Spending was down during Chuseok holidaySpending over the Chuseok holidays was stingy this year, even among people traveling abroad.
According to a study by the KB Kookmin Card report released on Wednesday, credit card spending by its customers overseas during the Chuseok holidays between Sept. 22 and Sept. 26 amounted to nearly 348 million won ($311,000) per day. This was a 13.5 percent drop compared to last year’s Chuseok holidays between Sept. 30 and Oct. 9, which was 402 million won on average.
The number of swipes of the plastic made overseas during one of Korea’s two most important national holidays also fell. The daily average was 32,742 credit card purchases, a 12.5 percent drop from last year’s 37,415.
The country in which Koreans spent the most was Japan, followed by the U.S., Vietnam, Thailand and Canada. Last year the order was the U.S., Japan, Canada, Vietnam and France. KB Kookmin Card analyze this as a preference for traveling in Asia, which is cheaper than going to North America or Europe.
The fact that there were fewer days for Chuseok this year compared to last was another contributing factor. This year, many people took off for five days, while last year some people took breaks of up to 10 days.
But most of all, worries about the economy seem to be the biggest reason for the cutback on spending.
As of August, youth unemployment in Korea was at 10 percent, the highest level in 10 years, while the number of people employed among people in their 40s dropped 158,000 compared to a year ago, the biggest decline in 17 years.
It wasn’t only overseas travelers that spent less.
Overall daily domestic spending during the holidays actually rose to 208.7 billion won this year, up 4.1 percent from last year’s 200.5 billion won. The number of purchases also rose to 7.58 million per day, up 6.2 percent from last year’s 7.14 million.
But those increases were largely due to credit cards being used to pay for transportation including airplanes, express buses, trains, boats, rented cars and taxis. The daily average spending made on transportation grew 6 percent to 6.1 billion won while transactions grew 10.7 percent to 483,364.
Credit card use on airplanes, express buses and taxis grew 20.2 percent, 8.7 percent and 11.9 percent respectively compared to the Chuseok holidays last year. On the flip side, spending on trains, boats and rented cars fell 9.2 percent, 8.9 percent and 31.3 percent. This shows that while people used their cards for transportation to get to or return from their hometowns - where many Koreans spend Chuseok - transportation used for leisure activities here in Korea actually shrunk.
Credit card spending on local tourism or souvenirs also dropped. When compared to last year, the daily average number of purchases made with local travel agencies dropped 22.5 percent to 622 purchases and the value of the spending fell 8.7 percent to 50.3 million won.
The number of souvenir purchases dropped 34.3 percent in number and 34.9 percent in value. Daily average credit card use for lodgings including hotels was down 10.9 percent in transaction while the value fell 11.4 percent.
Some spending rose. Credit card use to rent DVD bangs (where you watch videos) and PC bangs (internet cafes) increased 90 percent compared to last year’s Chuseok, indicating that many people stayed indoors. Movie ticket purchase by value increased 7.7 percent.
But concert and exhibition spending dropped sharply. The daily average purchase of concert and exhibition tickets fell 30.6 percent to 6,432 and the value fell 30.1 percent to 121.7 million won.
The daily average spending at restaurants shrunk 8.9 percent in terms of transactions from 1.04 million last year to 955,315 this year. By value it fell 2.9 percent. Spending at department stores was down 16.6 percent in terms of transaction.
Even major discount stores and malls saw spending drop 12.4 percent in terms of transactions and 0.5 percent in terms of value.
But payments made on delivery apps surged 58.1 percent in number and 76.2 percent by value, again showing that many people either stayed at home or spent time at their relatives’ during the holidays.
“Consumers this year showed a stronger tendency to spend more practically during the holidays,” said a KB Kookmin Card official.
“Considering that spending not only dropped on overseas travel but also in tourism and leisure activities shows that credit card holders have spent this year’s holidays with the burden of a sluggish economy.”
BY JEONG YONG-HWAN [firstname.lastname@example.org]