Parnas Hotel's Comeback Imminent... Will It Become a Sales Driver for GS Retail?

Renovation Completed, Opening in December
Exterior and Interior Rooms Dressed in 'Modernity'
"We Will Show a Completely Changed Appearance"
GS Retail Faces Hotel Sector Slump in First Half
Expecting Rebound in Q4

[Asia Economy Reporter Cha Min-young] The 'Grand InterContinental Seoul Parnas,' owned by GS Retail, has completed its renovation and confirmed its reopening date. Attention is focused on whether it can become a key driver to boost the hotel division's revenue, which was halved due to the COVID-19 pandemic.

According to the hotel industry on the 12th, Grand InterContinental Seoul Parnas, operated by Parnas Hotel, a subsidiary of GS Retail, has completed a large-scale guest room renovation that began in January and lasted 11 months, and plans to reopen on December 1. The newly reopened Grand InterContinental Seoul Parnas underwent renewal work focusing on 'modernity' from the exterior to the interior rooms. The biggest change is the application of floor-to-ceiling windows on the exterior walls, securing a wide view for each room. The glass-type building exterior color was also changed to a golden hue to add a sense of luxury. The number of rooms increased from 519 to 550, adding 31 rooms, and the club lounge will be relocated from the 26th floor to the 34th floor. A Parnas Hotel official stated, "We are not accepting official reservations through external sites such as online travel agencies (OTA), but partial reservations are being accepted through internal sites like IHG membership," adding, "We are preparing to present a completely transformed hotel."

Not only the exterior but also the hotel operation strategy is expected to change to suit the post-COVID era. Previously, thanks to its proximity to the COEX Convention Center and other locational advantages, the hotel had a high proportion of business customers and foreign tourists, but with reduced cross-border travel, a change in target customers is being considered. Parnas is contemplating new services and facilities tailored to hotel demand for tourism, leisure, and relaxation. Selecting the hotel amenity (convenience items) brand alone took several months.

GS Retail's hotel division, which had poor sales, is also expected to recover to some extent. The occupancy rate of hotel rooms in Seoul once deteriorated to as low as 20-30%, affecting the InterContinental Seoul COEX as well. Collaborating with its affiliate home shopping company GS Shop, they devised a strategy to sell a 5-star hotel domestically for the first time, but there were limitations. The business hotel 'Nine Tree Myeongdong,' located in the Myeongdong tourist district, also faced management difficulties as the number of Youke (Chinese tourists) decreased. According to the company and the securities industry, GS Retail's cumulative hotel division sales for the first and second quarters this year were 81.3 billion KRW, a 43.5% decrease compared to the same period last year (144 billion KRW). This is lower than other business divisions such as convenience stores (1.5%), supermarkets (-13.3%), and others (43.9%), including the overall company sales growth rate (-0.9%). However, the hotel division's quarterly sales are estimated to increase to about 65 billion KRW in the fourth quarter.

Meanwhile, Parnas Hotel considered changing the brand of InterContinental Seoul COEX from the existing IHG Group to another global chain brand but ultimately decided to maintain it as is.