The future of Korea’s hotel industry lies in “going upscale” to establish global and premium-brand hotels satisfying the needs of the spiraling number of business travelers to the country, an expert on the hospitality industry said.
Despite the plethora of budget hotels targeting holidaymakers, the key will be to capture the business travelers who are less sensitive to economic ups and downs, said Akshay Kulkarni, regional director of hospitality at South and South-East Asia of Cushman & Wakefield.
“(If there was no limit in budget), I would build 60 (condominium-type) residences, a 125-room luxury hotel and a business hotel formed of international brands with up to 200 suites,” Kulkarni said in an interview with The Korea Herald.
Akshay Kulkarni, regional director of hospitality at South and South-East Asia of Cushman & Wakefield
“The residences will sell because Seoul is in need of something new, and there are people who have money,” he said. The luxury hotel will share its services and amenities with the residence users to keep both kinds of customers satisfied.”
“Then the business hotel will be 3 1/2 to 4 stars, making the real money. It will have banquet and seminar facilities. High-end restaurants are not necessary because the demand is not so big these days,” he said.
In this way, Korea, with more than 12 million foreign visitors a year, will be able to meet the demands of all kinds of tourists, including business travelers.
“A considerable number of tourists are business travelers. And to them, having a good bed and linen for a good slumber matters. The mid to upscale hotels will fit the need,” the real estate developer said. He noted that business travelers are also less dependent on economic ups and downs and have become a stable source of income for the hospitality industry.
Currently there are three “uber-tier” hotels in Seoul: Conrad, Park Hyatt and Banyan Tree. And Canadian-based Four Seasons is scheduled to open in the bustling district of Gwanghwamun next year. International hotel brands including Marriott and Accor as well as domestic players have created heated market competition.
But Kulkarni thinks there’s room for more. “Seoul is a bit overpriced (in terms of hotel prices) compared to other cities in the world. It means the demand is higher than supply,” he said.
Kulkarni was aware of domestic hotels’ mission to go abroad. Currently, Lotte has hotels in Russia, Uzbekistan, Vietnam and Guam. But Shilla has maintained a domestic scope.
“I am puzzled about Shilla. I am not sure whether they don’t have the money or lack passion, but they aren’t moving. But hotels must expand at some point,” he said.
By Bae Ji-sook (email@example.com