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Korea Monthly Activity Report

Visit California Korea

June 2014

Prepared by: AVIAREPS Marketing Garden Korea 1. Market Intelligence / Market Conditions A. Economy

The Korean index of all industry production for May fell by 1.0% from April. The indexes for Wholesale & Retail Trade and Arts, Sports and Recreation-related services went up but Manufacturing and Construction dropped. The Index of Services in May increased by 0.6% from April and 0.6% from the same period last year.

The Korean government is striving to reform laws to create jobs and

boost investment. It plans to select projects in major industries that will have a large effect on both job creation and investment and, working closely with the National Assembly, plans to adjust any related regulations to ensure these projects move forward. Businesses and private sector individuals which have to comply with regulations will be actively involved in identifying and monitoring regulation change and implementation.

The average interest rate on new deposits in May was 2.59%, down 1 basis

point from April. The average interest rate on outstanding deposits at end of month was 2.11%, down 1 basis point from April.

The Composite Consumer Sentiment Index (CCSI) for June stood at 107,

up two points from May. Consumer sentiment on current living standards was 92, one point higher than the previous month. The outlook sentiment was two points higher at 101. The expectation for inflation in the coming 12 months was 2.8%.

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The net barter terms of trade index decreased by 0.4% year-on-year in

May, and the income terms of trade index also decreased by 2.4% year-on-year. The export volume index fell by 2% but the import volume index rose by 0.6% year-on-year.

B. Outbound Travel Market

Korea Tourism Organization reported the number of Korean outbound travelers in May was 1,223,003, an increase of 3.2% on May 2013. Total outbound numbers up to February this year were 6,335,433

C. Competitive Environment

Los Angeles Tourism & Convention Board launched its Discover Los Angeles promotion to introduce the destination's tourism attributes and new features to tour operators and industry partners. The promotion seminar highlighted tourist spots and accommodation facilities and introduced the new Tom Bradley International Terminal at LAX.

The French Tourism Development Agency and French Korean Chamber

Of Commerce and Industry (FKCCI) co-hosted the 3rd French-Korean golf tournament, an amateur event designed to improve business relationships between Korea and France. Highlighting awareness of the French brand “Rendez-vous en France", the tournament was sponsored by the two influential organizations that provide a wide range of business opportunities in both countries.

D. Consumer Trends

Recovery signs for Korea's domestic economy might be found in the results of a central bank survey showing a key measure of consumer sentiment rose in June after a modest fall in May. The decline in May was blamed on the Sewol ferry disaster that killed over 300 people and resulted in

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a softening in retail and travel sales. Bank of Korea data showed the nation’s composite consumer sentiment index rose to 107 in June from 105 in May. A reading above 100 means consumers who expect economic and living conditions to improve for the coming month outnumber those who expect them to deteriorate.

E. Travel Trends

Korea's tourism industry has been struggling in the wake of the April 16 Sewol ferry disaster as people refrain from travel or engaging in leisure activities. In an attempt to revive the sagging sector, the government has introduced measures to encourage travel and spending on cultural and leisure activity during the summer holiday season. It has launched a nationwide tourism promotion campaign and extended financial support to hospitality businesses. The government also plans to organize a domestic tourism promotion campaign in mid-June to encourage people to take more days off work and an associated campaign to urge workplaces to encourage employees to travel.

F. Media Trends

The Fair Trade Commission (FTC) has revised its guidelines to include a new rule covering bloggers or posters who write articles for portal sites, blogs or SNS channels. The authors of such content should clearly declare they are doing so in exchange for economic benefits if they are writing on behalf of a company .Under the new guidelines, the author must identify which company is providing he or she the economic benefit and which specific product in the article they are being paid to promote. The kind of economic benefit they are being given must also be specified, whether it be cash, a gift certificate, commission for each product, or the product itself. The disclosure has to be placed at the beginning or the end of the article to make it easy for the reader to notice. If the FTC finds a promotional article online that does not contain a disclosure, it can order the advertiser to correct it or impose a fine of up to 2% of the revenue the company earns from sale of the goods. If advertisers don’t comply with the order, a criminal charge could be filed against them.

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G. Airlift

International flights maintained normal growth despite the worsening plight of domestic airline services in the wake of the Sewol ferry tragedy. The total number of international passengers rose by 15.6% year-on-year as domestic passenger numbers declined by 3.3%, Ministry of Land, Infrastructure and Transport data showed.

Brand USA will partner with Asiana Airlines on a sales incentive promotion

to celebrate the carrier's adoption of the Airbus A380. The June 15-August 15 promotion will target tour operators and travel agents to generate sales of Asiana tickets through its online reservation system Asiana Abacus. .

I. ACTIVITY UPDATE A. Travel Trade Marketing A-1. Major Sales Calls Pharos Tour: as a ski tour specialized travel agent, Pharos Tour has been

promoting Canada and Europe. It wishes to develop Mammoth Ski Resorts inclusive tour packages so VCK introduced the person in charge of Mammoth Lakes Tourism for future communications.

Exciting Tour: to meet the niche market in golf and ski, Exciting Tour plans to develop California tours including Pebble Beach Resorts and various ski resorts. VC Korea provided information about golf courses and ski resorts in California and also provided contact details.

O Tour: O Tour has been selected as an exclusive tour operator for

American Airlines’ West Coast products. Twelve key travel agents are going to sell California tour products developed by O Tour so VC Korea met with O Tour to discuss about future California inclusive tour itineraries and provided them with California Road Trips and maps.

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Saturn Tour, Finn Tour and Segyero Tour: the three travel agents made

up of a US consortium to develop US related products. Saturn Tour has a special airfare while both Finn Tour and Segyero Tour can develop a variety of California tour products with their diverse expertise in FIT market. With these strengths and price competitiveness in the market, the three travel agents plan to execute joint advertisement by sharing cost so VC Korea provided contents and recommendable itineraries for them to launch a number of different California tours.

Chalet Travel: Chalet Travel has

been promoting California from last year, showcasing a variety of tours for high-end FITs. To meet the increased demand to US regions, the travel agent will conduct its own FAM Tour to San Francisco. VC Korea met with them to provide recommendable itineraries for Northern California and two San Francisco CityPasses for their visit. During their individual FAM Tour, Chalet Travel plans to meet hotel partners and inspect shopping outlets and restaurants, which will be ideal for their customers.

Singapore Airlines: to promote its direct flight to San Francisco, Singapore Airlines plans to bring Shinhye Park, the main female leading actress featured in the drama, “The Heirs,” for celebrity marketing. VC Korea will support the celebrity’s visit to California in return for receiving images, which can be utilized for VC Korea’s blog development

Asiana Airlines: as Asiana is upgrading its aircraft for OZ202 and OZ201

flight to Airbus 380, VC Korea, together with LA Tourism, met with the online marketing team of Asiana to kick off a special consumer event on Asiana’s website. To create a buzz, LA Tourism will sponsor

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accommodation vouchers for the free trip prize and VC Korea will sponsor 30 smartphone bluetooth speakers.

A-2. Major Co-op Activities and Planning

(1) Discover America Culinary Seminar

The Discover America Culinary Seminar with a "food" theme was conducted, inviting 150 travel agents and media on June 30 at Westin Chosun. After the US Embassy, US Commercial Service and Sam Cass, a chef from the White House gave congratulatory speeches, each US related DMOs including VC, SF, LA, Seattle, Nevada, Las Vegas, Hawaii and NYC delivered presentations. VC took this opportunity to introduce California's fine dining restarunts and wineries, especially restaurants and wineries introduced in the movie, "Santa Barbara".

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B. Communications B-1. Media Monitoring (Clippings and Publicity Calendar) In June, Visit California Korea secured PR coverage in a total of 25 publications, with an estimated circulation of over 24 million and an estimated advertising value of US $284,000. VC Korea distributed the following press releases to key media representatives in Korea and followed up to ensure coverage. June 5th: Buy Canon 100D and Grab the Chance to go to Santa Barbara! [Press Release Summary] Visit California Korea is co-hosting a photo-taking expedition event to Santa Barbara with Canon Korea and is recruiting 10 applicants until July 6. Application to the event is open to those who purchase the Canon EOS 100D model from licensed stores. Once the applicant registers the camera’s serial number on Canon’s website at www.canon-ci.co.kr, he or she has to provide reasons for wanting to visit Santa Barbara and provide their blog URL in order to complete the application form. The selected group of 10 will get to experience California’s beauty and diverse activities firsthand and explore Santa Barbara and different regions in California for 5 nights and 7 days in September. Winners of the event will be announced on Canon’s website on July 18. June 10th: Heaven for Family Vacation, Let’s Visit Southern California this Summer! [Press Release Summary]

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With beautiful weather all year round, Southern California is the perfect vacation spot for families and there are various events taking place in the region this summer. SeaWorld San Diego SeaWorld San Diego is featuring extended park hours, running until 10 p.m. for the summer vacation season. Moreover, special nighttime animal shows and fireworks will be featured at the park. http://seaworldparks.com/en/seaworld-sandiego San Diego Zoo From June 28 to September 1, the San Diego Zoo is featuring extended park hours until 9 p.m. This year’s Australian theme highlights the Australian Outback Exhibit and entertainment includes Australian acrobatics show, magic act and hoola hoop contests. http://zoo.sandiegozoo.org Comic-Con International Comic-Con International, the largest comics and pop culture event in the United States, will be held from July 24 to 27. Tens of thousands of artists, celebrities and fans of pop culture will participate and visitors can be Superman or Wonder Woman for a day at this event. www.comic-con.org/cci B-2. Media FAM/Projects (1) Santa Barbara Film Project The movie ‘Santa Barbara’ will be released on July 17 in

approximately 90 major theaters nationwide (30-40 in Seoul alone). VCK will hold a special movie premiere on July 16 inviting key media and travel agents. To maximize PR results, VCK is currently working side by

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side with the production company and its PR agency in organizing events and PR activities for the movie. VCK is also working closely with UA and Santa Barbara CVB for local PR activities targeting media, travel agents, and consumers. During VCK’s movie premiere, a special wine tasting reception will be prepared to showcase Santa Barbara wines sponsored by SBCVB.

Prior to the movie release, VC Korea

will pitch story ideas about Santa Barbara and distribute press releases to major print publications to generate coverage and maximize the visibility of the destination.

VC Korea will develop a new “Santa Barbara” episode on the VCK microsite with the copyright free photos of the movie received from the movie production company. Through the episode, VC Korea will promote Santa Barbara as a “wellness and relaxation” destination.

(2) Group Media FAM with Delta Air Lines

VC Korea conducted a group media FAM to Southern California with Delta Air Lines from June 22 to 27 in order to educate key media in Korea on the region’s vast tourist resources and increase its visibility in the Korean market. For this FAM, VC Korea secured four top lifestyle and living monthly magazines.

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The media group visited Southern California for 6 days and 5 nights experiencing San Diego for three days and Orange County for two. VC Korea negotiated with the participating media to maximize coverage on the two regions, achieving over 500,000 impressions.

Delta Air Lines provided complimentary tickets for all the FAM attendants since Delta was also keen on promoting their new Incheon-Seattle flight launch in June along with its connectivity to California gateway cities. The cost for local handling was covered by VC Korea and support was received from San Diego Tourism Authority and Anaheim Orange County Visitor & Convention Bureau.

Details of the FAM is as below:

FAM Period: June 22 – 27 (5N6D) Total Number of FAM Attendants: 6 (4 editors, 1 photographer, 1

from VC Korea) Covered Areas: San Diego (3 nights) and Orange County (2 nights) Invited Media:

• Home & Living Style: living & lifestyle magazine (100,000 copies) • Lemon Tree: lifestyle magazine (100,000 copies) • My Wedding: wedding/honeymoon magazine (100,000 copies) • Living Sense: living magazine (100,000 copies)

Through this group media FAM, VC Korea strengthened Korean media’s

perception of San Diego and Orange County as well as enhancing the overall interest and awareness of California.

(3) Ms. Jin-seo Yoon’s Visit to Southern California

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Visit California Korea tied-in with Ms. Jin-seo Yoon, the heroine of the Korean film “Santa Barbara,” who is also becoming a new rising writer, for the production of her travelogue based on her experiences. Having traveled to California numerous times, most of the contents in her travelogue will include her personal travel experiences in California, especially in Santa Barbara.

For the book production, Ms. Yoon traveled to California from June 18 to 28 and drove from San Francisco to Los Angeles to collect contents for her book. She will contribute 4 pages of travel editorial to Cosmopolitan Korea covering California in its August issue. Moreover, she will contribute a one-page reflection on her travel experiences in California for VCK. The contributed material will be uploaded on the VCK blog along with Ms. Yoon’s photos to attract more visitors.

For this project, VCK worked with Hertz and United Airlines to arrange Ms. Yoon’s visit and sponsored the celebrity with a roundtrip business class air ticket of US $4,000.

(4) Co-op Project with Monthly Fashion Magazine InStyle VC Korea is organizing an off-and-online combined celebrity fashion shoot

project covering Northern California including San Francisco with InStyle, one of the top fashion and trend magazines in Korea. For this project, VCK will receive support from Brand USA and Singapore Airlines.

In the fashion shoot slated for release in September or October, Ms. Shin-hye Park, the heroine of the successful Korean soap opera “The Heirs,” will be featured on 4-6 pages. InStyle will also release a 1-page travel advertorial in the same issue besides the photo shoot introducing trendy spots in California such as shopping malls, eateries and tourist attractions. Moreover, VCK will receive at least 10 photos from the photo shoot to utilize them on the VCK blog and SNS channels.

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To minimize the budget, VC Korea will involve Brand USA to support the project, while Singapore Airlines will sponsor air tickets for all 10 shooting crew. Additional cost on accommodation and the rest of the expenses including transportation, meals, guide, etc. will be covered by InStyle. [Media Tour Overview] Publication: InStyle, monthly fashion and trend consumer magazine

with a circulation of 100,000 copies Media Tour period: August 16 – August 20 Crew: 10-11 pax (Shin-hye Park, photographer, stylist, manager,

InStyle staff) Theme: celebrity’s journey to San Francisco Expected Coverage: fashion shoot on printed magazine and a 1-page

travel advertorial about California in September or October issue

[Expected Budget Required] Budget Allocation:

VC Korea: US $3,000 Partner Budget Allocation: Brand USA: US $5,000 SQ: air tickets for 10 crew members (US $30,000 value)

[Expected PR Value] Fashion shoot coverage (minimum of 4 pages) = US $40,000 Travel advertorial = US $10,000 Online exposure value = US $6,000 Total Expected PR Value: US $56,000

B-3. Press Office - Media Liaisons Visit California Korea made 19 press calls to the following major travel trade

newspapers, daily newspapers and magazines to pitch California feature ideas: Name of Reporter Name of Publication

1. Ms. Kwon Cho Rong Korea Travel Information Times 2. Ms. Cho Byeong Rye Korea Travel News

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3. Ms. Ko Seo Ryeong Korea Travel Times

4. Ms. Kang Se Hee Global Travel News 5. Ms. Jang Gu Seul Global Travel News 6. Mr. Park Jong Hang Hankook Ilbo 7. Mr. Jang Won Suk The Economist 8. Ms. Lee Woo Young The Korea Herald 9. Mr. Chun Ki Hwan Maeil Business Newspaper

10. Ms. Kim Hye Jin My Wedding 11. Mr. Hur Tae Woo The Lonely Planet 12. Ms. Kim Si Woong Living Sense 13. Ms. Kim Eung Jung Lemon Tree 14. Ms. Kim Tae Hee Morning Calm 15. Mr. Ahn Hwy Seung ABROAD

16. Ms. Seo Da Hee The Traveller 17. Ms. Chung Soo Hyun Vogue Girl 18. Ms. Kim Kang Sook InStyle 19. Ms. Yi Ji Hyun Homeliving & Style

C. Technology C-1. Canon Korea Co-op/Power Blogger Fam to Promote Movie “Santa Barbara”

VCK will conduct a blogger Fam tour in collaboration with Canon Korea and Delta Air Lines to promote the Korean movie “Santa Barbara”.

Event Plan

Power Blogger Recruiting Period: May 12 - June 30, 2014 via Canon’s website, microsite and blog and SNS

Application and recruiting process: anyone who purchases Canon “EOS 100D white” can apply online. Among them, top 10 influential bloggers will be

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selected through appropriate judging criteria with Canon

Confirmed FAM Period: September 5-11 (6N8D)

Size of group: 13 (10 Power bloggers and 1 from Canon, 1 from VCK, 1 from Expedia)

Regions to be covered: San Diego (2 nights), Santa Barbara (3 nights) and LA(1 night)

C-2. Movie “Santa Barbara” New Episode Development on the Microsite

VCK will launch a new episode to promote Santa Barbara as a romantic and healing destination targeting couples and honeymooners to drive more traffic to the site.

The movie poster and teaser are being disseminated to the public and are being exposed to influential consumer brands and numerous media SNS channels with various online events.

VCK uploaded the teaser and music video on VCK’s Youtube channel.

Links:

Teaser: http://youtu.be/ryUTUDtdTSY

Music Video: http://youtu.be/7SkUvd6LtGk

VCK will utilize movie related contents to promote Santa Barbara such as the poster image, video clips and still cuts.

C-3. Newsletter & Web Statistics Microsite e-Newsletter: VC Korea distributed the June e-newsletter, covering the topics as below:

Title: Best Southern California Beaches Getaway

Best Top 3 Summer Beaches in Orange County o Laguna Beach

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o Huntington Beach o Newport Beach

Inside Scoops: Yosemite Grant 150th Anniversary o Introduction of various events celebrating

150th anniversary of Yosemite National Park

A Culinary Excursion Through the San Francisco Bay Area o Introduction of recommended restaurants

for 4-day culinary tour in San Francisco Bay Area

Day 1: The Napa Valley/Berkeley

- Rubicon Estate - French Laundry - Silverado Brewing Company - Sharffen Berger - Cheese Board Collective

Day2: San Francisco

- Boudin’s - Lisa Culinary Excursions - Michael Mina

Day3: San Mateo and Livermore Valley

- Half Moon Bay Brewing Company - Sam’s Chowder House

Day4: San Jose/Santa Cruz

- San Pedro Square Farmer’s Market - Shadowbrook

Festivals and Event News in California

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o Introduction of Hot Summer Nights in Old Town Temecula

California News o Introduction of release date of movie ‘Santa Barbara’ with its poster

image

California’s Choice - What’s HOT on Youtube! o Introduction of Visit Santa Barbara’s video under the title ‘The Outdoors

is Calling’

June 2014 Website/Microsite Statistics

Website Microsite

Visitor

Visits Website Microsite Blog

Visit 4,689 649 1,642

Unique Visitors 3,755 560 1,344

% New Visits 75.07% 76.35% 79.11%

Avg. Visit

Duration

00:03:26 00:01:36 00:02:03

Bounce Rate 52.31% 75.35% 73.45%

Pageviews 17,293 936 3,785

Pages / Visit 3.69 1.58 2.31

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Blog

The number of visitors on the VCK’s blog increased by 49.41% compared

to the previous month whereas the number of visitors on the VCK website increased by 1.43%.

Visitor Type

4,623

4,689

May June

695

649

May June

1,099

1,642

May Jun

77.4% 75.3%

22.6% 24.7%

May June

New Visitor Returning Visitor

81.2% 76.4%

18.8% 23.6%

May June

New Visitor Returning Visitor

84.8% 79.2%

15.2% 20.8%

May June

New Visitor Returning Visitor

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Device

The growth rate of mobile/tablet users on the VCK website, microsite and blog increased consistently compared to the previous month.

Acquisition

59.90% 58.80%

40.10% 41.20%

May June

Desktop Mobile/Tablet

82.50% 82.40%

17.50% 17.60%

May June

Desktop Mobile/Tablet

58.60% 51.20%

41.40% 48.80%

May June

Desktop Mobile/Tablet

3,043 3,300

903 726 393 359 284 273

May June

Organic Search Direct

Referral Social

203 199

190 160

183 121 19

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May June

Organic Search Direct

Referral Social

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The number of visitors on the VCK blog through organic research increased by 47.40% and the number of visitors on the VCK blog through referral increased by 40.12% as well compared to the previous month.

Behavior(Bounce Rate)

# # #

730 1,076 170

162 172 241

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May June

Organic Search Direct

Referral Social

55.70%

52.49%

59.25%

56.75%

50.89%

47.08%

41.55%

45.05%

May

June

Social Referral

Direct Organic Search

76.35%

75.88%

81.58%

67.50%

80.33%

83.47%

84.21%

84.21%

May

June

Social Referral

Direct Organic Search

80.27%

80.39%

75.88%

74.69%

54.07%

41.91%

78.95%

65.00%

May

June

Social Referral

Direct Organic Search