Slower year-end due to political disruptions and black swan event

• Amid political turmoil, international arrivals decelerated by end-2024, resulting in annual visitation of 15 million. While visitation still sits at 94.1% of pre-pandemic levels, this figure surpassed 2018 visitation, demonstrating resilience despite challenges.
• Top source markets in 2024 were China, Japan, Taiwan, the US and Philippines. Although China showed 143.3% Y-o-Y growth, political uncertainty subdued overall recovery, keeping it at 87.9% of 2019 levels.

Two new institutional hotel openings in 2024, with luxury brand-driven pipeline

• Seoul experienced limited supply additions: Tribute Portfolio Guro (141), Mercure Ambassador Seoul Magok (400) and voco Myeongdong (576). The pipeline remains constrained with Pullman Ambassador Gwangjin (182) slated to open in 2025.
• Luxury segment drives future growth, with over 2,000 rooms planned by 2030. However, rising development costs may lead to delays or cancellations of some projects, as witnessed by the recent delay in the Midan City Resort project.

RevPAR continues to break records with stabilising growth rate

• Seoul’s Midscale & Economy hotels exhibited robust recovery in 2024, with RevPAR increasing 23.5% y-o-y to KRW 98,359. This performance surpasses 2019 levels by 21.3%, reflecting sustained improvement and growing demand in the segment.
• The Luxury & Upper Upscale segment continued to excel, with 2024 RevPAR reaching KRW 280,050, a 61.9% increase from 2019. While breaking historical records with a 14.4% y-oy growth, the pace has moderated compared to 2023.

Outlook: Hotel investment sentiment thrives, with increasing appetite for hotel assets

• Recent political events have added to market uncertainty, but the popularity of Korean culture and a favourable supply-demand dynamic will drive strong performance of hotels in Seoul. By the peak summer season, market performance will outpace 2024 levels.
• Amid strong performance of hotels, appetite for hotel investment remains high, as witnessed by the transactions slated to close in 2025. Strategic investors expanding into Korea, as well as financial investors seeking value-add returns will be the main investors.