(Source: www.forbes.com)

In designating South Korea’s longest national holiday in decades, President Moon Jae-in had a motive other than providing respite to his over-worked citizenry. The lengthy break was meant to thrill Koreans into domestic travel, boosting the waning local economy.

Instead, the wealthy and middle class took their stuffed suitcases and wallets to destinations like Japan, Thailand, China, the U.S. and Europe; the ones who couldn’t afford to leave the country may have also been unable to drop coin on domestic trips. The money that policymakers hoped would be spent on Korean hotels, restaurants, malls leisure activities, theme parks and the like instead were directed to other countries. Now, analysts believe that domestic spending will sink lower yet, thanks to folks overspending on vacation.

What is Chuseok, and why was it so long this year?

Koreans can usually just expect three days off in the beginning of October for Chuseok, a holiday often compared to the West’s Thanksgiving. Koreans typically travel to their ancestral home, bow to family graves, and help prepare a feast for their family to enjoy. Along with Seollal, or Korean New Year, it’s the most important holiday in Korean culture. A few days later is Hangeul Day, a day off to celebrate the creation of the Korean alphabet.

This year, the stars aligned — or rather, the calendar. Chuseok’s timing is determined by the lunar calendar, taking place from Oct. 3 to 5 this year. That’s Tuesday to Thursday, so the government deemed the Monday and Friday of that week off as well. Hangeul Day was then on the following Monday, creating a ten-day behemoth of a holiday.

The move is in line with Moon’s pledge to introduce work-life balance to Korea, where 12-hour workdays can be the norm and few use all of their paid vacation. South Korea has the second-highest annual working hours in the OECD — clocking in 252 more hours than Americans and 322 hours more than the Japanese, according to 2016 OECD data.

But the new administration had another reason for the long respite: energizing the sluggish domestic economy. Part of Moon’s plan to help his country’s economy is to increase household income, which will lead to more consumption, then higher production and employment.

A boost in spending — but not in Korea

Experts doubted that the holiday would invigorate Korea’s domestic economy. They were right.

More than two million Koreans flew from the country’s biggest airport during the holiday. But rather than enjoying a staycation, Koreans took the rare long holiday to enjoy international travel. That’s unfortunate for Moon’s economic revitalization plans.

Koreans are becoming more wanderlustful than ever. Tour groups have reported record bookings this year. Koreans spend around 3.9 to 4.7% of their income on overseas travel, The Korea Times reported on Oct. 9. In Q2 of this year, more than six million Koreans traveled abroad, dropping $685 per person. Around 60,000 travelers dropped $5,000 during that period, reported The Chosun-Ilbo on Sept. 9.

This is all in contrast to shrinking domestic spending. Indeed, domestic consumption have budged around one percentage point this year, but Bank of Korea statistics reveal that Koreans spent $4.18 billion abroad in the last quarter. It’s a 20.6% boost from the same period last year.

Adding insult to injury

To further drive down what should have been gleeful spending during Chuseok, Chinese tourists barely did not visit Korea during their Golden Week holiday break, which happened to coincide with Chuseok this year. Chinese visitors have nearly halved this year since Beijing banned tour groups to Korea in March, a result of the states’ diplomatic skirmish over the installation of THAAD.

Lotte Duty Free, a major contender in Korea, the world’s largest duty-free market, said its Golden Week sales were 15% lower than the previous year. Small businesses around Seoul and Jeju, two top destinations for Chinese tour groups, have suffered or closed as a result of fewer tourists.

Work hard, travel hard

For that reason, Lee Geun-tae, an economist at LG Economic Research Institute, suggested in an interview with The Korea Times that the government should improve domestic leisure and culture industries. That could ensure Koreans stay at home for their vacation time.

Another idea is to simply increase the amount of vacations that employees can take, or remove the stigma here that’s associated with vacation days. That way, Koreans can spend newfound long weekends in their own country, and travel abroad when the breaks are longer.

Folks here associate their homeland with endless work and crushing commutes — it’s no shock they’re jumping on a plane the first chance they get.

Moon’s attempt to introduce a work-life balance here is admirable, but will likely take decades to achieve. Indeed, he managed to score a week-long vacation in July, but he spent his time on the phone with President Donald Trump and Prime Minister Shinzo Abe. If the vacation messiah can’t even take a day off, how can he expect others to?

More Info: www.forbes.com

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