Five-Star Hotels Closing Doors... Fitness Centers Also Cease Operations

Increase in Complete Hotel Closures

Industry Insider: "Concerns Over Business Hotel Closures if COVID-19 Prolongs"

[Asia Economy Reporter Lim Hye-seon] Domestic 5-star hotels will temporarily suspend the operation of fitness facilities until the 5th of next month. This measure follows the government's recommendation, conveyed through the Prime Minister's statement, to halt indoor sports facility operations to prevent the spread of the novel coronavirus infection (COVID-19).

According to the hotel industry on the 25th, domestic 5-star hotels operated by Hotel Shilla, Hotel Lotte, Shinsegae Chosun Hotel, and others will temporarily close all indoor facilities within their fitness clubs. The temporarily closed facilities include gyms, indoor swimming pools, and saunas. Hotels plan to offer membership period extensions and other compensations to customers affected by the 10-day suspension of operations.

As the COVID-19 crisis prolongs, hotel operations have come to a standstill. With tourist visits sharply declining and domestic leisure sentiment worsening, vacancy rates have soared. Until January, the average room occupancy rate of 5-star hotels in Seoul was between 60-70%, but this month it has dropped to only 10%. As a desperate measure, more hotels are temporarily closing. The Grand Walkerhill Hotel is suspending room operations until the 22nd of next month and implementing a two-shift work system for staff. Earlier this month, the Hilton Hotel Gyeongju in Gyeongbuk also entered temporary closure. Hotels rated 4 stars and below are also increasingly suspending operations. Business hotels that primarily served Chinese tourists have been particularly hard hit. Crown Park Hotel Seoul in Euljiro and Benikea Premier Hotel Dongdaemun have stopped operations. The Plaza will suspend weekday buffet restaurant operations from the 26th until the 30th of next month.

An industry insider said, "Even the operation of fitness facilities, a major hotel amenity, has been halted, leading to cancellations of the few remaining reservations. While luxury hotels are barely holding on, if the COVID-19 situation prolongs, some business hotels are expected to close down."

Meanwhile, hotel fitness clubs operate on a membership basis. Each hotel typically has 400 to 600 members. Recently, hotels have lowered the entry barriers to attract younger members. Previously, members paid an initiation fee ranging from 60 million to 130 million KRW, plus several million KRW annually. This was why mostly affluent middle-aged and older adults used hotel fitness clubs. Now, more hotels offer fitness club access for only an annual fee of about 3 million to 9 million KRW.