1. South Korea extends annual Chuseok holiday to boost domestic spending

South Korea extends annual Chuseok holiday to boost domestic spending

Even many South Koreans are looking elsewhere for holiday relaxation at a time when talk of war on the Korean peninsula and China’s boycott has hit inbound tourism.

By: | Published: September 18, 2017 5:00 PM
South Korea, South Korea extends  annual Chuseok holiday, annual Chuseok holiday, Moon Jae-in, boost domestic spending, holiday to boost domestic spending, Chuseok holiday, inbound tourism Even many South Koreans are looking elsewhere for holiday relaxation at a time when talk of war on the Korean peninsula and China’s boycott has hit inbound tourism. (Image: Reuters)

Even many South Koreans are looking elsewhere for holiday relaxation at a time when talk of war on the Korean peninsula and China’s boycott has hit inbound tourism. President Moon Jae-in hoped to boost domestic spending by declaring Oct. 2 a one-time holiday, effectively extending the annual Chuseok holiday to 10 days. Yet South Koreans are booking more flights out of the country than they did last year — and those extra days are likely one reason. Online travel agency Interpark Tour said purchases of airline tickets to overseas destinations have more than doubled compared with the same, shorter holiday in September 2016. “Usually overseas trips are mostly to nearby countries, but this time tickets to the U.S. and Europe have accounted for about 40 percent,” said Frank Lee, a manager at Interpark’s public relations office, who noted that the number of travelers could still rise, given that the holiday was still more than two weeks away.

South Koreans were traveling overseas more even before North Korea raised geopolitical tensions with its recent missile launches and a nuclear test. A record-setting 2.39 million went abroad in July. Demand for overseas trips tends to surge when a nation’s per capita income rises above $20,000, and has risen unusually quickly in South Korea, said Kim Man-jin, the head of Korea Tourism Organization’s international tourism strategy team. “We expect more than 26 million South Koreans to travel abroad this year, which is a large number at more than half of the total population of around 51 million,” Kim said.

The extended Chuseok holiday may have prompted the big jump in overseas travel during this year’s holiday. Because South Korea is rather small, people tend to take shorter trips at home and go abroad for longer ones, Kim said. Meanwhile, inbound tourism slumped 21 percent during the first seven months of the year, partly a result of China’s ban on package tours in retaliation for Seoul deploying the U.S.’s Thaad missile-defense system, and at an estimated loss to South Korea of $3.3 billion in tourist spending. Tourism arrivals fell 41 percent in July alone, as tensions with North Korea heated up. This has swelled South Korea’s trade deficit in services, which in July more than doubled from a year earlier to $3.29 billion.

Extending holidays can also increase domestic retail sales and services output, which is one reason the government does it. When former President Park Geun-hye designated May 6 a one-time holiday in 2016, bridging the Children’s Day holiday and the weekend, department store sales increased 16 percent from the same holiday period a year earlier, according to the finance ministry. Yet the overall positive impact on the economy is offset by declines in companies’ output during the additional days off.

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