Bathhouse businesses feel brunt of soaring utility rates

Economy

Published: 29 Dec. 2022, 19:32 Updated: 29 Dec. 2022, 19:55

Bathhouse businesses feel brunt of soaring utility rates

Wonsamtang bathhouse, one of the oldest bathhouses in Seoul, in Yongsan District, central Seoul, before its closure this week. [JOONGANG PHOTO]

Increasing public utility bills are taking a heavy toll on public bathhouses, one of the businesses that was hit hardest by the Covid-19 pandemic.

Wonsamtang, once a famous public bathhouse in Yongsan District, went out of business in April. Established in 1966, it gained much popularity after appearing on the popular reality television show “Infinite Challenge” (2006-2018) and in the Korean television drama series “Reply 1994” (2013).

“On the day we closed business, I sat down holding hands with one of my employees who had worked at our bathhouse for over 50 years and cried,” said Jin Joong-il, 82, the owner of Wonsamtang. “I'm old, and the bills were skyrocketing, we couldn’t endure anymore."

A total of 174 public bathhouses, or about 20 percent of the nation's total, went out of business from 2019 to last year, according to data from the Seoul Metropolitan Government. Sixty-eight businesses have shut down so far this year.

The coronavirus is considered to be the major cause of the decline as people tended to avoid crowded places in the height of the pandemic. A jimjilbang, a similar establishment to a bathouse, was also linked to one of the first mass outbreaks of Covid-19 in Korea back in 2020, creating stigma for public gathering places such as bathhouses.

To make matters worse, public utility bills such as electricity, water and gas have been continuously raised.

Gas prices for bathhouses increased twice this year, with a 17.4 percent increase from the prior 15.6 won ($0.012) to 18.32 won per megajoule in October.

"There are many places that have shut down or closed without even being able to report their closures because the demolition costs alone are more than 100 million won," said Jeong Seong-tae, chairman of the Korea Bath Industry Association.

Water supply rates for bathhouses in Seoul also rose from 360 won to 420 won per cubic meter depending on usage in 2020, to 440 won regardless of usage this year. From next year, the price is expected to further rise to 500 won.

Electricity rates also rose by 19.3 won per kilowatt per hour in April, July and October this year. Due to the nature of the business of public bathhouses, businesses have to have the boiler and heater on even if they receive only one guest, so fixed expenses are very high.

For those who haven't given up, the hardships are evident on a daily basis. A bathhouse in Songpa District, southern Seoul, was nearly empty, only smelling of tobacco, on Wednesday.

“Even if the weather is cold we don’t have many guests anymore,” said the owner of the business, a man surnamed Park in his 60s, who has run the bathhouse for nearly 30 years.

“Sales that used to be 13 million won per month shrank to 8 million won immediately after the spread of Covid-19,” said Park. “It is very difficult to recover from such a decrease. I don’t know how long I will be able to keep my business open because public utility rates are skyrocketing.”

The government has already announced a massive public utility rate hike next year, citing the inevitable increases due to the global energy supply shortage caused by the Ukraine-Russia war and the rising prices of various raw and subsidiary materials.

Jeong of the Korea Bath Industry Association said that worries among bathhouse owners are heightened because of the announcement related to more utility rate hikes.

"We wish that the government could decrease utility bills for small and medium-sized businesses that are suffering from the Covid-19 pandemic," said Jeong.

BY KIM KI-HWAN, LIM JEONG-WON [lim.jeongwon@joongang.co.kr]