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Lunar New Year Overseas Travel Surge: Background and Economic Impact

1. Surge in Overseas Travel Demand

• With the Lunar New Year offering up to a 9-day extended holiday, over 1.34 million people traveled overseas, a 13% increase compared to the previous year.
• Incheon Airport alone saw over 2 million passengers, resulting in extreme congestion.
• Travelers are choosing overseas trips to coincide with the long holiday, enduring long waiting times at Incheon Airport for departure.

2. Comparing Overseas and Domestic Consumption

• Overseas, you can book a 3-bedroom pool villa for around 400,000 KRW, making accommodation relatively cheaper compared to domestic options.
• Domestic "staycations" (5-star hotels) cost over 500,000 KRW per night, with some luxury options exceeding 1 million KRW.
• While airfare has increased, hotel and food expenses are more reasonable overseas, making overseas travel cost-effective for longer vacations.

3. Where Are the Affordable Destinations?

• Japan (Tokyo, Osaka, etc.), Thailand (Bangkok), and Vietnam (Nha Trang, Da Nang) are popular due to their proximity, affordable airfare, and favorable exchange rates.
• Thailand, Vietnam, and Japan have become established as "value-for-money destinations," preferred by families.

4. Impact on Domestic Economy, Regional Economies, and Consumption

• The increase in overseas travel demand during the Lunar New Year holiday is expected to contract domestic consumption.
• Jeju Island saw a 10% decrease in tourists compared to the previous year, highlighting the impact on the domestic economy.
• Some local governments are providing living support funds to residents, but growing complaints are due to disparities in support.

5. Policy Issues and Economic Implications

• Concerns over the negative economic impact of designating temporary holidays for the Lunar New Year holiday outweigh the positive effects:
  • Decreased productivity: the 9-day extended holiday impacts the overall economy, including exports.
  • Policy Overreach: Frequent temporary holidays are expected to increase the burden on businesses.
  • Increased Consumption Polarization: Concerns over domestic recession and increased overseas consumption are accelerating regional economic imbalance.

6. Increase in Overseas Travel and Investment Perspective

• Overseas travel demand is steadily increasing despite high inflation and exchange rates.
• Airlines and low-cost carriers stocks appear to be attractive long-term investment options (analyzed through low PER, etc.).

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Summary

• A surge in overseas travel during the extended Lunar New Year holiday, with 1.34 million departures.
• The preference for overseas travel continues to grow due to cheaper accommodation and dining expenses compared to domestic options.
• Negative economic impacts from the long holiday are concerning, including reduced regional and domestic consumption, and decreased exports.
• Airline industry stocks are gaining attention as long-term investment prospects.

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• Crafted by Billy Yang
• [More…]
  1. Korea Lunar New Year Overseas Travel Trends
  2. Cost-effective Travel Destinations from Korea

*YouTube Source: [Jun’s economy lab]

– Why the number of overseas travelers who do not know their country has increased