Arrivals show signs of full recovery by end-2024

• South Korea received 6.28 million international visitors as of YTD May 2024, an 81.8% y-o-y growth and a recovery of 90% of pre-pandemic levels. A full recovery is expected by end-2024 with the return of Mainland China tourists.
• Top source markets for H1 2024 were Mainland China (29.0%), Japan (18.7%), Taiwan (8.6%), the US (7.8%) and the Philippines (3.2%). Mainland China exhibited the highest y-o-y growth of 381.5%, reaching 78% of 2019 levels.

Headwinds impact hotel openings with no new hotels in H1 2024

• There are no new graded hotel openings for the remainder of 2024, with the exception of Voco Myeongdong, which is a conversion. The lack of new supply has resulted in a favourable supply-demand dynamic in the near term.
• Institutional brands set to enter the Seoul market: Mercure Hotel Ambassador Seoul Magok (400-key) in 2025, followed by Maison Delano (83-key), Pullman Hotel Gwangjin (182-key) and Rosewood in late 2027.

Setting new performance records, breaking price ceilings

• The Midscale & Economy hotel segment in Seoul sees significant growth, with RevPAR surging y-o-y and exceeding 2019 levels.
• Luxury & Upper Upscale segment achieved an all-time high RevPAR, surpassing pre-COVID-19 figures. The second quarter of 2024 sees RevPAR recording a substantial increase from 2019 levels.

Outlook: Resurgence in strategic investor interest, promising future outlook

• Luxury and Midscale segments to fully recover by end-2024 as international visitors return. Short-term growth to stay robust, but medium-term may stabilise due to global uncertainties.
• Due to a tight lending environment, short-term transactions to be driven by international strategic investors seeking value-add opportunities. However, Seoul’s promising market fundamentals attract substantial interest, enhancing the overall outlook.