How have South Korea’s hotel transaction dynamics changed over the last decade?
There’s a distinct trend when comparing pre and post pandemic dynamics.
Reviewing hotel transactions in South Korea over the past decade reveals a distinct shift in dynamics between domestic and international investors since the onset of the pandemic, said Savills in a report.
Preceding the pandemic (2015-2019), marked by a burgeoning influx of Chinese tourists, South Korea’s tourism industry flourished, driving an uptick in foreign investments in the hotel sector.
Here’s more from Savills:
Foreign investors, particularly, demonstrated a preference for upscale accommodations, notably 4-star and 5-star luxury hotels situated in prime tourist hubs such as Myeongdong and Jongno. Approximately 35% of hotel transactions during this period involved foreign capital, with notable acquisitions being Solaria Nishitetsu Hotel Myeongdong, Holiday Inn Express Seoul Euljiro, and ibis Ambassador Insadong.
During the pandemic, Sheraton Seoul Palace Gangnam Hotel was forced to shut down and subsequently acquired by The Land Group for KRW328.8 billion for redevelopment into high-end serviced residence. Additionally, Hyundai Engineering & Construction and Wealth Advisors procured Le Meridien Seoul for KRW700.0 billion, with plans for a mixed-use complex comprising offices, retail, and residential components.
Furthermore, IGIS AMC’s acquisition of Millennium Hilton Seoul from CDL Hotels for a record-breaking KRW1.13 trillion underscores the vigor of domestic investment activity. The site is slated for redevelopment into a 460,000 sq m mixed-use complex, featuring offices, hotels, residences, and retail spaces. This redevelopment aligns with broader initiatives for nearby landmarks such as Seoullo Tower and Metro Tower, aiming for completion by 2029.