Lockdown Devastates Hospitality Industry
06 March, 2021
The devastating impact of lockdown on the hospitality industry has been thrown into sharp relief by the most recent credit-card spending data.
Card spending on restaurants and lodging on January totaled W6.97 trillion, and 95 percent was in eateries, mostly takeaways and delivery (US$1=W1,125). The last period spending fell below W7 trillion was in February 2016.
Even in the early stages of the coronavirus epidemic, card shelling out for restaurants and lodging hovered by around W10 trillion. In 2019, it averaged W10.8 trillion a month.
The sharp decline didn't come until late 2020, when the government banned gatherings of five or even more persons and restaurants had to shut at 9 p.m. The impact was especially devastating because December is generally the peak season. Instead, card spending plummeted 23.7 percent on-month in December and 39.8 percent on-year to W7.3 trillion.
Spending is estimated to possess fallen even further found in February amid the low-key Lunar New Year holiday.
Stores near Ewha Womans University found in Seoul are closed or perhaps moving away from business on Tuesday. /Newsis
Various owners of hospitality businesses are surviving on loans or have abandoned. Based on the Bank of Korea, the fantastic loan balance of hospitality businesses reached W72.6 trillion in the 3rd quarter of this past year, up W12.5 trillion on-year.
Card spending in some additional sectors also declined sharply, though total it remained on the W70 trillion range. It totaled W72.7 trillion in January, largely unchanged compared to W74.1 trillion this past year as wholesale and retail purchases increased 16.2 percent to W39.5 trillion.
A good staffer at the Credit rating Finance Association said, "Credit rating card utilization used to focus on restaurants but shifted to supermarkets and online looking. But normally credit rating card spending increases five percent annually taking into consideration inflation, so the decline displays how weak personal consumption is becoming."
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