Q1 2026 shows a trajectory towards 20 million inbound visitors by year-end 2026

• South Korea recorded 2.69 million visitor arrivals through February 2026, up 19.6% Y-o-Y, the strongest start to a year since 2005. China, Japan and Taiwan remain the primary source markets, while arrivals from other countries increased by 10.2% Y-o-Y, further diversifying inbound demand.
• Chinese visitor arrivals increased by 30.9% Y-o-Y, partly driven by travellers diverting from Japan amid China–Japan tensions since November 2025. The continued return of Chinese tourists is expected to remain a key driver of inbound growth.

Hotel development activity gains momentum across key tourism districts in Seoul

• No significant new supply entered Seoul or the Seoul Capital Area in Q1 2026. The openings of L7 Cheongnyangni by Lotte (260 keys) and Hyatt Place Seoul Pangyo (206 keys), both originally scheduled for 2025, were further delayed.
• The sustained recovery in inbound tourism is driving pre-development activity across major districts, i.e., Myeongdong, Hongdae, Gangnam and Seongsu, with new supply expected from 2028 onwards.

Continued RevPAR growth drives investment activity

• The market recorded steady Y-o-Y RevPAR growth across all segments, driven by higher ADR. The Luxury & Upper-Upscale segment saw RevPAR rise by 22.0%, supported by a 9.9% ADR increase to KRW 395,000, while the Midscale & Economy segment posted an 18.2% increase in RevPAR, supported by a 10.8% ADR increase to KRW 128,000.
• Several notable transactions, including L7 Hongdae, Shilla Stay Seodaemun and Hotel U5, closed in Q1 2026. More hotels are expected to close in Q2 2026, driven by strong momentum.

Outlook: Hallyu-driven tourism is entering a defining year, supported by a strong long-term growth trajectory

• Inbound arrivals are on pace to exceed 20 million in 2026, supporting further RevPAR growth across all segments.
• Iran–U.S. tensions in Q1 2026 temporarily disrupted flights via key hubs such as Dubai and Doha. Prolonged tensions could soften Middle Eastern and European arrivals during the summer peak, requiring close monitoring of booking trends between Europe and South Korea.