Hotel investors show increasing interest to be present in Seoul as demand for hotel rooms surpass supply. The Korean capital has an estimated deficit of over 11,000 rooms to fill up demand.
SEOUL- Seoul is trendy, Seoul is fashionable, Seoul is booming. Hordes of tourists rush those days to the Korean capital. Business travellers come for business due to the uninterrupted growth of the Korean economy and its perfect location, half way between China PRC and Japan. Young travellers from the rest of Asia just fly to Seoul dreaming of seeing live Korean pop culture. “The hosting of the G20 Summit in 2010 and our nomination as a World Design Capital that same year by the UNESCO put us in a new light,” assures Maureen O’Crowley, Vice President of the Seoul Convention Bureau.
Seoul looks to welcome 10.8 million of tourists this year, requesting some 43,000 hotel rooms to accommodate this flow. Unfortunately, only 28,900 rooms are currently available, according to the Seoul Metropolitan Government, forcing Japanese and Chinese travellers to sleep in motels in the city’s outskirt.
Domestic and international investors are then naturally eying the hotel industry with growing interest. Following the demand, high-end hotel chains, business hotels and investors are planning to build or invest in new hotels throughout the metropolitan area. Hotels are garnering interest as they are making high profits. Seoul will be short of hotels until 2014, so active investments are expected until then, said Seong Jun-won, a researcher at Shinhan Investment Corp to the newspaper Korean Herald. “And there is a real lack of hotels in the three to four star segment,” adds O’Crowley.
Many chains plan now to open up properties, sometimes in the most unusual location. This is for example the case for the Shilla Group of hotels. Renowned for its five-star property in the heart of Seoul which epitomizes Korea tradition, Shilla plans now to open several business hotels under the name Shilla Stay, a three- to four-star brand. The first one, with 308 rooms, is due to open in December 2013 in the district of Yeoksam-dong in Southern Seoul. The group has long been planning to also convert its Shilla Duty Free building in Jangchung-dong, central Seoul, into a business hotel. Two other investors will also convert until 2015 former shopping centres into hotels.
About 40 buildings have been newly approved as tourism accommodation facilities, according to the Seoul Metropolitan Government, and 24 of them will go under construction within a year time. When completed, Seoul will be provided with 3,557 more rooms.
Among other investors, Lotte Hotel plans to open three business hotels throughout Seoul until 2015 in the districts of Cheongnyangni, Seocho-dong and Myeong-dong. JW Marriott is due to inaugurate a property before the end of the year next to the future Seoul Dongdaemun Plaza, in the city centre. The hotel will have 16 floors and 170 rooms.
Cheonwon Industrial, owner of Ritz Carlton Seoul, and GS Group, owner of Intercontinental Parnas Seoul, both situated in southern Seoul, are each seeking to build a business hotel and a high-end hotel, respectively, right next to their existing ones. Before the end of the year, Conrad Seoul, run by Hilton Worldwide, will open in Yeouido with 434 rooms, followed by Crown Plaza Hotel. Rumours also circulate about the possible arrival of Mandarin Oriental Hotel and Four Seasons in the Seoul market. Japanese firm Nomurarifa Asset Management recently opened the office building-turned-Ramada Dongdaemun Hotel.
Photo: Maureen O’Crowley, Vice President of the Seoul Convention Bureau
(Source: MCT Information Services)
Luc Citrinot a French national is a freelance journalist and consultant in tourism and air transport with over 20 years experience. Based in Paris and Bangkok, he works for various travel and air transport trade publications in Europe and Asia.
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