Signiel Seoul 46%↑... Weekend Rate 968,000 KRW
Limited Rooms and Privacy Attract Domestic 'Hokangs'
Even during the COVID-19 period when the 'crisis theory of the lodging industry' emerged, the average room rates of major 5-star hotels were confirmed to have steadily increased. Hotel room rates are generally determined by the principles of supply and demand, and unlike 4-star hotels that suffered a 'fatal blow' to occupancy rates due to social distancing measures, luxury hotels were relatively able to offer private stays, making them a preferred choice for domestic 'hokangseu' (hotel vacation) customers.
According to the industry on the 3rd, the average room rate of Signiel Seoul, Lotte Hotel's top-tier brand, in the first half of this year steadily increased from before COVID-19 in 2019, showing a 46% increase compared to the same period. It also rose 3% compared to last year. As of this date, the rate for the 'Grand Deluxe Double' room at Signiel Seoul (including tax and service charge) is 726,000 KRW on weekdays and 968,000 KRW on weekends.
The average room rate at Banyan Tree Club & Spa Seoul, a Hyundai Group affiliate, increased by 14% compared to 2019 and rose 5.5% compared to last year. Novotel Suites Ambassador Seoul also increased by 23% compared to 2019 and 11% compared to last year. Although the rate increase was relatively lower compared to hotels in the Seoul area, Jeju WE Hotel also saw a 6% increase compared to 2019.
The reason major 5-star hotels were able to continue 'high price hikes' despite COVID-19 is analyzed to be because domestic hokangseu customers quickly filled the gap left by the absence of foreign tourists, leading to increased demand. Hotel room rates fluctuate according to supply and demand principles, and unlike business hotels that suffered a fatal blow due to the decrease in domestic and international events and business trips during the COVID period, 5-star luxury hotels were able to absorb a large demand from domestic hokangseu customers by offering relatively private stays. In fact, Signiel Seoul has about 200 rooms, which is about one-fifth the size of Lotte Hotel Seoul (1,015 rooms), another brand of Hotel Lotte. Banyan Tree Club & Spa Seoul has about 50 rooms, operated with 2 to 3 rooms per floor.
The industry expects the trend of increasing hotel room rates to continue for the time being as the peak hotel season begins in earnest. A Lotte Hotel official said, "Except for a brief slowdown in the first half of 2019, Signiel Seoul's performance and number of guests steadily increased even during the COVID period," adding, "Because the number of rooms is small, there is no need to interact with others, and the facilities are top-class, making it an attractive choice for customers who want to enjoy hokangseu during the COVID period."
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