Local tourism struggles as Koreans go overseasMany Koreans are packing their bags as this week is considered the first week of the summer vacation.
Usually the last week of July and the first week of August are seen as the peak weeks for summer vacations. In fact, a survey by Job Korea conducted last month on 1,002 adults showed that 42 percent were taking their summer vacation at the end of July or the start of August.
Even President Moon Jae-in left for his first vacation as the country’s president on Sunday, heading off on a seven-day trip starting in Pyeongchang, Gwangwon.
But while Moon settled on a domestic vacation, many Koreans are heading abroad. The travel industry estimates that Korean’s traveling abroad will reach a new record this summer, while the domestic tourism industry is expected to continue to suffer.
On Sunday alone over 204,000 people departed from Incheon International Airport, according to the airport authority on Monday, which is an all-time record for a single day.
Among that figure, 109,000 people traveled abroad, which is also an all-time record for a single day. That’s roughly 5,000 more than the previous record, which was set on July 31 last year.
The airport expects the figure to further increase in early August.
As a result the industry estimates the number of Koreans traveling abroad between July 15 and August 15 to increase to 2.81 million, 1.2 percent more than the same period last year.
Spending on traveling has exceeded $2 billion every month for the last six consecutive months, according to the Bank of Korea.
While Korean travelers are increasing their spending overseas, the local tourism market is struggling especially due to the drop in Chinese tourists resulting from heightened tensions with Beijing over the deployment of the Terminal High Altitude Area Defense (Thaad) antimissile system since July last year.
In fact, Statistics Korea announced last week that the service industry - including restaurants and lodging - experienced a 4 percent drop in its earning index last month compared to a year ago. The service industry has been suffering year-on-year negative growth for the last 10 months.
The data on the service industry is based on revenue, which means that the earnings of restaurants and lodging has been shrinking.
The huge difference in spending of Koreans abroad and the spending of tourists here in Korea has resulted in the largest travel account deficit in May, which amounted to $1.36 billion, a significant increase from $250 million in May 2016.
“The struggling in the lodging and restaurant business could result in shrinking jobs in the long run and thus the government needs to come up with plans to revitalize the economy,” said Lee Chang-mok, head of NH Investment and Securities research center.
Some of the market experts pointed out that there’s a need for the government to adopt policies that would encourage Koreans to spend more in the domestic markets such as lowering the consumption taxes on some outdoor activities such as golf and yachting.
BY LEE HO-JEONG [email@example.com]