[Comprehensive] 50% Limit on Accommodation Guests... Resort with 90% Booking Rate in 'Panic'

Government Applies Until January 3
Hotels Watching Christmas Also Hit in Sales
F&B Uses 'Notification Calls' for No-Show Room Reservations
Secondhand Trading Communities Filled with 'Resort Voucher for Sale' Posts

[Asia Economy reporters Minyoung Cha and Seungjin Lee] The government’s directive to limit the use of lodging facility rooms to 50% occupancy amid the nationwide restriction on gatherings of five or more people has put the hotel and resort industry on high alert. Following the Food & Beverage (F&B) departments, which began making notification calls for reservations of five or more guests the previous day, room reservation staff are expected to be fully mobilized to handle cancellation calls. On secondhand trading communities, posts have appeared seeking people to use resort vouchers for groups of four or fewer.

Room occupancy limited to 50%... Hotel industry 'at a loss' over cancellation criteria

On the 22nd, the government announced that until January 3rd next year, to reduce travel, tourism, and interregional movement, reservations at lodging facilities nationwide?including resorts, hotels, guesthouses, and rural farm and fishing village accommodations?will be limited to within 50% of room capacity. No guests exceeding the room’s maximum occupancy will be allowed to stay, and all events and parties within lodging facilities are strictly prohibited.

The hotel industry is in a state of emergency. Since the elevation to Level 2 restrictions on November 23rd, inquiries about room reservation cancellations have continued at major hotels in Seoul. The only measure to compensate for poor room sales was the peak season around Christmas and the year-end and New Year holidays. A decrease in guests is also expected to reduce restaurant usage. A representative from Hotel A said, "During special promotion periods, over 90% of rooms were booked, and popular five-star hotels are likely in a similar situation," adding, "We have started internal emergency meetings to decide on the criteria for notifying guests of cancellations."

Jeju, a popular tourist destination, has also seen a surge in cancellation inquiries since December. At Jeju Shilla Hotel, the reservation rate in December dropped by about 20% compared to November. This is because the number of visitors to Jeju Island in December halved compared to November. According to the Jeju Tourism Association, the total number of visitors arriving on the weekend of the 19th-20th was 33,713, a 56.9% decrease compared to 78,188 visitors on the 21st-22nd of the previous month. Jeju Island has restricted incoming tourists and made COVID-19 testing a mandatory condition.

Particularly affected are resorts located in provincial areas with relatively high simultaneous guest numbers. For Company B, the nationwide resort room reservation rate averaged 51% from December 24th to 26th and 75% from December 31st to January 2nd. Company C also reported that resort room reservation rates in the Gangwon region exceeded 90% on average. Reservations in Gangwon-do, including Jeongdongjin, a famous sunrise spot at the beginning of the year, are known to be around 80-90%. Small and medium-sized pensions are experiencing similar situations.

Hotel F&B departments on alert... concerns over reservation cancellations

Following the order banning gatherings of five or more people in the metropolitan area the previous day, the hotel industry, which was already taken aback, now faces a state of emergency for two consecutive days. The F&B departments of major hotels are making individual notification calls for reservations with five or more guests. Food ingredient orders, which had been increased to accommodate year-end gatherings such as family meetings, breakfast meetings, and year-end parties, have become a headache. According to Hanwha Hotels & Resorts, reservations for groups of five or more account for about 10-15% of total bookings. One hotel that converted its top-tier suite rooms to accommodate small team dinners has temporarily suspended promotions because groups of five or fewer are not profitable. A hotel industry insider said, "Some popular restaurants for year-end gatherings have up to 30% of customers in groups of five or more," adding, "December is more difficult than November for the first time this year. We are trying various methods such as delivery to overcome the crisis, but the situation is bleak."

Some hotels have devised emergency measures by offering delivery takeout services and launching premium ready meals (HMR), but concerns remain. Lotte Hotel recently expanded sales of lunchbox products using a 'drive-thru' pickup system from daytime to late-night hours. Shinsegae Chosun Hotel’s jjambbong and jajang meal kits, launched in August, have sold 140,000 units as of this date. Glad Hotel & Resort opened the 'Glad Shop' on Naver Smart Store, selling HMR-style 'Glad Year-End Home Party Packs' and offering takeout menus via delivery apps in Seoul’s Yeouido, Mapo, and Jeju. E-commerce channels such as 11st and Gmarket are selling takeout services for home parties in the form of e-coupons.

There are also many concerns about maintaining the identity of luxury hotels. Major hotels such as Shilla Hotel, Lotte Hotel, and Shinsegae Chosun Hotel have multiple restaurants awarded stars in the 'Michelin Guide Seoul 2021.' A representative from Hotel B said, "There is an internal view that, given our mission to serve the best food to guests, it is difficult to serve food outside of the restaurant," adding, "While we are concerned about the impact of revenue decline, the risks of brand dilution are also significant."

Guests post "urgent sale" listings on secondhand trading sites

Guests who had struggled to secure year-end lodging vouchers are equally bewildered. On online secondhand trading communities, posts titled 'Resort lodging voucher for sale' appeared that morning. They sought people to transfer 2-night, 3-day resort vouchers during the Christmas holiday period. Due to the government’s ban on gatherings of five or more, these products can only be used by groups of four or fewer, prompting urgent searches for transferees. With ski resorts becoming inaccessible, reservations at related resorts located in places like Gonjiam and Yongpyong have become major listings. Debates have also erupted in travel and hotel-related communities over the government’s guidelines. A person using the pseudonym Kim Yooyoung said, "I think many people will complain if cancellations happen. I’m curious about the order in which reservations will be canceled." Another, using the pseudonym Lee Semin, said, "I was surprised to hear that year-end lodging reservation rates are 100%," emphasizing, "Everyone should participate in social distancing."

This content was produced with the assistance of AI translation services.