The pandemic has led to a surge in demand for overseas travel, and Koreans have opened their wallets to go abroad. In the first quarter of this year, the travel deficit and the amount of overseas spending by Koreans on credit cards increased significantly. On the other hand스포츠토토, demand for domestic vacations (hotel + vacation), which has become a form of leisure amid the prolonged coronavirus (COVID-19) pandemic, has slowed down.
Travel balance deficit largest in three and a half years…Amount spent on cards overseas ‘wormwood’
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As the number of overseas travelers increases, the size of the travel balance deficit has widened to almost as much as three years ago, before the COVID-19 outbreak.
According to the Bank of Korea on Jan. 31, the travel balance deficit in the first quarter of this year was $3.35 billion, the largest since the third quarter of 2019 ($3.28 billion). Travel receipts in the first quarter were $3.086 billion and travel payments were $6.321 billion. The Q1 travel deficit was the largest in five years on a quarterly basis since Q1 2018 (-$5.14 billion).
The travel deficit was driven by the tourism deficit. The deficit in services for general travelers, which excludes study and training, increased 46.8% to $2.585 billion in Q1 from $1.761 billion in Q4 last year.
Source=Yanoljari Research
This is the result of a surge in overseas travel by Koreans. According to the Korea Culture and Tourism Organization’s Tourism Knowledge Information System, 4.97 million Korean tourists traveled abroad in the first quarter of this year, a 55.2 percent surge from the fourth quarter of last year (3.28 million). Compared to the first quarter of last year (406,000), it was a surge of 1127.5%. In particular, the number of tourists visiting Japan reached 1.67 million (according to the Bank of Korea) in October last year, when the Japanese government allowed visa-free personal travel for foreigners.
It is estimated that spending by Koreans abroad has also increased significantly. In the first quarter, the amount of overseas card spending reached $4.6 billion, which is close to the pre-COVID-19 level. This is the result of increased overseas travel as well as demand for direct overseas purchases through e-commerce (e-commerce).
Source=Bank of Korea
According to the BOK, domestic residents’ overseas spending on cards (credit, debit, and debit) amounted to $4.6 billion in the first quarter, a 50.3 percent surge from the first quarter of last year. It was also up 14.8% from the fourth quarter of last year ($4.01 billion). This is the largest increase since Q1 2020 ($3.598 billion), before the pandemic, and nearly as large as Q4 2019 ($4.883 billion), before the pandemic.
“This was due to an increase in the number of domestic outbound travelers as countries around the world eased COVID-19 quarantine measures, and an increase in overseas job openings due to the depreciation of the won-dollar exchange rate,” Han explained.
While the number of overseas travelers has surged, the recovery in domestic travel by foreigners has been relatively slow, which explains the widening deficit. According to the Korea Tourism Organization, 1.74 million foreigners visited South Korea in the first quarter of this year, up sixfold from the same period a year ago, but still less than half of the 3.84 million in the first quarter of 2019 before the outbreak of COVID-19.
Travelers ‘flying blind’ in search of cheap deals… ‘Caution’ when booking overseas travel
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The problem is that as the demand for overseas travel increases, the number of consumer victims is also increasing. According to the Korea Consumer Affairs Ministry, the number of consumer consultation cases related to some overseas online travel agencies (OTAs) and low-cost carriers (LCCs) surged in the first quarter of this year. These companies have been canceling, delaying, or refusing refunds and exchanges due to their terms and conditions, so consumers should be wary.
For example, in the first quarter of this year, there was a sharp increase in consumer consultations related to overseas OTA Kiwi.com. In the first quarter, 95 cases of damage related to Kiwi.com were reported to the KFTC’s 1372 Consumer Consultation Center, more than 10 times more than in the first quarter of last year (7 cases). It was also up sharply from the fourth quarter of last year (46 cases).
The majority of cases were for “delayed or refused cancellations, refunds, and exchanges” (89 cases – 93.8%). The gist of the complaints is that Kiwi.com refused to issue a refund and only issued a €10 (about $14,000) credit, citing a “no refund in case of voluntary cancellation” condition on the sales page.
According to the terms, the consumer was only entitled to a 10 euro credit, not the full price or the balance after deducting the cancellation fee, which is the amount that can be refunded under individual ticket refund rules. Last year, Consumer Affairs recommended that eight overseas OTAs, including Kiwi.com, improve their terms and conditions, but Kiwi.com failed to do so, the agency said. As consumer complaints grew, four airlines, including American Airlines, banned Kiwi.com from selling their tickets.
Source=Korea Consumer Resources
Among LCCs, the number of consumer counseling cases related to VietJet Air and AirAsia has been increasing rapidly. According to the KCS, 139 and 142 consumer complaints related to VietJet Air and AirAsia were received in the first quarter of this year, up 127.9% and 33.6% from the fourth quarter of last year, respectively.
According to the Korea Consumer Affairs Agency, 139 and 142 consumer complaints related to VietJet Air and AirAsia were received in the first quarter of this year, up 127.9% and 33.6%, respectively, from the fourth quarter of last year. Source=Korea Consumer
The majority (92 – 66.2%) of VietJet’s complaints in the first quarter of this year were related to cancelations, refunds, exchange delays, and refusals. In particular, 55 complaints were about credit payments. Since June 2021, Vietjet has been using a policy that allows for a credit to be issued if a ticket is canceled after purchase. The policy states that the purchase price will be credited for cancellations caused by the airline, including flight cancellations and schedule changes, as well as cancellations caused by the consumer. However, the credit is valid for one to two years and cannot be transferred to another person, so if you do not use Vietjet Air within that period, you will suffer losses. The KFTC issued a correction recommendation for the terms last month, and if VietJet Air does not fulfill the correction within the period, it will issue a correction order.
AirAsia received the majority of complaints related to delayed or denied refunds (75 cases – 52.8%) and breach of contract (63 cases – 44.4%), especially for long delays in refunds. More than half of the refunds were delayed for more than three months (19 cases – 57.6