The recent news about Seoul's booming hotel industry signals a new market phase where surging demand and reactivating supply are happening at the same time.
This isn't a sudden event but the result of several powerful forces converging. The core reason for this boom is the dramatic increase in foreign tourists. In March and April 2026, the number of visitors surpassed 2 million each month, a level that firmly establishes a new, higher baseline for demand. This surge is largely thanks to the return of tourists from China and Japan, who are key markets for Seoul.
So, what's drawing them in? There are a few key drivers. First, the 'K-culture' phenomenon continues to be a massive attraction. Major events, like concerts by global K-pop groups, create intense demand spikes, leading to what the industry calls 'compression'—where hotels sell out and room rates soar. Second, the weak Korean won makes travel to Seoul more affordable, increasing its 'value for money' appeal for a wide range of travelers. Third, the logistical foundation is solid. Incheon International Airport is handling record numbers of passengers, and flight routes have been restored, ensuring that the growing number of tourists can actually get here.
On the other side of the equation is supply, which is also in a dynamic state. The market is still feeling the effects of the pandemic, when many hotels closed or were converted to other uses. This has created a structurally tight supply, giving existing hotels more pricing power. However, this is beginning to change. Global hotel brands like Wyndham and IHG are actively expanding again, announcing new hotels in Seoul and other cities. Investment deals and repositioning projects are also back on the table, signaling a gradual recovery in the number of available rooms.
In conclusion, the Seoul hotel market is experiencing a healthy boom driven by a powerful mix of cultural appeal, favorable currency exchange rates, and restored travel infrastructure. While strong demand currently outpaces the recovering supply, leading to high profitability, we should expect this growth to moderate. As new hotels open in the coming months and years, the increased competition will likely lead to a more balanced market and a normalization of room rate growth.
- ADR (Average Daily Rate): The average rental income per occupied room in a given time period.
- RevPAR (Revenue Per Available Room): A key performance metric calculated by multiplying a hotel's ADR by its occupancy rate. It shows the revenue generated per available room, whether occupied or not.
- Compression: A phenomenon where high demand, often from a major event, causes hotel occupancy to reach peak levels, resulting in a significant increase in room rates.