Korea's extra holidays fuel travel abroad, not local economy: National Assembly report

Korea Herald

16 hours ago

A recent National Assembly Research Service indicated that temporary public holidays are not boosting domestic spending; instead, they are resulting in increased overseas travel.
Released Thursday, the report examined the impact of this year's extended Seollal New Year holiday in January, when the government added a temporary holiday on the 27th. That move created a six-day break, intended to encourage local consumption.
Instead of spending more at home, nearly 3 million South Koreans went abroad, marking the highest monthly figure for outbound travel on record.
According to NARS, the number of Korean overseas tourists in January rose 9.5 percent from December and 7.3 percent year-on-year.
Credit card data showed a brief bump in domestic tourism-related spending on Jan. 27, with major issuers BC Card and Shinhan Card reporting a 60 percent jump in spending compared to the previous Monday. But overall domestic tourism spending in January fell by 7.4 percent from December and 1.8 percent year-on-year, according to the report.
Export and production indicators also declined. Exports in January dropped 10.2 percent from the same month in 2024, while industrial output fell 1.6 percent month-on-month and 3.8 percent from the year before.
Although these results stem from multiple economic factors, NARS noted that the reduced number of working days during the extended holiday likely contributed to the slowdown.
These concerns are resurfacing now as public attention turns to the upcoming October holiday stretch.
With national holidays already scheduled from Oct. 3-9, many are speculating whether the government will declare Friday, Oct. 10 a temporary public holiday, effectively creating a 10-day break. The Lee Jae-myung administration has not expressed any official position.
The NARS report cast doubts on extended holidays leading to an increase in domestic spending, particularly as international travel becomes more accessible.
Beyond the economic issue, the report raised the issue of the public not benefiting equally from temporary holidays. Providing sufficient rest periods for the public is another key reason for temporary holidays, as Korean workers logged 1,872 hours on average, which is about 130 hours more than the OECD average.
But businesses with fewer than five workers are not subject to the legal clause that provides the basis for the temporary holidays, specifically Article 55 of the Labor Standards Act. This means an estimated 10 million workers nationwide employed at such businesses could be excluded from the benefits.
The same clause mandates a substitute off-day for holidays that overlap with weekends or other public holidays, which is also not applied to the aforementioned smaller businesses.
The NARS report recommended moving away from one-off holidays and toward broader reforms.
Expanding substitute holiday coverage and shifting fixed-date holidays to weekday observance, as seen in countries like the US, could ensure more predictable and equitable rest for all workers. 'Rest should be a universal right,' the report said, 'not a privilege granted occasionally or unequally.'