Hello, this is Unique Good Company. Today we would like to talk about the future of tourism in the AI era and the future of tourism businesses!
On November 10, Unique Good Company CEO Song In-hyuk took the stage at the headquarters of the Korea Tourism Organization. President Park Seong-hyuk and all staff were present. The lecture topic was "Future of Tourism in the AI Era, Future of Tourism Businesses." Speaking to the people who create tourism policy and support the field, Mr. Song put forward the view that as we move into the AI era, offline experiences will emerge all the more. For example, Seongsu, where Unique Good's headquarters and store are located, was once a place of abandoned factories and shoe repair workshops that felt bleak in the evenings. Today it has become a huge melting spot that draws 100 million visitors a year. He analyzed that the more digital and AI develop, the more people pursue real, essential experiences on top of them.
The biggest enemy in the AI era is our own preconceptions
He also pointed out that what actually makes this transition hard for companies is not technology. People tend to think that changes in the era come from the arrival of new technology, but in fact they come from shifts in customers and markets. The problem is that we fail to notice this ourselves, keep moving the way we always have, and focus on the technology itself, which creates even greater difficulty.
Unique Good Company has been growing while building RealWorld, an experiential content platform. In other words, it focused on the smart experience content market of offline escape rooms. Escape room! Sounds familiar, right? So we believed our core customers were MZ generation and B2C customers.
But at the time, we didn't realize that this assumption was slowing our change. The MZ generation really loves escape rooms and unusual experiences. Looking only at this, you might expect that capturing the MZ generation, who are open to experiences and drive viral trends, would lead to success in the market. However, once you look at the revenue structure, the story changes.
They mainly come on weekends.
They come from far away, and they set aside a day and make a big decision to come.
They usually come 2 to 3 people at a time.
Once you break it down like this, the structural limits of RealWorld are already visible. Mainly visiting on weekends? Weekday sales are bound to drop. It's hard for a passerby walk-in customer to decide on the spot, "Let me spend two hours here." So the business ended up relying on weekends. And every time the seasons change, such as when it's too hot, too cold, or rainy, sales are heavily affected.
If execution has become faster,
we should instead redefine our core customer now
AI has dramatically increased the productivity of both individuals and organizations. In short, execution has gotten faster. Mr. Song pointed out that the cost of establishing new assumptions about the problems we face and verifying them has dropped by the same amount. He said that now is the perfect opportunity to redefine core customers and verify them quickly.
For example, there was a company in the UK facing the same concerns as RealWorld. It was the escape room company EscapeHunt, now known as XPFactory. They also struggled with customers who mostly visited on weekends. Then one day they took a close look at group customers who occasionally came by. Group customers came on weekdays and generated relatively large sales at once. A wish naturally arose: "Ah, I hope many corporate groups come..."
EscapeHunt (XP Factory) — a shift in target from MZ customers to corporate group customers led to success.
Thinking led to the question, "How can we get groups to come?" CEO Richard Harper realized that many companies were already located around his store. He judged that if they could absorb the demand for team building and workshops from those companies, they had a real chance. In other words, winning corporate customers would become a much bigger revenue source. He immediately shared this idea with his team. How did they respond? At first they met strong opposition. In short, the question was whether they were going to give up on the MZ generation.
Escape room stores usually keep their interiors, devices, and so on shrouded in mystery, and photography is prohibited. Corporate customers, however, review enough information in advance before deciding to visit. If the decision-maker can't explain it properly, they struggle to choose. So it became necessary to fully open up the store's interior. But doing so would reveal all of the traditional escape room's secrets, which raised the likelihood that existing customers would leave.
Even so, the CEO kept persuading his team, and they restructured their core customers around companies. This was an all-or-nothing question for an escape room company. What was the result? Today, converted to Korean won, it has annual sales of about 200 billion won and has become the first listed company among escape room businesses. It runs operations in dozens of regions around the world.
If you are considering a transition, act now!
That's right. AI is not the problem. We needed to fundamentally reexamine the business we were already doing. In other words, before searching for new markets, we should have first looked at the customers who were already coming to our stores. We create foot traffic in Seoul as well as in various regional spaces. Although we are in an industry related to escape rooms, strictly speaking we are closer to regional tourism. In that case, it made more sense to set our core customers as families and corporate customers rather than the MZ generation. In fact, a significant portion of our sales came from group customers. The market was clearly sending a signal, but the people inside the company found that change uncomfortable. They were caught in a bias, believing it wasn't true.
The problem was that the escape room genre bound our perspective. We could not let go of the fixation that the MZ generation was our core customer. In other words, we should have redefined our customers.
At first we also met the same kind of friction as our team members. Still, we did not stop trying to change our target, and now we are experiencing results that cannot be compared to before. Group customers from many companies and educational institutions are driving our sales. And what about general MZ customers? They have continued to visit on weekends. It was not all-or-nothing at all. In the end, our own preconceptions were what blocked us!
Change is not triggered across the whole organization but by small attempts in its parts
"Our organization won't change." Have you heard something like this often? Mr. Song introduced research on Autodesk. Around 2007, before the term AI even existed, Autodesk, with 8,000 employees, was regarded internally as a conservative and bureaucratic organization. Looking closer, however, waves of change, big and small, kept recurring throughout the company. At certain times, almost every day. Like a heartbeat, signs of change appeared in parts of the company, but they soon reverted. This happened several times.
What was remarkable, though, is that those changes created ripples, and a change that began in one organization spread to all of them, creating a spectacle. In other words, he explained that dramatic change is not possible with a single attempt, and that change does not happen across the whole organization but blossoms through the continuous attempts of individuals and departments.
Mr. Song conveyed this message to the Korea Tourism Organization staff in the audience:
"Even an organization that seems like it will never change,
like those who came to see me today,
through the continuous knocking of people who seek change,
will ultimately transform everything."
Rather than one mega event, a series of small attempts drives change
Earlier this year, Unique Good Company went through financial hardship and shrank from 58 people to just 6 today. To survive, it attempted an AX transition. It then generated sales on par with the previous year and succeeded in turning a profit. What's even more remarkable is what came next. Now that it is smaller, the company is operating with an agility and scale that cannot be compared to before.
In the AI era, people move to find more special experiences.
Offline experiences are expected to explode.
Mr. Song showed the audience large scenes where people gather wherever there is demand. These included the many participants at various regional events held nationwide by Unique Good Company's RealWorld, Dubai RUN, where more than 350,000 people ran on the avenue in front of Dubai's Museum of the Future, and the offline-based experiential content market in countries such as China, which has grown to over 10 trillion won. Introducing a range of domestic and international scenes like these, he emphasized that in the AI era, people will pursue offline experiences even more, and that our companies must take on challenges more nimbly and in diverse ways.
The next tourism trend will not be triggered by a single giant mega content. Countless small attempts gather to create something larger. Companies that started small but will become giants are already on the horizon. He advised the Korea Tourism Organization to pay attention to nano ventures that pursue small but unique and good attempts, rather than established companies, and to think about points where it could actively support them. This applies not only to outside companies but also to changes started by our own internal members. After all, every one of us is a nano venture!
Share this story with your own organization
Unique Good Company openly shares its experiences of falling down and getting back up. The B2B transition that went beyond customer bias, the AX transition achieved with 6 people, and even the Agent Intelligence Scale.
If you are a Korea Tourism Organization, local government, tourism foundation, or a company thinking about change, please invite Song In-hyuk to lecture at your organization. It will surely be a great source of strength for those who are continuing small attempts within their organizations.
If you are curious about organizational change and accelerating toward AX, feel free to contact Unique Good Company at any time. To avoid missing our next news, please add us as a blog neighbor and subscribe to our newsletter.
Unique Good Company: a company that has become smaller but goes further!
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