The supply of accommodations is growing slowly compared to demand, with the number of rooms increasing by an annual average of 8.9 percent, whereas the demand was increasing by a rate of 11 percent each year. (image: KobizMedia/ Korea Bizwire)
SEOUL, Oct. 25 (Korea Bizwire) – Recent study data from the Ministry of Culture, Sports and Tourism has revealed that Seoul lacks mid-priced accommodations while the city has an excess supply of high-priced and budget hotels.
The study focused on lodging installations in Seoul, divided into four price categories: high-priced (over 200,000 won, $175.80), mid-to-high priced (100,000 to 200,000 won), mid-to-low priced (60,000 to 100,000 won), and low-priced (less than 60,000 won).
The ministry’s study found that high-priced and low-priced lodgings had a daily excess of 3,017 and 5,714 rooms, respectively, while medium-priced establishments were short of 4,142 (mid-to-high) and 5,262 (mid-to-low) rooms.
The total daily demand for high-end hotel rooms was 9,939, and for budget accommodations, 15,341, whereas the numbers were 16,280 (mid-to-high) and 16,287 (mid-to-low) for mid-priced hotels.
The supply of accommodations is growing slowly compared to demand, with the number of rooms increasing by an annual average of 8.9 percent, whereas the demand was increasing by a rate of 11 percent each year.
Given current trends, the ministry predicted that Seoul would experience a significant shortage of accommodations, particularly in the medium-priced category, in the coming years. The government is expecting the annual number of foreign tourists to exceed 23.2 million by the year 2020.
The ministry also noted that a lack of mid-priced hotels can drive tourists to budget lodgings, ultimately lowering satisfaction levels for local accommodations, and this phenomenon is already prompting tourists to seek hotels on the outskirts of Seoul, resulting in an average two to three hour roundtrip to central Seoul.
“The supply of accommodations has centered on high-end hotels for quite some time,” said a ministry official. “Although there have been recurrent requests to establish medium-priced accommodations, the problem seems to persist. We need to expand the number of quality mid-priced hotels and guesthouses.”
By Kevin Lee (kevinlee@koreabizwire.com)
