September 01, 2012 08:19
Spending on leisure and cultural activities has risen considerably, defying the conventional wisdom that people cut down on fun first when the recession bites.
Experts are scratching their heads, with some saying an increasing number of people open their wallet to "heal" their tired souls in gloomy economic times.
According to figures on household spending for the second quarter released by Statistics Korea last week, families spent 8.6 percent more on leisure and cultural activities than a year ago, compared to a 3.6 percent increase in overall household spending for the quarter.
Spending on durable goods for leisure and culture such as game consoles rose a staggering 142.2 percent, the biggest jump since statistics in this area began in 2003. Almost all areas in the leisure and culture category, such as musical instruments, gardening goods, leisure and entertainment activities, and packaged tours, showed a two-digit increase rate.
Spending on telecommunication devices like smartphones also posted the highest hike ever with 145.4 percent. That means many people replaced their mobile gadgets even though no new models came out in the second quarter.
The trend has caused a boom in related business. Hana Tour said 68,700 people booked package tours abroad from July 25 to Aug. 3, up 20 percent from 2010. Summer packages offered by five-star hotels in Seoul sold well, boosting the room occupancy rate from the usual 70-80 percent to 90 percent.
This contrasts starkly with three years ago, when the global financial crisis hit the country. Spending on leisure and cultural activities in the first quarter of 2009 plunged 7.9 percent on-year, much more than the overall decrease of 3.6 percent.
On the other hand, people now spend less on daily necessities. Spending on groceries and transportation in the second quarter went up by just 1-2 percent, but considering inflation it actually decreased 3.7 percent for groceries and 2 percent for transportation.
Kim Jong-dae of the LG Economic Research Institute said, "These days, consumers tend to spend more on things they value." And Lee Jin-sang at the same think tank added, "More and more people seem to find consolation in leisure activities amid the prolonged recession."
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