"Surprised While Searching 'This Is the Place for Travel'... Vanishing Motel Signs, What Happened?"

Over 3,300 Inns and Motels Closed in Five Years
Decline in Motels, Rise in Shared and Residential-Style Lodging

The motel industry, which once formed a significant part of urban accommodation, is showing a clear decline due to decreased demand and reduced profitability.

According to the National Tax Statistics Portal on February 2, the number of inn and motel business operators in Korea has sharply decreased in recent years. In December 2019, before the COVID-19 pandemic, there were 20,939 inn and motel business operators nationwide, but by November 2025, this number had fallen to 17,621, a decrease of 3,318 (15.8%). In Seoul, the number of inn and motel operators dropped from 1,964 to 1,390 during the same period, a decrease of 574 (29.2%), which is significantly higher than the national average.

The motel industry, which once formed a significant part of urban accommodation, is showing a clear decline due to decreased demand and reduced profitability. Getty Images

A similar trend is observed in the nationwide business survey by the National Data Agency. The number of inn businesses declined from about 29,000 in 2004 to about 25,000 in 2010, about 23,000 in 2019, and then to 20,641 in 2024. In this survey, "inn business" refers to accommodation facilities with more limited services than hotels and includes inns, motels, and guesthouses.

Motels are accommodation facilities without a separate legal definition. The term "motel" is not specified in relevant laws, so local governments classify businesses based on their operating characteristics as inns, general hotels, or other accommodation businesses. As a result, there are no statistics that separately count only motels, but the data including inns and motels can be used to estimate the decline.

The structure of the accommodation industry is also undergoing significant changes. Recently, the accommodation market has been reorganized around new types of facilities, such as residential accommodation businesses, rather than traditional motels, inns, or guesthouses. According to the Ministry of the Interior and Safety’s local administration licensing data, of the 5,229 accommodation facilities that opened between 2020 and 2025, residential accommodation businesses accounted for 3,381 (64.7%), the largest share, while inn businesses accounted for only 406 (7.8%). During the same period, 5,092 accommodation businesses closed, with inn businesses accounting for 3,024 (59.4%) and guesthouses for 740 (14.5%), together making up about 74% of all closures.

Motel. Pixabay

Changes in usage patterns are also evident in the data. According to the National Travel Survey Report by the Korea Culture and Tourism Institute, the share of people using motels and inns dropped from 6.2% in 2020 to 4.2% in 2024.

The accommodation industry cites the overall decline in demand and worsening profitability as the primary reasons for the downturn of the motel industry. As domestic travel becomes more upscale and the criteria for choosing accommodation diversify, it has become difficult to maintain competitiveness with only basic lodging functions as in the past. The spread of shared accommodations such as Airbnb and residential accommodation facilities is also cited as a factor eroding the demand for traditional motels.

Additionally, the decline in business travel demand due to the normalization of video conferencing after COVID-19 is considered another contributing factor. The industry also points out a combination of social and economic factors, including the enforcement of the Special Act on the Prevention of Prostitution, economic slowdown, an increase in illegal accommodation facilities in urban areas, and the conversion of aging motels into small residential facilities such as officetels and commercial buildings.