Seoul to have more high-end hotels amid rise in foreign travelers

[Graphics by Song Ji-yoon and Chang Iou-chung]

Seoul is seeing a surge in hotel developments amid the recovery of foreign tourists and increased domestic demand after the Covid-19 pandemic.

According to industry sources on Sunday, Paradise Group will begin the construction of a high-end hotel with 200 rooms in Jangchung-dong, central Seoul, in November.

The hotel, spanning five underground floors and 18 above-ground floors, is expected to exceed a five-star rating, targeting VIP foreign clientele with an average nightly rate exceeding 1 million won ($722). Completion is slated for 2028.

In Yongsan District, plans are being sought for a global luxury hotel brand, Rosewood, as part of The Parkside Seoul complex project being pursued at the site of the former United Nations Command.

The hotel, which will have 250 rooms with a minimum nightly rate of 700,000 won, is expected to open by 2027.

Aman Group‘s Janu is also expected to break ground this year in the northern Seoul Station area with a similar opening schedule.

Major hotels in southern Seoul are also undergoing renovations, with The Unbound Collection by Hyatt set to open in the second half of this year, transforming the former Imperial Palace Hotel into a luxury boutique under the Hyatt brand.

Furthermore, the InterContinental Seoul COEX will undergo renovations, reopening as a Westin hotel as early as September next year.

The latest hotel development in Seoul is predominantly focused on four- and five-star luxury accommodations, a stark contrast to a decade ago when budget hotels surged in areas like Myeongdong, central Seoul.

This shift is partly due to the diversification of the nationalities of foreign tourists.

According to the Korea Culture and Tourism Institute, Chinese tourists accounted for 47 percent (8.07 million) of the 17.24 million foreign tourists in 2016.

However, following the controversy over the deployment of the U.S. THAAD missile in 2017, the proportion of Chinese tourists dropped to 30 percent. It dropped to about 10 percent during the Covid-19 pandemic, but has been on the rise since August last year, when the Chinese government resumed group tours to Korea.

[Photo by Yonhap]

As of April this year, 1.22 million (24 percent) of the 5.07 million foreign tourists were Chinese, half the proportion in 2016.

Tourists visiting Korea come from various regions. From January to April, 1.02 million tourists came from Japan, 410,000 from Taiwan, 220,000 from Vietnam, 200,000 from Hong Kong, 190,000 from the U.S. and 170,000 from Singapore.

“Recent tourists from the U.S., Japan, Hong Kong and Southeast Asia generally prefer luxury hotels,” said an industry insider.

Another factor driving the increase is the domestic trend of staycations, which gained popularity during the pandemic, especially among the young people.

Luxury hotels with facilities such as swimming pools and fitness centers are catering to this trend.

In particular, the young people’s preference for small luxury experiences, such as eating quality food at hotel buffets and indulging in expensive desserts, has contributed to the increased demand for luxury accommodations.