Korean Hotel Market Hits Record Boom Due to Hallyu and More
Luxury Hotels Are Scarce...Global Brands Draw Attention
Thanks to the spread of Hallyu, including K-pop, dramas, and food, the number of foreign tourists has increased, drawing the attention of global hotel chains to the Korean market.
The domestic hotel market has recently shown rapid growth. Although new hotel establishments significantly declined due to China's THAAD retaliation and the COVID-19 pandemic, the market gradually recovered as the pandemic ended and tourism increased under the influence of Hallyu.
According to global market research firm Statista, Korea's hotel industry revenue plummeted to 4.45 trillion KRW in 2020 during the COVID-19 pandemic. However, it has increased annually since then, reaching 8.79 trillion KRW in 2022, recovering to pre-pandemic levels. Last year, revenue surpassed 10 trillion KRW, reaching 10.21 trillion KRW, and it is expected to exceed 12 trillion KRW by 2025.
Domestic leader Lotte Hotel posted record-breaking results last year with sales of 1.2917 trillion KRW and operating profit of 71.2 billion KRW. Notably, operating profit surged 296% compared to the previous year. Shinsegae’s Chosun Hotel also doubled its operating profit to 40.3 billion KRW last year from 22.2 billion KRW the year before. Samsung affiliate Shilla Hotel recorded its highest-ever sales of 634.7 billion KRW.
However, despite the increase in tourists, hotel supply remains insufficient, especially in the luxury hotel segment. Only two hotels in Seoul?the Four Seasons Hotel and Shilla Hotel?were selected as 5-star hotels by the Forbes Travel Guide this year. This is far below major global cities such as Macau (22), London (20), Paris (12), and Tokyo (9).
In response, global hotel chains are fiercely competing to capture the undersupplied Korean hotel market. While Korean hotel companies previously requested to use overseas brands, now global hotel companies are increasingly approaching Korean partners first to introduce their brands.
According to the hotel industry on the 5th, the InterContinental Seoul COEX in Samseong-dong, Seoul, will be rebranded as The Westin, Marriott’s premium brand. Marriott generally operates only one hotel per city, but considering Seoul’s hotel market, it has decided to operate an additional property.
‘The Parkside Seoul,’ located on the site of the United Nations Command in Itaewon-dong, Seoul, will feature a luxury Rosewood hotel with 250 rooms, with a minimum room rate of over 700,000 KRW per night. Hyatt’s ‘The Unbound Collection by Hyatt’ and Accor’s ‘Maguig Mercure Ambassador Hotel’ will also begin operations this year in Nonhyeon-dong and Magok-dong, Seoul, respectively. Next year, Banyan Tree Haeundae and InterContinental Pyeongtaek will also open.
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