The Korea Herald

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Firms’ spending at room salons tops W900b

By Kim Yon-se

Published : April 28, 2013 - 20:47

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Korean firms’ annual usage of company credit cards at entertainment establishments including room salons totaled at least 1.4 trillion won ($1.25 billion) on average, the Korea Institute of Public Finance said Sunday.

According to the institute’s research report, the nation’s corporate sector paid 1.41 trillion won with their company cards at entertainment spots in 2011.

Room salons (or hostess bars) topped the list in company card settlement records of 923.7 billion won, followed by karaoke rooms with 233.1 billion won and nightclubs with 50.7 billion won, according to the report.

Irrespective of macroeconomic conditions, the entertainment expenses have remained at a relatively steady level over the past few years ― 1.53 trillion won in 2010, 1.40 trillion won in 2009, 1.52 trillion won in 2008 and 1.59 trillion won in 2007.

Pharmaceutical companies and soju makers were the two main industries that surpassed their internal ceiling of entertainment spending.

Six out of the top 10 companies exceeding the upper ceiling belonged to the pharmaceutical sector, while two of the 10 were soju producers.

According to a report from the National Assembly and the National Police Agency, the number of hostess bars, karaoke rooms and clubs has increased during the past few years despite lackluster private consumption.

The report suggests that the so-called sin industry has flourished even while consumers have tightened their belts since the 2008 global financial crisis.

The number of venues registered as an “amusement and entertainment business,” including room salons, cabarets, karaoke rooms, pubs and Internet cafes, totaled 192,108 as of September 2012, up 6.3 percent from 187,751 two years earlier.

The number of room salons hit an all-time high of 32,790, up 4.8 percent from 2010, while karaoke rooms that are permitted to sell alcoholic beverages increased by 4.3 percent to 18,789 during the same period.

By Kim Yon-se (kys@heraldcorp.com)