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Korean anti-prostitution law takes toll on service industry: Experts
January 7, 2005
With the country's service industry suffering from a protracted slump, guest
houses, bars, pubs and beauty salons, in particular, are seeing their sales
decline steadily. Some experts maintain this sluggishness derives from the
recently enacted special law on prostitution, which took effect in September,
as well as the general economic recession.
According to a report on service industry trends released by the National
Statistics Office (NSO) Thursday, the output for the service industry fell by
1.6 percent on-year as of last November, marking the fifth consecutive month of
decline. This is the longest run of negative growth since the statistics office
began crunching numbers in this area in 1999.
Businesses that are sensitive to economic conditions and were affected by the
special law on prostitution took heavy hits.
The hotel industry saw demand fall by 9.8 percent in November compared to the
same period the year before. In August it only dipped by 1.5 percent on-month,
but after the enforcement of the special law it plunged by 9.1 percent in
September and 10.2 percent in October.
Sales from drinks and food at bars and pubs dropped by 3 percent in November
after experiencing a 6-percent drop in October. These businesses saw their
sales volume rise from June to September, then plummet for two consecutive
months after the prostitution law was implemented.
Other service sub-industries such as beauty salons, public saunas, laundry
stores and wedding halls posted an 8.1 percent decline in demand as well.
An official at a credit card company said that workers at entertainment
establishments have been reducing their credit card spending, which has taken
its toll on beauty salons because those people make up a bulk of their
customers.
Retail production decreased by 3.3 percent in November on-year, after falling
for 22 consecutive months, while wholesalers only witnessed a 0.2-percent drop
in sales, marking four straight months of decline.
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