"52% of Rest Stops Opened in Seoul Over 10 Years Closed Within 3 Years"

[Asia Economy Reporter Yuri Kim] It has been revealed that half of the rest stops (mainly establishments that prepare and sell tea, ice cream, etc., where drinking alcohol is not permitted) that received permits and started operations in Seoul over the past 10 years have closed within 3 years.

On the 29th, Real Estate 114 analyzed local administrative permit data from the Ministry of the Interior and Safety and found that among the total 56,184 rest stops permitted in Seoul from 2010 to the end of March 2020, 29,348 stores (52.2%) closed within less than 3 years from the permit date. The number of stores closing within one year reached 7,269. Real Estate 114 stated, "This indicates that the economic activity conditions for self-employed individuals are deteriorating."

The closure rate of rest stops in Seoul (the proportion of closures compared to permits within one year) is also on the rise. The closure rate, which had remained in the 50% range until 2017, exceeded 60% in 2018, slightly decreased in 2019, and rose again to 66.8% in the first quarter of 2020.

Real Estate 114 pointed out, "This year, due to the economic recession and consumption contraction caused by the novel coronavirus infection (COVID-19), self-employed individuals are taking a direct hit, so the closure rate is expected to approach 70%. If more self-employed people close their businesses without recovering the initial investment costs, issues such as increased household debt and bankruptcies may emerge as social problems."

Although it is difficult to survive beyond 3 years after starting a business, the number of permits for rest stops does not seem to be significantly decreasing. Rest stops are considered a top choice for self-employed individuals because starting one is relatively easy if capital is available. However, rest stops face fierce competition within the same industry and have the disadvantage of a short survival period due to sensitivity to economic conditions and trends. Therefore, experts advise that those considering starting a rest stop should receive prior business training and thoroughly evaluate opportunity costs. They also unanimously agree that starting a business targeting only specific demands or in areas with poor accessibility should be approached with caution.

Meanwhile, Real Estate 114’s startup support service provides free commercial district analysis reports for prospective entrepreneurs. Through these reports, prospective entrepreneurs can understand the commercial district status, including floating population and sales information by industry in their desired startup area.

This content was produced with the assistance of AI translation services.