in-depth understanding of the Korean travel industry, as well as closely bond with travel industry partners in Korea.

Hawai‘i Tourism Korea also participated in the 2015 Mode Tour Travel Mart with 13 partners from Hawai‘i. Over 70,000 visitors came to the travel mart, and sales of Hawai‘i tour package during the 4-day travel mart increased by over 40% compared to the previous year. Hawai‘i sales continue to grow, and is looking very positive for the remaining of the year and onto early 2016, especially with the launch of Jin Air coming into the market in December.

We hope you enjoy reading many of exciting news from Korea market, and we look much forward to closing the year with more opportunities planned for next year!

Big Mahalo and Aloha~Hawai‘i Tourism Korea

Outbound Travel MarketAccording to KTO (Korea Tourism Organization), the number of Korean overseas travelers in September increased by 14.4% to 1.5 million pax compared from a year earlier. And the total outbound number from January to September was 14.1 million pax which is an 18.8% increase over last year, with most of the travel going to short-haul destinations such as China and Japan. Korean visitors to Japan increased by over 43% from January to September over last year, due mainly to the relatively weakness of Japanese yen.

With the sharp decrease we have seen in the air seat capacity between Korea and Hawai‘i this year, arrival numbers continue to suffer. Arrivals in September decreased by 10.4% compared to last year, and down 7.4% for September

KoreanMarket Updates

The Stories of Hawai‘i 11

year-to-date. On the other hand, with Hawai‘i Tourism Korea’s effort to focus on high-spend demographics, visitor spend is seeing a healthy increase, with per person per day spending reaching $285 compared to last year’s $261 per person.

Consumer TrendTop trends for 2016 fit in a monkey bars matrix: Next year is the year of the monkey in the Chinese zodiac, and renowned trend expert Rando Kim has come up with 10 trends for 2016 that may help Koreans tackle the economic slowdown with the swiftness and smartness of a monkey. Kim, a professor of human ecology in the department of consumer science at Seoul National University, has been publishing end-of-the-year books predicting upcoming trends since 2007. His newest, “Trend Korea 2016,” is his eighth. He defined consumer trends for next year as ‘MONKEY BARS’ after the first letter in each of the 10 trends’ keywords. ◆Make a Plan Z ◆Over-anxiety Syndrome ◆Network of Multi-channel Interactive Media ◆Knockdown of Brands, Rise of Value for Money ◆Ethics on the Stage ◆Year of Sustainable Cultural Ecology ◆Basic Instincts ◆All’s Well That Trends well ◆Rise of ‘Architec-kids’ ◆Society of the Like-minded

“Knock-down of brands, rise of value for money” is one of the keyword words in Professor Kim’s 10 trends in 2016. Examples of that trend are Xiaomi electronic products from China, budget airlines, SK Telecom’s low-cost Luna smartphone and Japan’s Ore-no restaurant chain, where customers dine on quality cuisine but stand rather than sit and leave as soon as the food is eaten. Kim also noted that Koreans need to prepare for what he calls Plan Z, the worst-case scenario. “You need a decent survival strategy that will allow you to buy things that you need, however economically stricken you are,” Profess Kim said. “Visually flawed fruits, refurbished goods and display products will become more popular.” Koreans will have contradictory consuming patterns next year, Kim predicts, in which, for example, they buy a pricey smartphone and download an app to make donations to charity.

Media and Online TrendCreative ads on Instagram attracting attention: Instagram, the social networking service that lets users share pictures and videos, introduced a new advertising service at a marketing event called ‘Instagram in Korea.’ The company recently introduced various types of advertisements such as pictures and videos, slides, and action-inducing ads for the first time in Korea. According to a survey Instagram conducted with the market research organization TNS, the portion of real life friends among followers was 50%. This means that ‘interest’ is more important than ‘friendship’ when following someone on Instagram. Furthermore, traffic was similar at different points during the day, indicating that use of the app was not restricted by time or place. The way most people communicated was by following an account (68%). ‘Liking’ (64%) ranked second, followed by ‘posting a picture’ (55%), ‘using hash tags’ (46%), ‘commenting’ (45%) and ‘posting a video’ (25%). Korean users picked the key words ‘inspiration’, ‘trend’ and ‘high quality’ as the differential values of Instagram. In addition, users showed great loyalty as Instagram is a place where one can solely concentrate on ‘me,’ and people are connected by what

they are interested in. The statistics were an overall report of the results of an online survey conducted with the participation of 1,246 users and contents of a symposium that was held with heavy users. Users are recognizing Instagram as an effective marketing platform where one can get plentiful information on brands.

Leisure Travel TrendKorea's credit card spending hit a record high: Korea's credit card spending hit a record high in the third quarter, data showed, pointing to a recovery in domestic demand from the fallout of the MERS. Total card spending reached 166.5 trillion won ($147.1 billion) in the July-September period, up 13.1% from a year earlier, according to the data compiled by the Credit Finance Association. It marks the first time that the purchases made with credit cards broke the 160 trillion-won mark, the data showed. The third-quarter figure also marks a second consecutive quarterly increase. During the January-March period, credit card spending fell to 145.3 trillion won from 152.1 trillion won from the previous quarter, but the figure rebounded to 157.2 trillion won over the following three months. Most of the sectors saw the amount of credit spending grow in the third quarter. In terms of online transactions, spending jumped 18.5% on-year to 15.7 trillion won, and that in the retail sector rose 13.8% to 23.8 trillion won, according to the data. Purchases with plastic at tourist facilities also increased 10.5% to 2.79 trillion won on the back of growing demand for traveling overseas.

Increase in Korea’s air passenger traffic: Korea's air passenger traffic rose from a year earlier in September, fueled by the increased number of people taking both domestic and international flights, the government said. In September, the country's overall air passenger traffic moved up a solid 7.3% on-year to 7.35 million, according to the Ministry of Land, Infrastructure and Transport. The number of international air passengers to and from Korea gained 4.3% on-year to 4.93 million last month, marking a rebound from three straight months of decline. The growth reflects the receding of the MERS scare that seriously hurt international air travel during the summer months.

Expansion of low-cost carriers in Korea: LCC’s aggressive expansion is clearly revealed in airline market share. In the first half of 2011, flights to foreign countries by the nation’s top five LCCs - Jeju Air, Jin Air, Air Busan, Easter Jet and T’way - made up 3.6% of all international flights. The rate surged to 13.2% by this year’s first half. Meanwhile, the share of international flights by the two major Korean airlines fell from 62.1% to 49.6% during the same period. This is the first time their share fell below 50%. Other than the five domestic LCCs, there are 20 foreign budget airlines in the market. Plus, Asiana Airlines will establish its second LCC, named Seoul Air, to pick up unprofitable routes that the nation’s biggest airline has avoided. The company expects to acquire a flying license from the Ministry of Land, Infrastructure and Transport within this year.

2015 Aloha Travel Mission: HTK successfully organized Aloha Travel Mission with 15 Hawai‘i partners for five full days

across the nation from Busan and Seoul to Incheon. The mission programs included 1) Market Briefing and Dinner with

24 delegates from Hawai‘i on November 3rd in Busan, 2) one on one Travel Mart in Busan on November 4th, 3) Aloha VIP

Reception in Seoul on November 5th, and 4) Aloha Overnight Workshop and mini mart in Incheon for November 6th ~

7th. Through the four major events, Hawai‘i partners could network with over 200 industry partners from working level to

managing level in the travel agencies, land operators, airline partners and media. Especially this year, HTK incorporated Design

Thinking program at the overnight workshop inviting 30 key travel agents selling Hawai‘i products. HTK helped the agents bond

with Hawai‘i partners to build closer relationship and ideate Hawai‘i tour products/services together through the comprehensive

workshop program of Design Thinking – a method of meeting people’s needs and desires in a technologically feasible and

strategically viable way. The following 15 Hawai‘i delegates participated in the mission in Korea:

1. Ala Moana Hotel

2. Alamo Rent-a-Car

3. Aqua-Aston Hospitality

4. Big Island Visitors Bureau

5. Courtyard by Marriott King Kamehameha’s Kona Beach Hotel

6. Fairmont Resorts Hawai‘i

7. Hertz Rent-a-Car

8. Hilton Hawai‘i

9. Kualoa Ranch

10. Makena Beach and Golf Resort

11. Maui Visitors and Convention Bureau

12. O‘ahu Visitors Bureau

13. Polynesian Cultural Center

14. Prince Resorts Hawai‘i

15. Simon Shopping Destinations - Waikele Premium Outlets

Ukulele Festival, Ukufafe: Capitalizing Hawaiian culture with ukulele, HTK sponsored and supported the 3rd Ukufafe,

an annual ukulele festival in Goyang-si, Korea. Ukufafe was organized on October 3rd this year attracting more than 6,000

general consumers to attend. The festival is intended to introduce the ukulele, one of Hawai‘i’s traditional instruments, and

increase awareness of its beautiful melodies in Korea. Decorated with Hawai‘i-themed images and video clips, the festival

featured a variety of ukulele performances as well as hula targeting various age groups from children to elders. HTK attended

the festival and provided promotional images and footages of Hawai‘i along with Hawaiian music played throughout the festival.

ActivityHighlights

Hawai‘i logo was also exposed in the festival stage, and its

communication channels including website (www.ukefafe.

org) with 1,500 daily visitors, Facebook page (www.facebook.

com/ukefafe2013) with 2,000 likes, and 15,000 copies of

promotional brochures. HTK also sponsored three ukuleles

to help organize a Guinness World Records challenge event

where more than 2,000 people had to be recruited to play

ukulele all together for one song at one place. Of total 1,200

people gathered up for the event, three lucky draw winners

were selected to be given the ukulele.

SBS TV “Oh! My Baby” Hawai‘i Special Episodes: HTK successfully broadcasted the last episode of popular family-oriented variety TV show, SBS <Oh My Baby> for Hawai‘i on October 3rd. SBS TV aired Hawai‘i with celebrity parent, Ricky Kim and his two children – daughter and son. The last episode consisted in-depth coverage of Polynesian Cultural Center with its various family activity programs at each cultural zone. The last episode also reached 6% viewership on average, and total advertising value equivalency is over $ 1.5 million excluding re-runs and other incidental PR opportunities.

2nd Mode Tour Travel Mart: HTK participated in the 2nd Mode Tour Travel Mart from October 29th to November 1st. The Mode Tour Show attracted 71,000 consumers to the show, which is close to 10% increase from last year. The number of tour booking increased to 40%, which is twice more in sales over 2014. For Hawai‘i, total 13 partners including Alamo Rent a Car, Atlantis Adventures, Aqua-Aston Hospitality, Hawaiian Airlines, The Kahala Hotel & Resort, Kualoa Ranch, Prince Resorts Hawai‘i, Roberts Hawai‘i, Polynesian Cultural Center, Starwood Resorts Hawai‘i, Trump International Hotel Waikiki Beach Walk, Waikiki Trolley, and Waikiki Resort Hotel participated in the show. During the fair, HTK executed one on one travel mart with retail travel agencies who are interested in Hawai‘i on the first day, and also held Hawai‘i destination and Hawai‘i partner educational seminar inviting 200 retail travel agencies during 90 minutes.

FIT Agents FAM Trip with Hawaiian Airlines: HTK organized FIT travel agency FAM trip on October 23rd ~ 29th in cooperation with Hawaiian Airlines visiting O‘ahu and Hawai‘i Island. HTK invited 10 FIT travel agencies, and visited O‘ahu for 2 nights and Hawai‘i Island for 3 nights including 1 night Hilo and 2 night Kona. Aston Waikiki Beach Hotel, Hilo Hawaiian Hotel and Hilton Waikoloa Village sponsored the accommodation for the FAM group, and Hyatt Place Waikiki, Courtyard King Kamehameha’s Kona Beach Hotel and Hardrock Café offered meals for the group. Big Island Visitors Bureau also supported the FAM group including activities and meals while the group was in the Hawai‘i Island. Tournet Hawai‘i and Wasabi Tour also supported the

MCI TrendOctober being high-peak season for MCI: October marked the beginning of the high-peak season for the MCI market. This is also when large companies, especially insurance and multi-level marketing areas, officially begin to hold incentive tours for employees. In particular, these companies can benefit from the extended three-day weekends, which included two Korean national holidays in October. In other words, they were able to complete their planned itinerary without having to take additional workdays off. In this regard, HTK supported the insurance and multi-level company incentive tours by collaborating with Korean travel agencies, local travel agencies and hotels, tour activity partners and land tour operators.At the same time, HTK prepared in advance for the active bidding season for next spring’s incentive tours. HTK engaged in PR and marketing to emphasize Hawai‘i as an ideal MCI destination, as well conducted aggressive sales call to partners involved in the bidding process. In addition, HTK met with airline representatives for information on next year’s group seat strategies. This information will be very helpful in preparing for changes in 2016.

Meet Hawai‘iUpdates

FAM group during their visit to Hawai‘i. Partnering with Hawaiian Airlines, HTK will continue to support the agents to develop diversely themed FIT travel products for Hawai‘i, especially including neighbor islands.

Ko Olina Resort Association visit to Korea (October 29): HTK helped organize a media event for Ko Olina Resort Association on October 29 th targeting 15 Korean media audiences of luxury-focused travel, golf, weddings, consumer travel, and trade press. Working with PacRim Marketing Group, HTK helped introduce Ko Olina Resort to the attending media, especially focusing on the leeward coastline of O‘ahu, home to Disney's Aulani Resort, Marriott's Ko Olina Beach Club, Four Seasons Resort O‘ahu at Ko Olina, Ko Olina Golf Club, and Ko Olina Marina. HTK attended the event to assist each of resort partner and help communicate with media at the event. HTK also executed an individual meeting with Four Seasons Resort O‘ahu at Ko Olina to provide in-depth market updates in Korea and how to promote the property with travel industry partners to be prepared for its opening in March 2016.

Instagram 1,000th follower event: Continuously working with Celebrity Chef Chung (@bistro_chaugi) to operate Instagram Korea page since September, HTK successfully achieved to increase number of followers into 1,000. HTK in cooperation with Chef Chung launched an event where the 1,000th follower of Instagram Korea page could receive a free dinner coupon at Chef Chung’s restaurant, Bistro Chaugi. With these efforts, Korea page now has 1,040 followers as of November 10th, a 38% increase compared to September.

• 2015 Hawai‘i-Korea Tourism Seminar (O‘ahu, November 20)

- Organized by Travel Press and supported by HTK• 2015 MCI Road Show in Busan (November 18, Venue: Lotte Hotel Busan)

- Requested Support: certificates of room, meal and activity • 2015 MCI FAM Trip with Hawaiian Airlines (O’ahu and Maui, November 20~25)

- Requested Support: accommodations, meals, activities, and transportation

UpcomingKorea Promotional Opportunities

For more information and participation, please contact Julia Koo of Hawai‘i Tourism Korea at julia@ipconnect.co.kr

MCI ActivityNu Skin Korea Group visiting Hawai‘i: In October, Nu Skin Korea Group successfully attended their incentive tour in Hawai‘i, with 147 attendees and 232 room nights. Because of its substantial size, HTK provided constant assistance to Nu Skin Korea Group, a major global multi-level cosmetics company in Korea, from general information on group venues and activities to more detailed support for the actual event period. This is a repeat business from their last incentive tour in 2011. As such, HTK worked extensively to ensure future repeat visits to Hawai‘i by Nu Skin Korea.

Hana Tour Travel Mart & Mode Tour Travel Fair: HTK attended Hana Tour travel mart on September 14th, which was organized by Hana Tour’s Theme Business Division. Through this opportunity, HTK MCI team promoted Hawai‘i as an ideal MCI destination and introduced the MCI incentive program, including other benefits, to sub-agencies of Hana Tour. From October 29th ~ November 1st, HTK participated in the 2015 Mode Tour Travel Fair as well, which is one of this year’s biggest Korean travel shows with over 80,000 attendees. The HTK MCI team provided support in serving B2C customers at the pavilion booth. Most importantly, HTK MCI team promoted the Hawai‘i MCI product through intensive consultations with over 20 MCI travel agencies, providing key information on MCI venues and the 2015 MCI Incentive Program.

Joint Sales Call with Disney, Aulani: HTK held joint sales calls with Disney – Aulani MCI sales representatives, visiting MCI teams at key travel agencies. HTK and Disney – Aulani emphasized the attractions available at the Ko Olina area, and appeal of the Disney – Aulani product. This introduced a fresh image, which will be helpful in diversifying the MCI Hawai‘i product.