[Why&Next] Travel Agency Appoints Former Card Company CEO... What's Behind the Move?

Hanatour Appoints Jo Jwajin, Former Lotte Card CEO, as New Chief Executive

Introducing Executive Officer System for Greater Management Efficiency

Group Package Growth Momentum Slows

Directly Targeting Inbound Travel Demand to Enhance

HanaTour, the nation's leading outbound (overseas travel by Korean nationals) travel agency, is reorganizing its leadership structure by appointing a new Chief Executive Officer (CEO) for the first time in more than six years. Alongside this move, the company is expected to shift its focus from the slowing overseas group package market to strengthening its inbound (tourism to Korea by foreigners) business aimed at individual travelers visiting Korea, with the goal of increasing corporate value.

According to the Financial Supervisory Service's electronic disclosure system on July 9, HanaTour announced it will hold an extraordinary general meeting of shareholders on August 18 to propose partial amendments to its articles of incorporation to introduce an executive officer system. Under the new system, instead of having an internal director serve as CEO to oversee major issues, the company will establish an entity equivalent to the CEO, which will be supervised by the board of directors, while executive officers will be responsible for executing company work and exercising the authority of company representation. The company explained that this will clarify the responsibilities and authorities of management and establish a more efficient management structure.

Hana Tour Headquarters, Jongno-gu, Seoul. Photo by Jo Yongjun

Limitations of Group Packages... Growth Momentum Slows

With the reorganization of the leadership structure, Song Miseon, who was appointed CEO in March 2020, will step down, and Jo Jwajin, former CEO of Lotte Card, has been named the new CEO of HanaTour. Jo is expected to be officially appointed following the extraordinary general meeting of shareholders next month.

During CEO Song's tenure, HanaTour focused on improving the company’s financial structure, which was hit hard by the COVID-19 pandemic, and on strengthening the competitiveness of its core travel business. Notably, the company exited non-core businesses such as duty-free shops and hotels, while restructuring its mainstay overseas group package travel products to focus on premium mid- to high-priced packages (Hanapack 2.0) to improve profitability. As a result, the proportion of HanaTour customers using mid- to high-priced packages increased from 8% in 2019 to 31% in the first quarter of this year.

However, since the transition to an endemic (periodic infectious disease) phase, the outbound business, which had shown growth as the overseas travel market returned to normal, has begun to stagnate. The share of mid- to high-priced packages in HanaTour’s total gross merchandise value (GMV) peaked at 54% in the third quarter of last year, then declined to 48% in the first quarter of this year. In terms of customer numbers, the proportion has remained in the low 30% range since last year. This is due to the shift in outbound travel patterns toward individual travelers (FIT) rather than travel agency package products.

The company’s consolidated sales increased from 411.6 billion won in 2023 to 616.6 billion won the following year, but then decreased to 586.9 billion won last year. Operating profit rose slightly from 50.9 billion won in 2024 to 57.6 billion won. However, net profit for the period was halved, dropping from 99.1 billion won to 47.4 billion won. HanaTour explained, "In the fourth quarter of last year, the company recognized about 18.7 billion won in provisions for its affiliate Kkum Co., Ltd. and about 3.6 billion won in one-time costs for demolishing an old hotel owned by HanaTour Japan, which resulted in a year-on-year decline in net profit."

K-Tourism Renaissance, Strengthening Overseas FIT... Focus on Value Enhancement

Alongside its leadership restructuring, HanaTour plans to pursue mid- to long-term strategies centered around three pillars of growth: expanding the premium travel market, fostering the inbound business, and implementing AI-driven digital innovation.

The most notable aspect is the expansion of inbound travel services. Until now, domestic outbound travel agencies have paid relatively little attention to inbound travel demand. Typically, overseas travel agencies recruit group tourists and set travel destinations and itineraries in Korea, with domestic agencies collaborating and earning commissions. HanaTour, however, is now planning and directly marketing inbound travel products, especially targeting FIT from Japan and Southeast Asia, in response to growing foreign interest in K-culture.

Jo Jwajin, former CEO of Lotte Card, has been appointed as the new Chief Executive Officer (CEO) of Hanatour. Photo by Lotte Card

In addition, the company will strengthen its global bound business (connecting travel between third countries based on inbound services) through partnerships with local travel companies. Notably, on July 3, HanaTour launched a joint venture, "Festrip," with ABOEX Travel and Tours, a mid-sized Philippine travel company. HanaTour stated, "Although the volume of outbound travel by Korean nationals is increasing, the domestic market is essentially saturated because more customers are planning their own trips rather than using travel agency products. Through establishing joint ventures with local travel agencies in key Southeast Asian countries such as Indonesia, Vietnam, Thailand, Malaysia, and the Philippines, our goal is to connect travel demand from these regions to Korea and Japan with inbound demand for HanaTour ITC and HanaTour Japan."

The appointment of a new CEO with expertise in marketing and strategic planning is also seen as being closely related to this shift. During his tenure as CEO of Lotte Card, Jo Jwajin strengthened profitability and growth by restructuring the asset portfolio and innovating the cost structure. At Hyundai Card, he led the launch of alphabet marketing and "Hyundai Card Black," demonstrating his ability to build premium brands and deliver differentiated customer experiences. He also has global business management experience, having led the U.S. subsidiary as CEO of Hyundai Capital America and spearheaded expansion into Canada and Brazil.

As these changes are also linked to the exit strategy of IMM Private Equity (IMM PE), HanaTour’s largest shareholder and private equity fund operator, the company is expected to focus on finding new growth drivers and enhancing profitability to increase corporate value going forward. An industry insider commented, "Despite its premium as the No. 1 player in the travel industry, HanaTour’s stock price has declined significantly, so a rebound is urgently needed. The leadership restructuring can also be seen as a move to accelerate the exit process."

This content was produced with the assistance of AI translation services.