Restaurants, cafes and clubs in Seoul's popular nightlife district of Itaewon seemed to be on a smooth road to recovery at last after years of pandemic disruptions -- before Saturday. But now its hopes of revival have been set back again following a disastrous overnight crowd surge.

The neighborhood -- once mainly the realm of expats and American soldiers -- has transformed into a culturally diverse and trendy area beloved by locals and visitors alike in recent years. Its “Brooklyn-type” gentrification has brought in global brands, including Gucci and Lululemon, which opened flagship stores there.

Adding to the unique charm of the area were 2020's hit TV series “Itaewon Class,” which was set in the neighborhood, and the relocation of the president's office nearby in May this year.

But the country's strict social distancing rules due to COVID-19 had led to a mass shuttering of businesses in the area from 2020 to end-2021.

Expectations were running high for the first “maskless” Halloween party in three years, as many business owners thought the immensely popular festive event would get them out of the woods.

However, business sentiment in the area plummeted immediately after Saturday’s deadly crowd surge. At least 153 people died and 103 were injured in the tragic incident that occurred in narrow and hilly alleyways around the area’s landmark Hamilton Hotel.

Either to pay respect to the dead or spooked by the latest incident, the usually bustling streets of Itaewon are likely to remain empty for some time.

Businesses in the Itaewon area will close for a two-day mourning period for the victims, a police officer and an association of small business owners said.

“Some stores have already stopped operations. Whether the temporary closure will extend depends on how the situation unfolds,” said the police officer, who wished to remain anonymous.

The Itaewon Special Tourism Zone Association, an organization of business owners in the area, had reportedly sent out emergency messages asking its members to temporarily halt their businesses to pay respect for the victims.

As of Sunday morning, several restaurants, cafes and clothing stores were shuttered with signs reading “may they rest in peace” on their windows.

The closures were voluntary and some businesses were opened as usual, but onlookers worried that the latest fiasco may lead to another prolonged downturn for an area that has already felt the pinch from pandemic disruptions and inflation fears.

Park, 41, who runs a franchise coffee shop across from the stampede site, said “there has been no disaster like this in the neighborhood over the past few years. My store is closed today."

Itaewon businesses have been slowly reopening after many were out of business for more than two years due to governmental social distancing rules first adopted in early 2020.

The rules, which limited the number of people in private gatherings and put a ban on dining in restaurants after 9 p.m. for a period of time, had taken a toll especially on Itaewon’s nightlife-focused small businesses.

According to state-run real estate data provider Korea Real Estate Board, the vacancy rate at commercial properties in Itaewon surged to an average of 30 percent at the pandemic peak of end-2020. But the figure showed signs of recovery, dropping to some 7 percent last year, when social distancing rules were being pulled back.

Korea has designated a week of national mourning starting Sunday to extend through Saturday, asking local businesses and authorities to cancel Halloween festivals, events and parades.

“I don’t think I’ll be able to dine or meet with friends in Itaewon for some time,” Lee Ji-soo, a 32-year old said.

“It will remind me too much of the accident.”

By Jung Min-kyung
By Choi Jae-hee