Rents cut for airport businesses

Finance Minister Hong Nam-ki, center, speaks during a meeting held in central Seoul Wednesday regarding risk management for the economic fallout from the Covid-19 pandemic. [YONHAP]

The government on Wednesday announced it will include conglomerate-run duty-free shops in its rent subsidies for struggling airport businesses, following similar measures cutting rents for smaller airport businesses.

Rent for airport businesses associated with conglomerates will be cut 20 percent under the new measure. For smaller businesses, the existing 25-percent rent cut has been expanded to 50 percent.

With the coronavirus pandemic hammering travel and related industries, the government has unveiled a steady stream of measures intended to ease the economic pain for affected businesses.

The announcement marks the third government initiative specific to the tourism industry so far.

“It’s not a huge comprehensive measure, but we have included several small benefits that would resolve some of the emergency situations,” Finance Minister Hong Nam-ki said during a Wednesday meeting focused on crisis management. “Since Covid-19 was announced as a global pandemic, the outbreak, which is expected to have an unprecedented impact on the global and local economies, is starting to show signs of a full-fledged shock to the real economy.”

Hong said the government’s measures are intended to swiftly help small- and medium-sized businesses, including self-employed store owners who are teetering on the brink of closure following several months of coronavirus-driven difficulties.

Despite optimism at the year’s outset, the tourism industry appears to be the hardest-hit sector, according to government data, after travel to and from Korea largely evaporated last month.

The number of foreign tourists coming to Korea in March fell 94.7 percent compared to the same month last year. In January, the number of arrivals grew 15.2 percent on year. But in February, as China enacted lockdowns and Korea limited travel in an effort to contain the new coronavirus, the number of foreign tourists shrank by 43 percent on year.

Similarly, the number of Koreans traveling abroad in March dropped 94.8 percent compared with March 2019.

Business revenue at Incheon International Airport, including foreign currency exchange services, restaurants and duty-free stores, registered a 44 percent on-year decline in February. In March, revenue plummeted to 78 percent. Duty-free stores account for 87 percent of business revenue at the airport.

The drop in business is fueling increased worry over job security as many stores have shortened business hours while placing more employees on unpaid leave

As of March 1, there were 12,000 people working at commercial stores at Incheon International Airport. That number had dropped by at least half as of March 20, following a wave of canceled flights and routes.

Separately, the government also pledged to help out the movie industry, which has also suffered deep losses since the outbreak began. The number of people going to the movies plummeted 87.7 percent last month.

The government said it plans to provide discounts on 1 million movie tickets to attract moviegoers once the spread of the virus stabilizes.

The government said it will also help cover the marketing costs for about 20 movies which have seen release dates pushed back or put on indefinite hold. The government will also provide funding to about 20 movies that were forced to suspend production.

The government will also provide 247.6 billion won ($201 million) to small- and medium-sized mobile phone vendors, including rent subsidies.

The government also said it has expanded its previous investment in 5G network coverage for areas like subways, department stores and university campuses that normally attract large crowds of people. The government is increasing funding from 2.7 trillion won to 4 trillion won.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]