Despite political unrest, international visitation nears 2019 record

• Despite the political turmoil in Korea, international arrivals remained robust and approached the YTD 2019 record of 2.3 million arrivals, with 18% y-o-y growth compared to 2023, demonstrating the country’s strong international appeal.
• YTD Feb 2024 top markets are China (31.3%), Japan (17.7%), Taiwan (11.3%), US (6.4%) and Vietnam (3.4%). Although China still hasn’t fully recovered to pre-COVID levels, countries such as Taiwan, US, Singapore and Australia are showing significant growth compared to 2019 levels.

Limited new supply in 2025 and some conversions

• No new hotel openings in Q1 2025. InterContinental Coex (656 rooms) in Samseong-dong, closed since last June, is under renovation and set to reopen as Westin Seoul Parnas in Q4 2025.
• Pullman Ambassador Gwangjin (182 rooms) and Hyatt Place Pangyo (204 rooms) to open in 2025, showing limited new supply pipeline and increase in premium accommodation options.

RevPAR continues to show growth at a moderate pace

• Seoul’s Midscale & Economy hotels, amid political uncertainty, showed a slight decrease in occupancy compared to 2023. Nonetheless, RevPAR remained at the 2023 level, with a 10% y-o-y increase in ADR, surpassing the 2019 level by 15%.
• The Luxury & Upper Upscale segment was less impacted by political turmoil, recording KRW 232,425 with 9.8% y-o-y growth and a 70.7% increase compared to 2019. While breaking historical records, the growth pace has moderated compared to 2023.

Outlook: Hotel investment focuses on the Seoul market

• Amid heightened interest in Korean hotel investment, numerous deals are slated for closure in 2025. Notably, the 432-key Four Points Seoul Station Hotel was sold to KB AMC, with Shilla Stay Mapo scheduled to close in 2025.
• Many hotel investment opportunities to be introduced based on increased appetite for hotels. It will be crucial for deals to secure equity, given the limited funds available to review core to core+ opportunities.